There are few times in our lives where we will we put so much trust in a total stranger than when selling a car.

    You’ve written a great ad, taken some amazing photos, and someone has come to look at the car – and agreed to buy. It’s a great feeling, especially if you’re getting an amazing price. The Milky Bars are well and truly on you.

    But how should you accept payment – especially when we’re taking potentially tens of thousands of dollars?

    In this article, we’ll explore the four safest and most secure methods for accepting payment for a vehicle from a buyer – and a few tips on what not to do.

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    It’s good buying and selling practice to keep written and signed evidence at every step along the way, especially when any sum of money has been exchanged. Once you’ve struck a deal with a buyer, put the agreement in writing. This helps protect you, and could be as simple as this:

    • Date of agreement: 15/01/2023
    • Address: 123 Holden Street, Toranaville VIC 3210
    • Contact phone: 0401 234 567
    • Contact email:
    • Agreed price: $32,600
    • Description of vehicle: 2017 Holden Commodore SS-V Redline manual sedan (red)
    • VIN number: ABCD0123456789012 (available on rego papers)
    • Registration number: UBEWDY
    • Deposit amount (if any): $3260
    • Payment method: Bank transfer
    • Date of transaction: 17/01/2023
    • List of inclusions: genuine floor mats, genuine towing kit
    • Agreed items to be repaired prior to purchase: chipped windscreen, rear tyres
    • Signed by buyer: J Bloggs

    Once you’ve got the commitment, you can agree with the buyer on the best way to receive the funds.

    Here are the best four options for receiving payment when selling your used car:

    Online bank transfer

    The buyer transfers the agreed amount to your account, and then picks up the car once you’ve seen the funds clear into your account.

    This takes some trust on the buyer’s part, and they might prefer something else like a bank cheque (below). But if you proceed with a bank transfer, you should never hand over a car before funds have cleared – a common scam is the buyer transfers to you, shows you their phone with their banking app and details of the completed transfer, only to cancel the transfer later before the funds have cleared. When they have your car.

    Instant bank transfer, in-branch

    This only works if you and the buyer use the same bank. Meet at a branch and ask the teller to transfer the funds from their accounts to yours, instantly. Done, and with the added safety of a public environment and CCTV cameras.

    If you and the buyer have different banks, you could even consider opening an account with the same bank as them to enable this excellent, safe and foolproof option.

    Often it’s quick to open an account with a new bank, easily done online, and free. And just as easy to close the account afterwards.


    It doesn’t get more instant or clear-cut than cash, however it starts to get somewhat impractical for bigger purchases.

    Large sums of cash mean that both you and the buyer will end up going to a bank (them to withdraw, you to deposit later), so you may as well go with them and do the direct transfer as mentioned above – or consider a bank cheque (below).

    Doing so also saves the dodgy counting of large sums of cash in a car park somewhere; and then having a huge amount of cash on your person afterwards.

    Bank cheque

    The seller asks the buyer to go to their bank and get a cheque drawn up for the required amount. Cheque and keys are exchanged and the deed is done.

    Note that bank cheques, while generally secure, can be cancelled – and it takes up to three days for a bank cheque to clear.

    A bank cheque is different from a personal cheque, which can bounce. Don’t accept a personal cheque.

    Here are six other things to keep in mind when selling a car

    1. Ask for a cash deposit of 10 percent. If a prospective buyer is keen after looking at the car, ask for a 10 percent cash deposit in order to hold the vehicle for them until you’ve received the full amount. This also guarantees that they are genuine. Provide a basic receipt to the buyer for their deposit, and expect to refund it to them – in cash, ideally – if things go awry.

    2. Don’t use PayPal. It’s not secure enough for something like selling a car, and PayPal doesn’t offer its Seller Protection for people selling vehicles. Also, it’s been a favoured tool of scammers preying on people selling cars. On top of that, PayPal charges a 2.6 per cent fee for the privilege – if you’re selling a $50,000 car, who’s going to pay the $1300 fee? You or the buyer? A bank cheque is much more secure and safer, and might cost $5.

    3. Don’t use cryptocurrency. The early adopters reading this will staunchly disagree, but for the general public, we say don’t risk large sums of money that are yours, just so you can tell your mates you sold your Hilux for Bitcoin. It might be a viable option one day, but not quite yet.

    4. Avoid other online services. There are websites that offer to hold the buyer’s money and then clear it to you once they’ve received the car. However, the costs are exorbitant – and not worth it.

    5. Don’t accept a payment plan. Never hand over your car until you’ve received the full amount.

    6. Never transfer money to a potential buyer. Scammers love to come up with creative ways to get you to transfer them money (that you’ll never see again).

      One scam doing the rounds is a prospective buyer contacts someone selling a car, by email, and claims they are at sea and can’t call.

      They want the vehicle delivered to their house before they get back – however, the freight company wants to be paid its $1300 and only accepts Western Union. The would-be buyer says they can’t access Western Union at sea, so would you mind paying the $1300 on their behalf and they’ll add it on top of their online transfer?

      They send a fake online transfer receipt, only for the funds to never reach your account – and you’ve just learned an expensive lesson. The only time a seller might give a buyer money is if they’re returning a deposit. And remember if an offer looks too good to be true, it probably is.
    Dylan Campbell
    Dylan Campbell is a Contributor at CarExpert.
    Buy and Lease
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