Advice on safe used car payment transactions and options really comes down to one simple solution. When selling a used car, most people’s number one concern is, “How am I going to handle the payment?” After all, it’s increasingly easy to counterfeit a cashier’s check, personal checks can be written on empty bank accounts, and who wants to handle thousands of dollars in cash?
The best solution is always going to be cash. It is also the most disconcerting because it offers no protection if stolen. However, there are ways to be paid in cash that are safe. Both solutions are inconvenient and require you completing the sales transaction during business hours. So what? You have invested a lot of money into your used car. You don’t want to get ripped off.
What do you do if the buyer won’t agree to these terms? Don’t sell them the car. It’s as simple as that. No legitimate buyer is unwilling to go to a bank with you.
It’s true if you deposit more than $10,000 in cash your bank has to report the transaction, but this shouldn’t be a concern as long as you keep the paperwork from the sale. Plus, check with an accountant to determine the best way to declare income from the sale of the used car.
Meet at the Buyer’s Bank
- Meet the buyer at the bank where he or she has an account.
- Have the check cashed and then turned into a cashier’s check made out to you. This is a 100% fail-safe way to be paid for both the buyer and the seller.
- Offer to pay the buyer’s fees for the check. After all, it is being done for your convenience.
Meet at the Your Bank
- Anybody who can get a personal check or cashier’s check, can get cash.
- Have the buyer meet you at your bank with the cash.
- Deposit the cash and hand over the paperwork right there. Your bank might even offer you a spot to complete the transaction privately.
Create a One-Time Account
There is another step to consider if you absolutely cannot do banking during normal business hours. Open up a small savings account at a bank that has branches inside supermarkets. These are typically open seven days a week with extended hours. Who knows? Maybe you'll get a free gift.
Payment After Hours
Don’t want to take that step but the buyer still wants to pay you outside of normal banking hours? Ugh, is my first response, but if so, only under the following conditions:
- You will accept a personal check with a name and address that matches their driver’s license, but the paperwork won’t be exchanged until the check clears.
- Bring the check to the bank the following morning to verify funds and cash it
- Deliver the paperwork along with the car the next night.
- Don’t let the buyer squawk about his or her money being tied up and not trusting you. It’s your used car. He or she has to buy it under your conditions.
- Keep in mind, when it comes to payment in personal transactions, the customer is not always right.
The Escrow Option
This option works if you are selling a used car to an out-of-area buyer (common in online transactions): www.escrow.com. Escrow.com reduces the potential risk of fraud by acting as a trusted third party that collects, holds and disburses funds according to Buyer and Seller instructions. Escrow services are provided by a licensed and regulated escrow company.
- It accepts various forms of payment, but keep in mind the process varies depending on how the buyer pays.
- This is the best way to go if you are dealing with a foreign buyer, too, even though some people say wire transfers are safe.
- You don’t ship the used car until Escrow.com tells you the funds have cleared.
- The funds are released to you when the buyer accepts delivery.