Let's get to know more about these checks with definitions from Investopedia :. A check or cheque is a written, dated, and signed instrument that directs a bank to pay a specific sum of money from a person's account payer or drawer to the person to whom the check is written payee or drawee. The bank effectively sets aside the funds from the person's account to be given out when the bank draft is used. When you request a cashier's check from your bank, money is moved out of your account and into the bank's account, and then a bank representative signs it over to a named third party.
These checks are commonly requested in transactions involving a large amount of money like buying a car or if the car seller may be having difficulty in collecting payment from a private buyer. They are generally seen as a more secure way of transferring money. You can be sure that these checks would not bounce and the payment is as promised.
In such a way, bank drafts and cashier's checks are safer than personal checks. Sadly, there could still be the potential risk of altered, forged, fraud, or counterfeit checks.
The best solution for this is to schedule the transaction at the bank. This may come as favorable to the car buyer as well, considering that the buyer will not prefer to withdraw or carry a big amount of cash as payment. Meet the car buyer at the bank where he or she has an account. Have the car buyer request for a bank draft or a cashier's check paid to you. After receiving the car payment, the bank draft or a cashier's check is deemed good as cash.
You may then head to your bank and have it deposited in your account. Complete the transaction and hand over the paperwork and title to the car buyer only after the check has been verified and cleared. An alternative way to receive car payment is through a legitimate escrow account.
Investopedia defined Escrow as a financial instrument whereby an asset or escrow money is held by a third party on behalf of two other parties that are in the process of fulfilling their contractual requirements and completing a transaction. This payment method can be considered as safe provided that you select the services from a licensed and regulated escrow company.
Escrow services work best when you are selling cars online as it has that global reach. With the help of an authorized third party, both the car seller and the car buyer are safe and the transaction can proceed smoothly.
You can buy and sell anything safely without the risk of charge-backs. They provide several additional motor vehicle services with a low fee that could give car sellers peace of mind and boost confidence for car buyers. Wire transfer or bank transfer is a method of electronic funds transfer from one bank account to another bank account, or through a transfer of cash at a cash office.
The US law requires banks and money transfer companies to report the sender's name and contact information, as well as the recipient's name, contact information, bank details, account number, and the amount received. Technically, transferring money is usually a faster and safer option than withdrawing and paying in cash. However, you need to make sure to do the transaction on a secure internet connection and be mindful enough not to fall victim to phishing websites.
You may select another payment option if you feel uncomfortable giving your bank account details to strangers. Contactless payment "tap-and-go" with chip and pin security is another safe and convenient method for car buyers.
This may be in the form of debit or smart card which uses radio frequency identification RFID technology or near-field communication NFC. In contactless payment, the transaction is made in close physical proximity by tapping your card near a point-of-sale terminal which is fully built for that system. Most tap payments have a low allowable limit as it generally does not need to enter the PIN, but those with larger dollar amounts may require a signature.
To avoid criminals skimming card data, only tap your card on trusted payment centers and terminals. Here at Sell My Car in Chicago with Enrique for Cash , we provide secure contactless payments should this be your payment of choice. Ask the buyer for ID and check if they have a valid driver's license. Cash is still the safest and most preferable form of payment when selling a car, especially at a reasonable amount. Remember to check for authenticity and do count out the money in the presence of the car buyer.
If the conditions allow, let the buyer pay you at your bank. As fraud checks can exist too, be sure to request one at the buyer's bank. This way you can have peace of mind knowing that the check was legally issued and guaranteed by the bank. But if you like to save your time and effort, you may opt for an Escrow third-party service to help facilitate the transaction.
Another option is to receive payment via wire or bank transfer. Just keep in mind though to transact on a secure and legitimate escrow account and online payment website, respectively.
Cashless, contactless payment can be an alternative way to accept payments. This tap-and-go speeds up the process of transferring funds, although larger dollar amounts may require a signature.
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. 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. In most states, selling your car privately will prevent you from getting a trade-in tax credit. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. Often asked: What payment to accept when selling a car? There is another step to consider if you absolutely cannot do banking during normal business hours. Open up a small savings account at a bank that has branches inside supermarkets.
These are typically open seven days a week with extended hours. Who knows? Maybe you'll get a free gift. Plus, most supermarkets have cameras over the entrances in addition to the bank branches.
This option works if you are selling a used car to an out-of-area buyer common in online transactions. Escrow services are provided by a licensed and regulated escrow company. Most people will have nothing to fear but if you do, for some reason, cash is not going to be your friend in a used car transaction.
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