You’ve put aside enough money to pay for your car upfront instead of taking out a loan. Smart choice. You’ll save a bundle by not paying interest.
If you’re buying a private-party car, you’ll need a way to get your cash to the seller. We’ll examine your options and show you the best way to pay for a private-party car. But first, let’s look at the benefits of paying cash versus financing a car.
If your financial situation allows, paying cash for a car is better than financing. Financing comes with a serious downside: interest. Depending on the loan terms and interest rate, you’re likely to pay thousands of dollars in interest over the life of the loan.
Your net worth will thank you if you pay cash for your car and avoid paying interest. It’s what savvy, wealth-conscious consumers do.
So why do people finance?
People finance cars for any of the following reasons:
Finance if you need to; pay cash if you can. Let’s look at the logistics of how to send your cash to the vehicle seller.
When you pay for a car with cold hard cash, there’s no waiting for funds to clear, and no transaction fees. Most sellers are happy to accept your physical cash.
All of that sounds great, but there are a few reasons to think twice before dropping a bundle of bills on a seller.
If you’re buying an old beater for a couple of thousand dollars, paying in physical cash seems fairly low-risk. But for a $50,000 Wrangler, it’s not worth it.
Most sellers won’t accept personal checks due to the risks of bouncing or fraud.
Cashier’s checks are a popular payment method for private-party car transactions. They’re issued by your bank, which guarantees the funds.
Because cashier’s checks can be forged, smart sellers will insist on meeting you at your bank for verification of the check’s legitimacy. This adds extra hassle to the transaction and limits you to banker’s hours.
Wire transfers offer finality and security. The bank verifies your funds and sends the payment to the seller’s bank account. They’re also time-consuming and clunky.
Here’s why you might want to skip wire transfers when paying cash for a car:
The best way to pay with a wire transfer is to meet the seller at your bank early in the day. Have the seller sign a bill of sale, then send the wire. They should get the payment the same day and can then sign over the title.
Or, skip all that waiting and inconvenience, and use DealNow.
It takes a lot of time to withdraw, count, and inspect a large volume of cash. Where speedy in small amounts, cash is slow and cumbersome in large quantities.
Peer-to-peer payment apps are great for splitting dinner, but come up short when you need to send $70K cash for a nice car.
With a verified personal Venmo account, you can send up to $4,999.99 per transaction. If you’re buying a 1996 Camry, go for it. For most cars, $5K Venmo payments won’t cut it.
With a verified PayPal account, you can send up to $60,000 per PayPal transaction. If the sales price is less than that, you’re golden—if you don’t mind the fees.
PayPal charges a 2.9% + $0.30 fee for goods and services. For a $60,000 vehicle, that’s almost $1,800. The seller won’t want to absorb that entire amount, so expect to split it with them. $900 for the privilege of sending your money? Oof.
Zelle doesn’t allow large enough fund transfers for most car deals. Its limits vary by bank but are usually around $2,000 to $5,000 per day.
Like Venmo, Cash App doesn’t have high enough transaction limits to handle most vehicle sales. It caps out at $7,500.
Save the other apps for pizza night. DealNow gives you the convenience and immediacy of a payment app without transaction limits. Send as much as you want, whenever you want.
Perhaps you’ve got the cash, but you want to pay with a credit card to work on your credit score, stretch the payment date, or take advantage of cashback rewards. Most private sellers won’t be able to accept direct credit card payments. You’ll need to use an intermediary payment processor (Stripe is the most common).
Buying a Kia Telluride for $35,000? If you pay with Stripe, prepare yourself for disappointment:
The seller probably won’t be thrilled with coming out a grand short, so be prepared to pay half. There goes any cashback rewards you hoped for.
There’s no good reason to use credit cards. They’re an inconvenient and expensive way to pay for a car.
DealNow makes high-dollar cash transactions simple. It combines the immediacy and convenience of physical cash with bank-like security. Forget about counting bills, trading sensitive information, or waiting for payment confirmation—just quick, secure transactions from your mobile device.
DealNow is your partner in simple, stress-free, and secure auto transactions. Here’s how it works:
It’s that easy. After you’ve used DealNow, you’ll never want to buy a car any other way.
Here are some tips on how to save up cash for your next car:
A good rule of thumb is that 20% of your income should go into savings. Trying to save too much of your monthly income can cause money stress.
A bank transfer is a fairly secure way to pay for a car, if you don’t mind some inconvenience. It doesn’t offer any buyer protection, so make sure you’ve done your research before sending.
Here’s how to protect yourself in a private car purchase:
Remember, a little caution goes a long way. With DealNow, you get built-in safeguards and a secure payment process, making your car-buying experience safer and smoother.
The safest way for a seller to get paid for their car is DealNow. Unlike cash (which can be stolen) or checks (which can take a while to clear), DealNow facilitates instant, verified transfers of any amount directly between buyer and seller.
DealNow’s platform secures transactions by:
With DealNow, you get the immediacy of cash with bank-level security. Funds are held in an FDIC-insured account in your name, with easy onboarding from your regular bank.
Most states require the buyer of a car to pay sales tax on the purchase. There aren’t a lot of other tax implications.
If you’ve found a good used car and are ready to buy it, an escrow service can help the private-party transaction go smoothly—if you don’t mind some inconvenience and expense.
DealNow gives you escrow-like safeguards in the palm of your hand. Skip the time-consuming escrow process and get instant protection in a mobile app.
Buying a car from a private seller isn’t just faster—it’s often cheaper too. Here’s why:
Read our article on private-party vs dealer cars for the full scoop.
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.
