If you don’t handover at the bank, make sure you count the money and be careful walking around with large sums of cash.
It’s quite possible the buyer might not be keen to wait for the several days this can take, but a genuine buyer should be prepared to do so. There can be limitations to bank transfers, for example:
- CHAPS (Clearance House Automated Payment System) may charge a fee for use
- If using ‘Faster Payments’ services, note that some banks have a limit on how much you can send
Before you hand over the car, you should confirm with your bank that the funds have cleared, which is not the same as the funds appearing in your account. There’s also the option of a banker’s draft, which is guaranteed by a bank. Be aware these can also be faked, so it’s a good idea to go to the bank with the seller where the funds can be drawn. A banker’s draft doesn’t clear immediately, so again the seller will probably want to wait for the funds to clear before letting you drive away.
If you use this method, make sure the company is legitimate by checking with the Financial Conduct Authority, who keep a list of unauthorised firms and individuals to avoid. Finally, no matter how the money changes hands, the most important thing is that you should provide a receipt to the buyer, and keep a copy for yourself.
- Never send money abroad
- Never pay a large deposit
- Don’t hand over your vehicle until you’re satisfied the funds are in your account. Check with your bank you can withdraw funds safely on the cheque
- Remember your bank will not honour fraudulent drafts or drafts that cannot be cleared through lack of funds
- Don’t be pressured into releasing your vehicle. A genuine buyer will not mind waiting until the draft has cleared
The typical scenario will run something like this:
- First, you receive a cheque from the buyer
- Days later, your bank informs you the cheque was forged
- The result is the buyer has already taken possession of the vehicle and you’re left without payment
- First, the buyer transfers the payment to the escrow service
- Then, the buyer takes delivery of the goods
- Finally, the escrow service releases the payment to the seller Some are entirely above board; however, others are fraudulent services which appear legitimate, but are run by fake ‘sellers’ who target unwitting buyers
- A legitimate service will never ask you to wire the funds directly to another party
- Look for sites which have a padlock icon at the bottom of your screen and ‘https://’ at the start of the website address – this means the site is secure. Avoid ones that don't.
- If you’re suspicious, type the company’s name into a search engine. A legitimate escrow service will have a number of results listed, whereas a fake escrow site will have very few
- When receiving cash, ask for the money to be handed to you in a bank, where the notes can be checked for forgeries and paid in immediately
- If you take a cheque, never let the buyer have your vehicle until the funds have appeared in your bank account, as the cheque could be forged, cancelled or stolen
- Bank drafts, contrary to common belief, are not as good as cash, so treat them just as you would a personal cheque
- An online bank transfer is one of the safest ways to pay, as it avoids having to handle large amounts of cash and the problems associated with cheques