You’ve put in the time to write a great advert and have now agreed a price with a buyer that you are happy with. What do you do next? Receiving payment for the car can often be a little challenging, so below we have laid out all the different ways that you can be paid.
There are three common ways of making payment which are by cash, cheque or online transfer. No matter which way you choose you need to make sure that you have received the money before you hand over the keys.
Cash is the quickest form of payment, so it is great if you are selling a car for a relatively small amount. Meet in a safe place to do this transfer and make sure you count all of the money before handing over the keys. One issue that comes with this form of payment is that you could be given counterfeits. You can buy money counterfeit detectors online that are quite cheap, so it could be worth getting one of those before meeting them. Another option is to meet them at a bank where you can give the money over to a cashier who will be able to tell you if the money is fake then and there and also pay it into your account for you.
If you aren’t meeting at the bank, be sure to take care when walking around with a large amount of cash on your person. Try to deposit the cash as quickly as possible into your account.
Probably the most convenient and safest methods of payment would be through a bank transfer. The time it takes for the funds to clear will depend on the amount of money you are getting for the car and whether it was via Faster Payments or a CHAPS payment.
Faster Payments are instant, although it has been known in some cases to take around two hours. These payments can be made online, on a banking app or over the phone. CHAPS payments sometimes take longer, however it is guaranteed to arrive on the same day, if it is a weekday, or the next day if it is a weekend or a public holiday.
Make sure that the funds are showing as cleared in your bank before handing over the keys to the buyer to be sure that it will definitely go through.
If you are receiving payment by cheque, then you will need to wait until the funds have cleared before giving the car to the buyers. This form of payment is difficult between strangers as it needs a certain amount of trust, so be sure to check with your bank that they have cleared properly.
PayPal is an easy way to sell and buy goods online, however it is not the safest for buying and selling cars. Vehicles are exempt from PayPal’s protection policies. Once the payment has been authorised, the payment is final, however it does leave you exposed to potential fraudulent activity, as the account that sent the money to you could be fake or could be stolen.
Using escrow to receive payment for a car is very rare and doesn’t happen very often, however it is possible. Escrow is when funds are given to a neutral third party until a set of conditions are met which are decided by you and the buyer. It is great for payments that are quite high. It means that you know the money will be received as long as you and the buyer are happy and is a safe way to bank the transfer.
When hiring the third-party company, ensure that they are legitimate and also check with the Financial Conduct Authority.
There are plenty of ways to receive a payment from a buyer of your used car. Make sure whatever way you decide you are safe and follow all of the necessary measures to ensure you receive payment for your car before handing over the keys.
CarFinance 247 Limited is a credit broker. Rates from 6.9% APR. Representative APR 19.9%.