Safe Ways to Pay or to Accept Payment for a Used Car

October 1st, 2016 by
used car payment methods

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 of credit. See our auto loans page for details.