Electronic payments through the ACH network handle millions of direct deposit paychecks and tax refund distributions daily. But should you use an ACH transfer to buy a car from a private seller? While possible, ACH transfers are slow and restrictive.
Explore ACH transfers and their downsides for private-party car payments. Then, discover a better way to pay for your next vehicle.
An ACH transfer is an electronic transfer that moves money between bank accounts in the United States through the Automated Clearing House, a network that processes fund transfers.
ACH transfers handle often handle these types of payments:
ACH transfers have low operational costs, and they are secure. That’s why they are used for recurring monthly bill payments. While uncommon, you can pay for a car with an ACH transfer.
The process of using an ACH transfer to buy a car is similar to using a wire transfer.
The whole process is finished in about a week. Also like wire transfers, ACH transfers are highly secure and final; you avoid physical exchanges and sellers enjoy knowing that the payment is irreversible.
While ACH transfers are straightforward and safe, they’re a relatively bad way to pay for a private-party car.
ACH money transfers process in batches instead of in real time. Your payment will take 3–5 business days to reach the seller. That’s painfully slow compared to other direct payment options. You’ll be stuck waiting days between paying for your car and driving it home.
To send an ACH transfer, you need detailed banking info from the seller. Many sellers are understandably uncomfortable sharing their account details with strangers. Scammers who target car sellers often request ACH or wire transfers to collect information for identity theft. To protect themselves, sellers might want to bring an expensive escrow service into the deal.
ACH transfers only process during banking hours on business days—so no evening, weekend, or holiday transactions. Even worse, transfers initiated late in the day might roll into the next day’s batch, adding more time to the transaction process.
Some sellers just won’t agree to an ACH transfer. While uncommon, banks can reverse ACH transfers under certain conditions. You could issue a stop payment request. Each bank reverses payment on a case-by-case basis, but most sellers don’t want to deal with the risk of handing over their car and having their payment revoked. Even though the funds are guaranteed once payment is sent, many sellers will insist on waiting through the clearance and transfer to hand over the car.
A trust problem plagues private-party auto purchases: you don’t want to pay until you’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 some other common payment method, both parties either hope for the best, sign a bill of sale, or turn to an escrow service to solve this catch-22.
Keep reading to discover a new way to pay that dodges delays, brings trust to the transaction, and protects both parties.
ACH transfers and wire transfers move money between banks, but they operate across different networks and serve different purposes.
The wire network:
The Automated Clearing House:
Bank wires are a better way to pay for a car. 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 tired of compromising on payment, we’ve got an alternative to wire transfers and ACH transfers (and every other payment method) that lets you finish the deal on your terms.
DealNow combines secure transactions with instant payments. Buy your next car from the convenience of your phone, and enjoy a digital payment platform that eliminates the hassles of ACH transfers. You get:
DealNow guides you through a simple, step-by-step buying process:
So skip the bank-to-bank hassle, and get your next car the smart way.
Standard transfers through ACH take 3-5 business days to complete because they process in batches rather than real time. While same-day ACH payments exist, they cost more and still only work during banking hours. If you need speed and convenience, use DealNow for instant payments at any time.
DealNow is the safest payment method for buying a car from a private seller. Unlike traditional P2P payment apps or direct payment methods, DealNow provides:
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 onboarding from your regular bank or credit union.
Transfers from savings accounts are possible, but they might have additional restrictions. Federal Regulation D limits certain types of withdrawals from savings accounts to six per month. Some financial institutions also impose lower transfer limits for savings accounts. If you’re buying a car, use a checking account—or better yet, use DealNow to avoid these limitations.
Incorrect payment details are a common error with ACH transfers. Fixing an erroneous transfer can take weeks. Your bank must investigate the incorrect ACH debit transaction and work with the recipient’s bank to resolve it. DealNow eliminates this risk by verifying all payment details before processing.
You don’t need an escrow service to buy a car. 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.
Personal checks are the least secure payment method for sellers, especially in high-value transactions such as car sales. Here’s why:
Avoid trying to pay using personal checks, since most sellers won’t agree to them anyway. Instead, use DealNow for secure, verified, and irreversible payments to bring confidence and trust to the transaction.
Many scams target car buyers. Here’s how to protect yourself:
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.
