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Payment

Payment

So the deal is closed, the price is agreed and now is the time to agree on a method of payment. Below is a summary of the options which are open to you with a note of the pros and cons of each method:

 

 

 

Cash

Cash is the most common form of payment, however many sellers are nervous about accepting large sums of cash due to the risk of potential fake bank notes. Your seller may suggest meeting you at their bank so that they can have the notes checked by a bank cashier and lodged directly into their account. You should however make sure that you are being given access to the car at the same time as you handing over the payment.

It is important to warn you to be careful when meeting with a stranger when you have significant sums of money with you. Be sure to bring a friend or partner and insist on meeting the seller in a public place or at their bank.

Paying by cash may give you more room for negotiation as you are able to complete the sale instantly, without any need for applying for finance etc.

Electronic Transfer

This is another potential method of payment whereby you would transfer money from your bank account (via the bank) to the sellers designated bank account. It can take up to 3 days for the money to be transferred, so your seller may be unwilling to hand you over the car until the money has been deposited into their account.

Please note that your bank may charge you a fee to complete an electronic transfer.

Personal Cheque

Your seller may not be willing to accept a personal cheque due to the large risks that this carries. A cheque may be cancelled at anytime by you or indeed the cheque could bounce due to insufficient funds available in your account.

The benefit for you however is that there is a paper trail linking your money and transaction with the seller.

Banker's Draft

A banker’s draft is essentially a cheque whereby the funds are taken directly from the bank and not from your account. You will pay the bank and the bank will then raise a cheque (banker’s draft) to your seller for the money.

You should be aware that your bank may change you a fee to set up a banker’s draft.

When you do exchange payment for the ownership of the car it is important that the seller provides you with a receipt. Ask your seller to provide the following information on the receipt:

  • The date of the sale.
  • The car make and model.
  • The registration number or VIN.
  • Your name and contact details, alongside those of the seller.
  • The mileage at the point of sale.
  • A note of the agreed price, the method of payment, the amount paid and an acknowledgement that the seller is in receipt of the payment.
  • A signature from the seller and one from you.

The seller should provide you with a copy and retain a copy for their own records.

Download our sales receipt template

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