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Your 'buyer' was a re-seller. He sent you $300, knowing that he could always get it back from PayPal. In effect, he 'locked up' the car at no cost to him, believing that he could place it easily.
For whatever reason, his deal fell apart (meaning that his buyer never pulled the trigger) and he doesn't want to buy it on spec. So, he looks to find any excuse possible to back out. Because it's a car, he can always find SOMETHING, no matter how petty.
If it wasn't this hole, it would be something else. If his deal had gone through, he wouldn't have asked another question.
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