Do you want to sell your car privately? Are you worried about accepting thousands of pounds in cash from a complete stranger? You should be. Here’s why, and how to get around it.
Money laundering and counterfeiting are real problems for the authorities, and efforts have been made over the last few years to crack down on these crimes. The car industry has been targeted for much of this illegal activity because cars are easily obtainable and highly mobile, meaning a criminal can pay for a car in dirty cash and literally have it out of the country before the cash is checked by a bank.
Car dealers often refuse to take cash at all
These days, most reputable car dealers will not accept more than a couple of thousand pounds in cash, and some won’t handle it at all on the sale of a car. Instead, they will insist on an electronic transaction via debit/credit card or bank transfer (well, after they have done their best to sell you their car finance offering). This protects their interests and makes the bank responsible for the legitimacy of the account in question.
As a result, counterfeiters and money launderers have been turning to private sellers to get rid of their ill-gotten or counterfeit cash. Once you sell your car, and have handed over the keys to somebody you can probably kiss goodbye to any chance of reclaiming your loss if the cash turns out to be fake.
So how do you deal with a buyer paying cash when you sell your car? You could ask them to transfer the funds into your account, but then you don’t really want to be giving strangers your bank details any more than you want to be taking their cash.
A bank cheque has traditionally been one option, but they can still be counterfeited (and would you actually be able to tell???), so that’s not much of an improvement.
The other nightmare scenario for sellers is that if you have taken a large amount of cash from a buyer, you then have at least one person who knows where you live/work and that you have a lot of cash on the premises right now. This is especially difficult if the transaction has taken place out of banking hours, so you can’t get to the bank until the next working day.
The best precaution to take when you sell your car
The best way to sell your car for cash is to arrange for the buyer to meet you during normal business hours and go with you to your bank. The bank will check the cash and count it on the spot, and it is immediately deposited into your account. You can then happily hand over the keys and wave goodbye without any stress, or the potential horror of turning up to the bank afterwards to find the money is no good and your car is long gone.
If the buyer has come to view the car out of business hours, you can ask for a small deposit and then have the balance paid as described above the next day.
If a buyer is not prepared to go along with this simple process (often making excuses that it is not convenient to meet during business hours), it is a warning sign and you should simply walk away from the deal with your car. If a dealership won’t risk accepting large cash payments, why should you?
Can you give car dealers cash? Buying a car with cash is harder than you might think.