Cash, check, or wire? The best way to accept payment for a car.
The best payment method when selling a car is one that protects both you and your buyer from fraud, is convenient, and doesn't have a high transaction fee. As a seller, if you don't suggest a mutually trusted way for your buyer to pay, you'll have a harder time selling your car. This article describes how to safely accept payment when selling a car using traditional methods like cash and cashier's checks as well as KeySavvy, which is specifically designed for vehicle transactions.
The table below compares common payment methods. "Seller Protection" is determined by how easily a payment method can be counterfeited and "Buyer Protection" is determined by how easily title fraud can occur. Note that fees for cashier's checks and wire transfers vary depending on the specific banks' policies and KeySavvy's fees are flat regardless of the vehicle's sale price.
It's not just what payment method you use, it's how you verify its legitimacy. If you accept cash, you should meet at your bank and deposit it immediately. If you accept a cashier's check, you should meet at the buyer's bank and have the teller hand the check directly to you. Meeting at the bank allows you to verify the legitimacy of cash and cashier's checks. You can read our articles about accepting cash and accepting a cashier's check for more details.
A wire transfer cannot be counterfeit or reversed. When selling your car, if you receive a wire transfer, then you can be confident the funds are in your account and are legitimate. You'll need to share your bank account and routing number with your buyer in order for them to pay you with a wire transfer.
The larger problem with a wire transfer is that it is not instantaneous and doesn't work on evenings or weekends. The buyer has to initiate the wire transfer at their bank and it won't arrive at the seller's bank for at least an hour or two after the buyer's bank sends it. Banks often hold outgoing wires for additional verification, and a delay of 1-2 banking days for larger wires is not uncommon. During that time, the seller won't want to give their vehicle to the buyer, but at the same time the buyer's money is no longer in their account. Your buyer may want you to wait around with them until the wire shows up in your account. As a result, wire transfers require that buyers have a lot of trust in their seller and it can be difficult to convince buyers to pay that way.
Getting a wire transfer might be the best option for you as a seller, but savvy buyers will hesitate to pay you that way. In fact, none of the payment methods above protect the buyer from title fraud. Once they pay you, their money is gone and they're on their own to make sure they can actually register the vehicle in their name. Take a look at all the ways buyers can get scammed on our ongoing post that compiles actual scam reports found on Reddit.
The best way for buyers to be protected from title fraud is to meet you at the DMV and register the vehicle right away. This only works if you have your title and aren't selling a vehicle with a loan. If anything is wrong with the paperwork, the DMV won't allow the buyer to register the vehicle, but you can both resolve the issue right away at the DMV.
You probably see the challenge here already. Do you meet at the DMV to protect the buyer. or do you meet at the bank to protect yourself? You can do both and go together from one location to the other - and many people do exactly that - but it is admittedly inconvenient.
KeySavvy guarantees sellers get paid and buyers get a clear title (even if the seller has a loan). With KeySavvy, buyers pay in advance and we verify their payment is legit. At the same time, we verify the seller's ownership of the vehicle and if there are any liens on the title. When the buyer and seller meet, we pay the seller when they hand over the keys. That way you don't have to meet at the bank or the DMV. If the buyer's payment is somehow reversed, it's on us to collect payment from them, not you.
You can get started as a seller here. Most transactions are completed within a day and our fee can be split evenly or paid entirely by you or your buyer.
If you have your title and are meeting your buyer in-person, it's fairly straightforward to safely accept payment for your car and offer your buyer peace of mind, too. If paying as small a fee as possible is important to you and your buyer, you can meet at the bank and go to the DMV to register the vehicle together. If you're looking for more protection or convenience, consider using KeySavvy.
About Andrew Crowell
Andrew is an avid car enthusiast, software engineer, and business leader in the automotive and e-commerce industry. He's owned a couple Mazda Miatas, an E46 M3, a Subaru WRX STI, and a Porsche 911 Turbo.