If you have a car that you’re looking to sell, there are two main ways you can do this. First you can approach a dealer and agree on the price. The dealer will then buy the car from you to then resell at a profit. The second option is to sell the car privately while cutting out the dealer. This method is often the preferred option for both buyer and seller. Why you may ask? Well, because the dealer will be looking to buy the car from the owner at the lowest possible price and sell at the highest price to make the most profit. While selling a vehicle privately, the seller can ask for the best offer and the buyer can ask for the best deal. Seems like a match made in heaven, almost... Turns out, private car deals are riddled with challenges and when not done correctly could create opportunity for fraud and theft. This is why it's crucial to make the right choice on what payment to accept when selling a car.
· Often the buyer and the seller do not know each other and there is a big risk of getting scammed and even robbed.
· Selling a car privately is often a slow and time-consuming process.
· Many sellers may not know how to do a bill of sale or even when is the best time to transfer over the vehicle title.
· There are various payments methods each of which come with their own pros and cons.
· Different payment methods have a maximum limit on how much can be transacted within a day.
Using hard cash is the most traditional way to make any sale. However, it can be risky on the part of the buyer and may not be the safest way to transfer money in private car sale. Imagine walking to the bank carrying all the money that you sold your car for. Cash can be a simple way to make a quick low-dollar amount transaction, but still opens you up to unnecessary risks. There is also the lack of evidence or proof of payment due to a lack of paper trail. Another reason why it may not be the best way to accept payment for a car. Being paid in counterfeits is also a very real risk. Luckily you can get around this issue easily with a counterfeit detection pen. Note however that such a pen, while it may be able to identify banknotes, will not show bleached notes. This is where counterfeiters take a bank note of low denomination, rub off the denomination and add a higher denomination. You can use the security strip on $5 notes or higher which you will be able to easily detect using a UV light.
Pros of selling your car using cash
· It is fast and doesn’t consume much time
· It makes the process of selling the car much easier
Cons of selling your car using cash
· There is a security risk with carrying a lot of hard cash around
· There is a risk of getting scammed using counterfeit notes
One thing to always keep in mind is that a personal check will only be worth something if the money it represents clears. This is why you should always wait until the funds reach your account before you let the buyer take the car. Often this will mean waiting for a couple of days. To make a transaction using a personal check there needs to be a higher level of trust between both buyer and seller.
Pros of selling a car using a personal check
· Offers a higher level of security compared to a cash transaction
· Since the seller will only release the vehicle once the money clears, there is a lower chance of getting scammed compared to cash.
Cons of selling a car using a personal check
· Can be time-consuming
· Requires a higher level of trust between buyer and seller
One of the main advantages of a cashier’s check over a personal check is that the seller can be sure of receiving the funds. One way to ensure that the cashier’s check is genuine is to agree to meet the buyer at the bank. Keep in mind that it will cost a small amount for the cashier’s check. Some financial institutions and credit unions will give members up to two free cashier’s checks a year.
Pros of selling a car via a cashier’s check
· Offers a higher level of security than both cash or personal check
· Can help ensure the car sale goes smoothly as it builds an element of trust
Cons of selling a car via a cashier’s check
· Can be time consuming to complete the sale process
· Can be hectic to get a replacement in case you lose it
When you think of wire transfer the first thing that comes to mind is money deposited directly into an account. When it comes to wire transfer there are multiple private car sale money transfer options. Consider these when deciding on what payment to accept when selling a car.
This method of wire transfer takes about 3 to 4 days and is often preferred when doing an automatic payment of bills, direct deposit checks or even when transferring money from the bank to an investment account.
This method is ideal when transferring money from one bank account to another and is one of the safest way to transfer money in private car sale. It can be done not just with domestic banks but also between a domestic bank and a foreign bank account. Keep in mind that banks often don’t operate during the weekends and during weekdays they will close at 4pm in many states. This is why it’s a good idea to time the sale during normal business hours. Both parties are also required to have a certain level of trust as often it involves transferring large sums of money to a stranger’s bank account.
Pros of selling a car using wire transfer
· Can be simple and quick to perform
· Takes away the need to carry cash
· Will leave a digital paper-trail as evidence of transaction
Cons of selling a car using wire transfer
· There could be instances where transactions clear after several days
· Not all sellers may be willing to give out their bank details to strangers
An escrow service works by holding onto the money until the seller delivers the goods. Once the buyer is satisfied with the goods, the escrow provider then releases the money to the seller. This makes it one of the best way to accept payment for a car. Using an escrow service will offer a good level of security but also comes with the downside of consuming time. Most escrow service providers will release the money after 5 to 20 days. Not to mention that you will also need to pay a transactional fee of around 3.25% or higher. If you choose to use services like PayPal, you will also need to pay a 3.05% or more transaction fee.
Some pros of using escrow service during a car sale
· Offers a high level of security
· Builds trust allowing the transaction to run smoothly
Cons of using an escrow service during a car sale
· Can be time consuming
· Can involve transactional fees
Now that you have both agreed on the price and the transaction has taken place, it is crucial to have the agreement in writing. This will go a long way towards helping both the seller and the buyer feel safe. Note that the agreement doesn’t need to be an overly detailed document, just noting down the important bits of the car sale, creating two copies of the documents and both the buyer and seller signing it.
Some of the important points to note down include
· Name, phone number and addresses of both the buyer and seller
· The registration, make as well as vehicle model
· The agreed price of the vehicle
· The deposit amounts
· Date of payment of the deposit
· Signatures of the involved parties
· Any other relevant and important information.
The bill of sale is another highly important document as it lays down the particulars of the exchange of ownership of the car from the buyer to the seller. In a lot of states, the sale of the car will only be considered final when the title has been transferred from the owner to the buyer. With a bill of sale, the date when the buyer takes possessions of the care is clearly shown with the intent of securing obtaining the title at a later date.
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