ACH transfers handle payroll payments for millions of Americans. But are they a good payment method for private-party car transactions? While possible, ACH transfers are slow and restrictive.
We’ll discuss the pros and cons of ACH transfers for private car transactions. Then, we’ll introduce you to a better way to finish the deal.
An ACH transfer is an electronic bank-to-bank money transfer processed through the Automated Clearing House network, which moves money between bank accounts in the United States.
ACH transfers are commonly used for:
ACH transfers are low-cost, secure, and reliable.
The process of using an ACH transfer during a private-party car sale is similar to using a wire transfer.
While ACH transfers are straightforward, they’re a pretty bad payment method for private-party car sales.
ACH transfers are processed in batches. They generally take 3–5 days to clear and enter the buyer’s account. This is cripplingly slow compared to other direct payment methods. During private sales, the buyer is stuck in limbo; their funds are gone, but they haven’t yet gotten the car.
To initiate the transfer, the buyer needs a lot of sensitive information from the seller. When dealing with a stranger, private sellers might rightfully not want to divulge their banking information. Scammers that target car sellers use ACH or wire transfers to collect information that could be used for identity fraud. While the ACH transfer is secure, the initiation process puts sellers at risk.
ACH transfers only occur during business hours. That means no transactions in the evening, on weekends, or on holidays. Even worse, ACH transfers initiated late in the business day might get placed in new batches and processed even later, adding more time to the transaction.
While rare, banks can reverse ACH transfers for several reasons. The buyer can issue a “stop payment request” on an ACH payment that hasn’t cleared. Sellers unfamiliar with the process might finish the sale after payment initiation only to later discover a criminal buyer has taken their car and canceled payment.
A trust problem plagues private-party auto transactions: the buyer doesn’t want to pay until they’ve received the vehicle, and the seller doesn’t want to perform the title transfer until they’ve been paid. Whether using an ACH transfer or another common payment method, both parties either hope for the best or resort to an escrow service to solve this catch-22.
Keep reading to discover a new payment method that dodges delays, brings trust to the transaction, and protects both parties.
ACH transfers and wire transfers are similar in that they facilitate bank-to-bank payments, but they operate across different networks.
The wire network:
The American Clearing House:
Bank wires are a better payment method for car transactions. They’re faster and final, but they still need to occur during business hours, take a while to process, and require the seller to divulge sensitive banking information. If you’re ready for a better solution, you’re ready for DealNow.
DealNow facilitates instant, secure, private-party payments. Finish a deal from the convenience of your mobile device, and enjoy a digital payment platform that sidesteps the downsides of ACH transfers. Here’s what you get with DealNow:
So let ACH handle payroll, and let us handle your next car transaction.
ACH transfers regularly take 3–5 days. They take a while because they are processed in batches instead of in real time. Bank transfers are a faster alternative that processes in about a day, but if speed is your priority, use DealNow as your payment method. DealNow facilitates secure, instant payments of any amount from the convenience of your mobile phone.
The safest payment method when selling a car is DealNow. Unlike Venmo, DealNow does instantaneous, verified transfers of any amount directly between the seller and the buyer.
DealNow’s platform promotes secure transactions by:
With DealNow, you get convenience and a transactional dealflow without limits on the transfer of funds. Funds are held in FDIC-insured accounts with easy offboarding to your regular bank or credit union.
Personal checks are the least secure payment method for sellers, especially in high-value transactions such as car sales. Here’s why:
To avoid scams, use DealNow. Its identity verification, title checks, and secure platform significantly reduce the risk of fraud compared to traditional payment methods.
Private-party sales can be risky. Here’s how to protect yourself:
You don’t need an escrow service to sell your car privately. DealNow offers escrow-like safeguards without the expense and hassle of an escrow service:
Use DealNow’s self-serve safeguards to save time and money.
DealNow is the easiest way to close your own vehicle deal, anytime. It’s the safe and simple way to avoid fraud, sign documents, and instantly transact, all in one app.
