For a high-dollar private-party car transaction, forget about using personal checks. Cashier’s checks are a solid option—but there’s something even better.
We’ll run you through the ins and outs of checks as a private-party car payment method. Then, we’ll introduce you to a better way to close the deal.
Personal checks (regular checks) are written transfer orders attached to a person’s checking account. When someone writes a check to someone else, the funds are drawn from the writer’s bank account.
Cashier’s checks are issued by a bank. When a person (the vehicle buyer) orders a cashier’s check, the bank issues the check while placing a hold on the same amount of funds from the buyer’s account. When the recipient (the vehicle seller) cashes or deposits a cashier’s check, the money is pulled from the bank’s funds instead of the buyer’s account.
Sellers usually won’t accept personal checks in private car transactions because they come with no guarantee. If the issuer (the vehicle buyer) doesn’t have the money in their account, the check will be rejected by the seller’s bank. This is called “bouncing” and it’s an unreasonable risk that no rational seller will tolerate.
There’s only one scenario in which a smart seller would accept a personal check: keep the car until the check clears and they have the funds in their account. This introduces unnecessary delays into the process, and most buyers won’t be thrilled about paying for a car and then waiting to get it.
A certified check has many similarities to a cashier’s check. In both cases, the bank verifies that a buyer has the funds in their account. Cashier’s checks are directly backed by the bank, while certified checks are not.
Certified checks are an awkward middle solution between personal checks and cashier’s checks. They are not universally offered by banks, are often more expensive than cashier’s checks, and are less secure than cashier’s checks. There’s no compelling reason to use a certified check; cashier’s checks are better in every way.
Cashier’s checks can’t bounce since the funds are backed by the issuing bank. While some institutions limit transaction sizes, cashier’s checks can cover the price of most cars. Buyers and sellers like them as an alternative to handling large amounts of physical cash during high-dollar car transactions.
Sellers also prefer them to wire transfers since there’s no need to exchange financial information. The buyer gets the check and gives it to the seller; any information exchange occurs between the banks instead of the transactors.
Cashier’s checks are a cheap way to avoid dealing with physical cash; they cost around $5–$15.
Skilled criminals use computer software, color copiers, and high-quality printers to forge cashier’s checks. They might go so far as to print fake contact information on the check so their victim is routed to an accomplice who “verifies” the check over the phone.
In a car transaction, the seller might transfer vehicle ownership believing they’ve been paid only to discover later that they’ve lost their vehicle and never had the money.
To avoid cashier’s check fraud, private-party car sellers should meet the buyer at the buyer’s bank during business hours and have the bank verify the check on the spot.
Cashier’s checks should always be verified before a transaction is completed.
There is no legally imposed limit for cashier’s checks; any limitations are set by the issuing institution. Small banks and credit unions often cap cashier’s checks at $10k to $20k, but large banks can usually issue cashier’s checks for $1 million or more, well exceeding the price of most private-party cars.
A money order is a prepaid financial instrument used to transfer funds, typically for smaller amounts. They’re sort of like a check that isn’t tied to a bank or the purchaser’s bank account. And they’re a bad alternative to cashier’s checks.
Unlike a cashier’s check, which is issued by a bank and drawn from the bank’s own funds, a money order can be purchased from post offices, convenience stores, and financial institutions.
Unlike cashier’s checks, money orders generally have maximum transaction limits of $1000, and customers are often not allowed to buy more than two or three in a day. If someone wanted to buy a car for $10k, they would have to spend 4–5 days purchasing money orders to pay. Cashier’s checks have no transaction limits and are a much better option for high-dollar car sales.
Poor security has made money orders a favored tool of chargeback scammers. Since they’re not linked to identification or bank accounts, they can be hard to track. Similar to personal checks, the funds from money orders are deposited immediately, but if the money order is later discovered to be fraudulent, the funds will be withdrawn from the recipient’s account.
With cashier’s checks, as long as the recipient verifies the check, there is no doubt it is authentic and backed by the issuing bank.
Sellers have no good reason to accept money orders in a car transaction, and buyers have no good reason to try to pay with them.
Private-party car transactions (and other high-dollar purchases) have an inherent catch-22. Both parties want to finish the deal, but neither wants to fall victim to predatory intent on the part of their counterparty.
Many people use an escrow service to overcome the catch-22. Escrow acts as a neutral third party, holding the buyer’s funds until the sale conditions have been met and then releasing them to the seller. But escrow services are expensive and time consuming.
A bill of sale creates accountability within private transactions. It is a legally binding document, signed and countersigned by both parties. Should either party have dishonest intentions, the counterparty has a document that would prevail in court.
It’s fairly simple to print off two copies of the official bill of sale for the state in which the transaction occurs. For states that don’t have an official bill of sale, a generic template is equally valid. Before money or car title exchange hands, the buyer and seller can fill out both copies, sign, and countersign.
Two vulnerabilities exist with bills of sale:
A digital bill of sale—stored in the cloud, signed and countersigned under both parties’ verified identities—overcomes these vulnerabilities.
DealNow gives the certainty of a bank-verified cashier’s check without the hassle and risk. Forget about visiting banks, dodging scams, and dealing with transaction limits.
During a DealNow transaction, both parties sign a digital bill of sale that’s stored in the cloud and always available through your DealNow dashboard. Our high-tech approach solves the trust issue and keeps your records protected against loss, damage, or theft.
Here’s what you can expect when you do your deal with DealNow:
We’re more than a payment method. We’re a complete platform for conducting safe, speedy private-party car transactions. So skip the check, and make a deal now.
he best form of payment when buying a car is DealNow. DealNow combines the safety and confidentiality of a bank with the speed and convenience of a mobile payment app.
Here’s why buyers love paying with DealNow:
And with so many perks for sellers, DealNow is the best way for both parties to exchange large sums of money during a car transaction.
It is safe to accept checks as payment if you verify the check or wait until it clears to finish your deal.
Personal checks can bounce, so you have to wait until the check clears to complete your transaction.
Cashier’s checks are backed by the bank’s funds. Once you verify the check, you can rest assured the money will make it to your account.
If you’d like a safer way to get paid, try DealNow. Our identity verification and built-in safeguards protect against fraud and scams, so you know you’ll get your money when the deal is done.
When accepting a check you need to look out for these common signs of fraud:
Always verify the check with the issuing bank and wait for it to fully clear before releasing your vehicle. If something feels off, trust your instincts and proceed with caution.
DealNow is the best form of payment when selling a car. Unlike checks, we do instant, verified transfers of any amount directly between you and the buyer.
DealNow’s platform secures transactions by:
With DealNow, you get the immediacy of cash with Venmo-like mobile simplicity. Funds are held in FDIC-insured accounts with easy offboarding to your regular bank.
A legitimate cashier’s check can’t have insufficient funds. Unlike personal checks, cashier’s checks are drawn directly from the bank’s own reserves, not an individual’s account. When a cashier’s check is purchased, the buyer provides the funds upfront, which the bank then guarantees.
This doesn’t mean cashier’s checks are immune to fraud. While the check itself can’t “bounce” due to insufficient funds, bad actors create counterfeit checks. Always verify the check’s authenticity with the issuing bank before completing your sale.
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.
