So I have a "mechanics special" listed on Craigslist. I got a reply to it that said something to the effect of "Is the item still available?". Pretty much right there that told me it's a possible scam as it seems that real people don't refer to cars and trucks as "items"... anyway...

I replied that it is still available and then I got a long winded response about how they want it, the price is good, blah, blah. They are out of the area and want to pay with Paypal and will then send an "agent" to pick the car up.

So yes, I've been around. I recognize that this is a scam attempt but what I want to know is how does it work? Does anyone have experience with this type of scam? They mentioned having an agent pick it up so there is not the usual shipping scam here. Is the idea that they maybe over pay me and then ask for the refund of the difference?

Really I'm just curious if anyone has any ideas on this one.

Yes, I am very familiar with that scam, although I never fell for it. They respond en masse to craigslist postings regardless of what you are selling and don't always read it. They send you a fake cashier check, usually from a foreign bank, so that your bank takes 2 - 3 weeks to find out it's fake (although a good bank will call them while you wait, or find out if the bank even exists). The check is for more than the amount you want, and they apologize for not understanding and ask you to give their 'agent' a cash refund, or send it WU, or bankwire it. There are many variations on the scam, even for roommate ads and help wanted.
Oh and for Paypal they simply send a fake Paypal email, using the Paypal logo. This usually happens this way on eBay. I haven't seen it used on craigslist. They hope you don't look in your account.

If this fellow is offering to send someone, and you're friends with a cop, maybe you can get them arrested.

I knew about the check but have never heard about it being done with Paypal. So I guess the Paypal mail is fake and that's it.

I told the guy that I'm not an idiot and will deal cash only, face to face. He wrote back that he always deals in cash but can't as he is "away on assignment" so he needs to use Paypal of which he has "a %90 satisfaction rating". LOL... hard to believe anyone falls for this stuff.

When I listed my car on Craigslist I got the same thing, actually from several different "buyers." I would always write back stating "cash only" and they would go away.

I found better success selling my car on Autotrader - sold two that way without any scammers trying to cheat me.

I run a used car lot and one of my "advertising" venues happens to be Craigslist. I know others work better but I have sold a few using Craigslist and you can't beat the price.

Where I live, most people now put a phone number in the listing and say 'I will not respond to emails.' Since the scammers are from all over the world, they aren't going to call, and many don't have a good speaking command of English anyway.