writeoff; how do you get the money from your paypal account into you bank account, and how does paypal get the money from your account when you buy stuff? That's right paypal have access to your bank account!!
So if paypal sides with the buyer then they will just rip the money out of your bank account the same way they would if you bought something.
The only way you can protect yourself is to set up a bank account just for the transaction and as soon as the money clears pull the money out and close the account, which is too much of a stuff around to sell a car, especially when they can just put the money in your account the way normal people do. They are setting him up, and it is highlighted by the fact they are bending over backwards to seal the deal with paypal (i.e. offering to pay the paypal fees and such)