It’s always a good day when you finally sell your car. It’s been listed on Instamotor for weeks, and now someone is going to pay you for it. How should you accept payment? There are multiple ways to do so, it comes down to preference and what you’re comfortable with. Some people only deal with cash, others are fine with a cashier’s check. Others are even comfortable with the buyer making payments. Trust only goes so far though, and it depends who you’re dealing with and more importantly how well you know them. What's available can range from a cash to a cashier's check vs. money order. For now let’s take an in-depth look at the options.
If the buyer can’t afford to buy your car outright, but are desperate to drive it home, they may propose a payment plan where they pay you X amount of dollars over X amount of time, like $100 every month. Do NOT agree to this. Instead suggest the buyer apply for a loan, where the lender will pay you in full for the vehicle, and the buyer can make payments on their loan instead. You're not a bank, so don't feel obligated to accept a payment plan.
If someone offers to pay for the car with a personal check, do not agree to give them the title until you have the cash in your hand. This is not the most reliable method, but steps can be taken to ensure its validity. You can wait until the check clears, or you can go with them to the bank and cash the check first before handing the title over. Either way, do not hand over the title until you have the money.
This is one of the best ways to accept payment for your car. What happens here is as stated before, where you as a seller should meet the buyer at the issuing bank, so you can cash their check with them there. The reason for this is that if you deposited a fraudulent check, the bank won’t know until days later and that’s more than enough time for the scammer to skip town. So while cashing a cashier's check, always verify the check is real with the issuing institution, and it's best to have the buyer with you to avoid a cashier's check scam.
Cash is king. Cash is safe, reliable, immediate and absolute. Cash is far and away the best way to accept payment for your car, and should be the first course of action when dealing with how to accept payment. Cash is not without its faults, so the smartest way to handle cash is to meet the buyer at a bank and deposit the cash then and there, so you will know if the cash is legitimate. Keep in mind that any amount of cash deposited that’s more than $10,000 will be reported.
This is more for transactions surrounded by special circumstances. If the buyer comes at you with a loan, you may accept the payment directly from the lender. And if your car has a lien on it, then the money would go directly to your lienholder. If you have a loan that is underwater, where you owe more than what the car is worth, then you’ll still have to take the hit for the difference, and payoff that different to your lien holder before they would release the title to the new owner.
It’s entirely up to you how you want to accept payment when you sell your car. But be aware of the pitfalls, and know that the used car market is fraught with scams. Trusting people you don’t know is a massive risk, and we would strongly recommend against accepting a payment plan or a personal check.
Not your typical used car salesman. Our team is here to provide honest and transparent advice about car buying and selling.