Should I Accept a Credit Card as Payment When Selling a Car?

Credit cards are great for everyday merchant transactions, but for high-dollar private-party car transactions, they’re complicated to use and risky.

We’ll break down why you shouldn’t accept payment by credit card. But we won’t leave you hanging; there’s a new way to get paid for your car that’s as fast as a credit card without the downsides.

Why Buyers Want To Pay by Credit Card

Buyers are usually the ones trying to pay by credit card in a car transaction; there’s basically no upside for you. Some buyers think they can come out ahead by using a credit card—until they face the following realities:

Buyer's logic Reality
Financing
A credit card is an easy way to finance a vehicle purchase I can’t afford.
Credit card interest rates are astronomical. A traditional auto loan is a much better auto financing option.
Credit
If I put this car on a credit card, I’ll build credit through the monthly payments.
A high credit utilization ratio might damage their credit score. There are much better (and less expensive) ways
Credit card rewards programs
I’ll get a lot of cashback rewards if I run this transaction through my credit card.
Processing fees exceed the benefits of any rewards.

Beyond being a bad payment option for the buyer, credit cards are a bad way for you to get paid.

Complex Setup

You probably don’t have the infrastructure to directly accept a credit card payment. That would include an account with a credit card processor, such as Stripe, and a card reader. While you could overcome these issues, they add unnecessary complexity and cost to the transaction.

Creating an account with a payment processor isn’t like signing up for a streaming subscription. It involves verification and onboarding, which is time-consuming and frustrating.

High Processing Fees

Stripe’s credit card fees typically run around 2.9% plus a small fixed fee. You have to pay that to run the buyer’s card. Let’s break down what this means for a $50k car transaction using Stripe:

  • Sale price: $50,000
  • Stripe fee: $1,450.30 (2.9% + $0.30)
  • Total price: $51,450.30

That’s a lot of money. Many buyers trying to pay by credit card probably aren’t aware of the credit card fees since they don’t deal with them at regular stores. While a buyer insisting on paying by credit should cover the fees, you might have to be the one to ask them to. That could get awkward and further delay the sale.

Buyer’s Credit Limits

Credit cards aren’t meant for larger purchases. They usually have credit limits that are too low for an outright vehicle purchase. If the buyer can’t cover the entire purchase price on a single card, they’ll probably want to pay with multiple credit cards.

Split payments introduce the potential risk that the deal gets stuck halfway. What if their first card works and the second card is flagged as an “unusual transaction” and declined? Either you’ll have to wait for them to figure something else out, or help return the payment. Both situations involve you wasting a bunch of time sorting out someone else’s problems.

Risk of Chargebacks

Even if you set up a credit card processor account, the buyer agrees to pay the credit card transaction fees, and you make it through the complex credit card transaction process, you’ll run into an even worse issue: chargebacks.

A private car transaction is done “as-is,” meaning that the buyer has the responsibility to do their research and make sure the car is solid. If a buyer doesn’t do their due diligence or a problem with the vehicle occurs soon after the sale, they might complain to their credit card company.

Credit card issuers almost always side with their clients. Whether or not they can successfully reverse the payment, they can attempt to legally strongarm you into returning the money. Disputes with credit card companies are time consuming and can become much more expensive than the vehicle in question if they take you to court.

If there’s one reason you should avoid credit cards, it’s this one. Don’t expose yourself to legal trouble to accommodate a seller’s payment request.

The Trust Problem

Whether you agree to receive payment by credit card, cashier’s check, wire transfer, or any other typical payment method, you’ll encounter a trust problem that plagues private-party car transactions. The buyer doesn’t want to pay until they’ve received the vehicle, and you don’t want to transfer ownership until you’ve been paid.

This catch-22 has traditionally been overcome through optimistic trust or escrow services. Escrow services are an expensive and time-consuming solution, and blind trust might cost you your car and your rightful money if you get scammed.

Fortunately, there’s a new way to get paid during private-party car sales that solves the trust problem and gets you paid instantly and securely.

DealNow

DealNow sidesteps the drawbacks of credit cards and other payment methods and lets you get paid from the convenience of your mobile device. It’s as convenient as a grocery credit card purchase with a full dealflow that handles every stage of a car transaction. Here’s why DealNow is great for car sellers:

  • Instant payments: You get paid as soon as the buyer sends the money—any time of day, every day of the year.
  • No payment limits: DealNow handles transactions of any size.
  • Flat fee: Say goodbye to percentage-of-transaction fees. DealNow charges one low, flat rate per transaction.
  • Bank-level security: The buyer sends your money to an FDIC-insured account with easy offboarding to your regular bank account.
  • Identity verification: You and the buyer undergo identity checks, reducing the risk of fraud.
  • Funds verification: Buyers must prove they have the funds to pay for your vehicle.
  • No more trust problem: Both parties sign a legally binding digital bill of sale before payment. You know you’ll get paid, and the buyer knows you’ll transfer the title.
  • Attractive buyer features: You won’t need to work hard to convince buyers to pay through DealNow. They can order a title check, vehicle history report, and a mechanical inspection directly through the app. If you’re selling the car long distance, they can even arrange shipping through our third-party affiliates.
  • Guided process: The app walks you through each step of the transaction.
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So say “No thank you” to credit cards, and get paid for your car the better way.

Credit Cards FAQ

What is the safest payment method when selling a car?

The safest payment method when selling a car is DealNow. Unlike physical cash (which can be counterfeit or stolen) or checks (which can bounce), DealNow facilitates instant, verified transfers of any amount directly between buyer and seller.

DealNow’s platform secures transactions by:

  • Verifying both parties’ identities.
  • Confirming the buyer has sufficient funds before the transaction.
  • Providing a digital bill of sale.
  • Enabling instant transfers without transaction limits.

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.

To avoid scams that target car sellers, use DealNow. Its identity verification, funds verification, and secure platform significantly reduce the risk of fraud compared to traditional payment methods.

To get the most money for your car, sell it privately instead of trading it in at a dealership. 

Here’s why:

  1. No middleman markup: Dealerships need to profit on your trade-in, so they offer less than a private buyer would pay.
  2. Pricing control: You set the initial asking price based on your research, not a dealer’s assessment.
  3. Highlighting unique value: You can emphasize features or maintenance that increase your car’s value.
  4. Flexible timing: You’re not pressured to sell immediately.
  5. Emotional appeal: Private buyers will pay more for a car that perfectly fits their needs or desires.

While selling privately requires more effort, it typically yields 15–25% more than a trade-in. Research your car’s value, create a compelling listing, and be prepared to meet with potential buyers to maximize your return.

Physical cash is awkward to deal with in large quantities. You’ve got to count it, you’ve got to verify that it’s not counterfeit, and you’ve got to get it to your bank without losing it. 

Instead of physical cash, get paid digitally. DealNow is as immediate and certain as physical cash, without all the risks. It’s the best way to get paid cash for your car.

A bank transfer is a fairly secure way to get paid for a car if you don’t mind some inconvenience and the exposure of your banking info to the buyer. For a more convenient, instant, and intuitive way to get paid, use DealNow.

Private car sales can be risky. Here’s how you can protect yourself from fraud:

  • Verify the buyer’s ID: Check their driver’s license and use payment methods that require ID verification to make sure you’re dealing with a legal person.
  • Beware of pressure: Walk away from buyers using high-pressure tactics.
  • Use secure payments: Avoid easily faked forms of payment.
  • Trust your gut: If something feels off, it probably is. There are plenty of honest buyers out there.
  • Use DealNow to close the deal. Invite the buyer to your private dealroom and enjoy identity verification, funds verification, and other safeguards.
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