When you’re buying or selling a car privately, traditional payment methods come up short. Most ways of moving money are inconvenient, risky, time-consuming, or expensive—sometimes all of the above.
We’ll help you separate the good from the bad, and show you a new better player in the private-party transaction game.
Before exploring individual payment methods, we’ll examine why large money transfers between strangers are challenging.
A catch-22 occurs during any high-dollar transaction between strangers. The buyer doesn’t want to pay without some assurance that they will get the item, and the seller wants the money before they hand over the goods. They both want to finish the deal, but neither party wants to become the victim of fraud or crime.
In low-dollar transactions, this issue is minor. But the higher the price tag, the more sharply both parties feel exposed to risk and want assurances that they’ll be protected.
Keep this issue top of mind as we explore the payment methods available for a vehicle transaction.
Physical cash has one big advantage: you get paid on the spot. No bounced checks, no waiting for funds to clear. But for high-dollar car sales, cash is a bit risky and awkward. Here’s why:
Cash might work for lower-priced vehicles or when dealing with friends and family. For a high-value car transacted between strangers, a more robust, convenient, and secure solution is needed.
Sellers don’t accept personal checks for good reason: there’s no way to verify whether the check will clear. A seller has zero visibility into the buyer’s bank account and doesn’t want to be left with a worthless piece of paper and no car.
Cashier’s checks are a fairly secure payment method for two strangers to finish a high-value transaction. The bank verifies the buyer’s funds and issues them a check that can’t bounce.
They’re not foolproof—skilled forgers can create convincing fraudulent cashier’s checks. To securely transact with cashier’s checks, the buyer and seller should meet at the buyer’s bank so the seller can verify the check; the seller can also call the bank using a publicly available phone number from a trusted third party (Google, Yellow Pages).
Wire transfers are relatively fast and secure. When the originating bank confirms the wire, the seller has a high degree of confidence that they will receive the funds, even if it takes a few hours. But they do have some downsides.
Most private sellers lack the infrastructure to process credit card payments directly. And business owners with card readers won’t want to mix personal vehicle transactions with business revenue.
For those determined to use credit cards, third-party payment processors such as Stripe offer a solution—but at a cost.
Here’s a breakdown for a $35,000 car:
The seller isn’t going to take that thousand-dollar hit. They’ll push it back onto the buyer (who reaps the rewards in the form of cashback points) or insist on a different payment method. Sellers also dislike credit cards because the risk of chargeback leaves them exposed to ongoing hassle from a disgruntled buyer.
Peer-to-peer payment apps such as Venmo, Cash App, PayPal, and Zelle are great for splitting dinner bills. For auto transactions, they fall short.
Escrow services solve the catch-22 of trust—for a price.
A bill of sale is a legally binding document, signed and countersigned by both parties. Should either party have bad intentions, the counterparty has a document that would prevail in court. This gives the buyer some security that they are legally protected, and allows the deal to move forward.
A bill of sale records the terms of the transaction. Most states have official bills of sale with the following fields:
It’s simple to print two copies of the official bill of sale for whichever state the transaction occurs in. For states that don’t have an official bill of sale, a generic template is valid. Before money or car title exchange hands, the buyer and seller can fill out both copies, sign, and countersign.
Printed bills of sale are still susceptible to two edge-case vulnerabilities:
The best solution is a digital bill of sale—stored in the cloud, signed and countersigned under both parties’ verified identities. That’s where DealNow comes in.
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.
Here’s how easy it is to use DealNow:
Instead of weighing the pros and cons of different payment methods, why not do your next transaction with a platform that’s got it all?
The safest payment method when selling a car is DealNow. Unlike checks and physical cash, DealNow facilitates instant, verified transfers of large amounts of money directly between buyer and seller.
DealNow secures transactions by:
With DealNow, you get the immediacy of cash with bank-level security. Funds are held in FDIC-insured accounts with easy offboarding to your regular bank.
There is no standard maximum amount for cashier’s checks, but most banks have limits of $10,000 to $50,000.
Here are some common cashier’s check maximums at top U.S. banks:
Unless you live in a tax-free state, you’ll need to pay sales tax on your car purchase. Other than that, there aren’t many tax implications when buying a car—whether you pay cash or get a car loan.
Most sellers want immediate, guaranteed payment when handing over their vehicle. They’re unlikely to accept the risks associated with personal checks for such a high-value transaction.
While it’s technically possible to use a debit card for a car purchase, it’s not commonly accepted in private sales. Most debit cards have daily spending limits that are lower than the typical cost of a car. And most private sellers lack the infrastructure to run a debit card.
Transferring money between banks for a car purchase can be done through wire transfers or ACH transfers. These transfer methods can be slow and often involve additional transfer costs.
A more efficient option is using DealNow, which allows for instant transfers between verified parties without exposing sensitive bank account details.
While popular money transfer apps such as Venmo or PayPal might work for small transactions, they’re pretty bad for car purchases due to transfer limits, high fees, and security concerns. DealNow is specifically designed for high-value transactions such as car sales, offering instant transfers, no transfer limits, and built-in security features.
To avoid sending money to the wrong person, always verify the seller’s identity and use a secure payment method.
DealNow helps prevent this issue by verifying both parties’ identities and facilitating the transaction within a secure environment, reducing the risk of sending funds to an unintended recipient.
Transfer limits vary depending on the payment method. Traditional money transfers and many digital wallets have daily or per-transaction limits that can be lower than the cost of a car.
DealNow handles high-value transactions without transfer limits, making it a great choice for car purchases of any amount.
To protect your bank account details, avoid sharing them directly with the seller. Instead use DealNow to keep banking details private, allowing you to complete the transaction without exposing sensitive financial information to the other party.
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.
