Buying or selling a used car usually involves significant amounts of money. Make sure to use payment methods that are safe and can be verified
You’ve found what you think is the perfect used car for you. It’s the make and model you’ve always wanted, a fairly recent year, great mileage, super condition – all systems are go! Now it’s time to pay for it. Many people don’t give this much thought, but depending on the context in which you are buying a used car, you want to be sure you select a safe way to pay for your new ride. Even more relevant is when you’re selling your own used car – what’s the safest way to accept payment?
If you’re buying a used car at a reputable, licensed dealership, you can use just about any way to pay you want, whether by personal check, debit card, credit card, cashier’s check, or even cold hard cash. Just make sure you get a bona fide receipt if you pay cash! When you pay by check or card, those payment methods are verifiable and trackable. Cash, on the other hand, not so much. And really, if you’re buying from a dealer, there’s absolutely no reason to pay in cash. It’s really not safe to carry around large sums of money like that when you don’t need to.
If the context is a used car for sale by private owner, cash is out of the question. In addition to the fact that it’s just not safe to be hauling around loads money, you’re about to engage in a significant transaction with a complete stranger, not a licensed, reputable dealer. If push comes to shove, whether you’re the buyer or the seller, how are you going to prove that the cash was handed over? Save yourself a potentially huge headache and avoid using cash in any used car transaction, whether with a private owner or a dealership. It’s just not smart.
In fact, in the private transaction context, it’s probably better to stay away from both personal checks and even cashier’s checks. For personal checks, there’s no guarantee that the person who wrote actually has the money in the account to cover the check, and who wants to deal with a bounced check situation? Everyone tends to assume that a cashier’s check is as good as gold, and most of the time it is, except that they’re actually very easy to fake, in which case the seller who accepted it is completely out of luck. That’s a hard lesson to learn! The one way to make that work out well is if you schedule the transaction to occur at the buyer’s bank so you’re there to see the cashier’s check being prepared. Then you’re good to go.
If you’re going to purchase a used car from a private owner using your own personal check, then you do have the peace of mind knowing that there will be a record of the check being cashed and/or deposited and by whom. Just be sure the seller has prepared a proper bill of sale to serve as a receipt and record of the transaction.
Keeping these tips in mind when you’re buying or selling a used car will help ensure everything is legitimate and goes as smoothly as possible. If you are buying a used car and decided to finance your next car purchase versus paying outright Auto City is a very good place to start. We’ve partnered with the best auto lenders and banks and arrange financing for customers with all types ofcredit. See our auto loans page for details.
FAQs
If you're buying a used car at a reputable, licensed dealership, you can use just about any way to pay you want, whether by personal check, debit card, credit card, cashier's check, or even cold hard cash. Just make sure you get a bona fide receipt if you pay cash!
What is the most secure way to pay for a used car? ›
Secure: Certified checks are considered secure payment methods since banks issue them and guarantee the funds. Certification protects the seller against fraud and counterfeit checks. Since you're not exchanging cash, the transaction process is physically safer.
What is the safest form of payment to accept when selling a car? ›
Like we mentioned, it's pretty dangerous to walk around with your pockets full of large bills, and for that reason the buyer may choose to pay you in a personal or cashier's check. Besides cash, a certified cashier's check is the most secure way to accept payment during a private sale.
How do I avoid getting scammed when buying a used car? ›
Fortunately, there are a few steps you can take to weed out most scams:
- Ask for a vehicle history report. Many private sellers will order one to make things easier for potential buyers. ...
- Hire a mechanic. ...
- Verify the seller's story. ...
- Pay with a cashier's check.
No, a cashier's check really isn't any safer than a personal check as payment when selling your car. They can still be faked and they can still bounce. The feel more official, which makes people think nothing can go wrong with them, but that's simply not true.
How to safely receive payment for a car? ›
In addition, to be safe, it's a good idea to request a cashier's check for the money that's drawn from a local branch rather than a personal check. The vehicle buyer may have to pay a fee, but you'll avoid a likely bigger one for taking a bad check that bounces. Stick to your timeline and don't rush the transaction.
Is it safe to accept cash for a car? ›
Should I Accept Cash When Selling My Car? Maybe. Avoid having a lot of cash on for any amount of time out in public, and especially not in a high-crime area. The safest way to accept cash is to have the buyer meet you at your bank, give you the money, and you immediately deposit it.
What is the safest payment method for buyers? ›
Secure online payment methods
- Credit cards. By and large, credit cards are easily the most secure and safe payment method to use when you shop online. ...
- ACH payments. ...
- Stored payment credentials. ...
- Credit cards with EMV chip technology. ...
- Credit cards with contactless payment. ...
- Payment apps.
As the app was designed primarily to be used between friends, it's risky to use for transactions with strangers using personal profiles. In fact, the service itself recommends against using Venmo to buy something from a stranger if you are not able to indicate in the app that the transfer is a payment.
Which payment method is the least risk for a seller? ›
Virtual cards ensure that any sensitive credit card details (on the buyer's primary credit card) are not shared with you when accepting the payment. Even if a virtual card number is compromised, the buyer's actual account number will be masked.
Buying a vehicle online can increase your risk of being scammed. Some common scams include identity theft, fake ads and curbstoning. To avoid the risk of being scammed, it's best not to give any payment information until you see the vehicle in person.
What is the best payment method when buying a car? ›
Buying a car in cash can be a good financial move. It helps you avoid unnecessary debt, and you don't have to worry about making monthly loan payments. It also forces you to purchase a car you can reasonably afford.
What is the safest way to auto pay bills? ›
Set it up as online bill pay through either your bank or credit card. Do not use automated debit transactions OR open and use a new checking account (separate from your primary checking account) for automatic payments. Set up alerts in advance of your bill due dates to make sure you have money to cover the bills.
Which is the least expensive way to pay for a car? ›
Low APR financing.
This is one way to get the cheapest price you can on a car loan. Typically, the better your credit score the lower the interest rate you may qualify for.
