Selling a car: payment and advice
When selling your car, there are certain steps you should take to make sure payment is processed quickly and reliably. Most importantly, you’ll want to protect yourself against theft, fraud and time wasters. Never hand over the car or any paperwork until you have been paid the full agreed price.
Take a deposit
Once a price has been agreed, take a deposit, and make it clear that it is non-refundable. That way, if the buyer pulls out and you have to re-advertise, you won't be out of pocket.
Be wary of anyone who has lots of money in cash. Counting large amounts of money is not quick, and if you rush you could miscount or fail to spot counterfeit banknotes. The buyer may also be trying to launder stolen money. If you must accept cash, then pay it into your bank before you hand over the car.
Cheques and banker’s drafts
Don't assume a banker's draft is as good as cash. They can be forged, and even the banks themselves can be taken in for a couple of days before they realise it’s a forgery and reject it. Combat fake banker's drafts, bouncing cheques or a potentially fraudulent foreign buyer by waiting six full business days for the funds to clear. Under banking rules introduced in 2007, you're guaranteed that the bank will pay the funds, even if the buyer's cheque turns out to be fraudulent at a later date.
CHAPS payments or other direct money transfers are safest when selling. This method is quick, and you'll know that the money is ‘real’ as soon as it’s in your account.
Money transfer and escrow companies are not especially common in the UK, and they're an easy way for criminals to exploit buyers. Escrow is a method of holding a payment in trust until the car has been delivered. It's not a bad system, but you need to be sure that you're dealing with a legitimate escrow company and that the person collecting the money is who they say they are. Money transfer companies are just as prone to fraud, and the use of forged passports and identification documents means that anyone could walk in and collect the money.
Put it in writing
Prepare two copies of a written sales agreement and make sure you both sign and date each copy. Include the following:
- Car’s make and model
- Registration number and VIN (vehicle identification number – see your V5C)
- Year of registration
- Agreed sale price and the deposit paid
- Buyer's name and address
- Your name and address
- State that the vehicle is 'sold as seen'
Last updated: about 3 years ago