How Do I Ensure a Payment Check Is Good When Selling My Car Privately?

Cash is king, but sometimes a check can suffice.
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A private car sale eliminates dealer involvement because you're not selling your car to or through a dealer. Consequently, selling your car privately to an individual can be an effective way to maximize your profit from the sale because you don't have to worry about the dealer reducing his asking price to meet his resale margin. Although you can walk away from a private car sale with more money in your pocket, you also have more potential risk when you receive a payment check from a buyer. Make sure the payment is secure before you let someone drive off with your car.

Types of Checks

A buyer might want to pay for a car purchase with a variety of different kinds of checks. A personal check is written from the buyer’s checking account. A cashier’s check is one issued by a bank and sold to the buyer. Cashier’s checks represent an obligation of the bank for the amount. Banks also issue certified checks, which certify that the buyer has sufficient funds in an account to cover the amount of the check. Of these three options, a personal check offers the fewest safeguards, while a cashier’s check offers the most guarantee – but only if the check is genuine.

Verify the Check

When a buyer offers you any type of check to pay for a car, you will need to verify the authenticity of the check to prevent fraud. Before you accept any type of check, call the issuing bank and provide the numbers from the check for verification purposes. If the bank is local, take the check to the bank in person and ask a customer service representative to verify it. The bank will attempt to verify the check to make sure it’s genuine.

Waiting Period

After verifying a check, you’re not done waiting. First you must deposit the check into your bank account. Even if your bank makes the funds available to you, it’s wise to wait to finalize the sale until the check clears the issuing bank and the funds release into your account. This process takes an average of one week, but it could be longer. If you don’t wait for the funds to clear, and the issuing bank returns the check unpaid, your bank will reverse the deposit and deduct the deposit amount from your account.

Avoid Unusual Requests

Sometimes unscrupulous buyers will make unusual requests in an effort to scam you. A common ploy involves offering you more than your asking price with the agreement that you’ll pay the buyer the difference in cash. In this case, the check will be worthless and you’ll be responsible for the entire amount. If a buyer ever offers you an alternative payment arrangement that seems too good to be true, consider it a red flag of a possible scam. If a buyer offers you a check that you can’t verify, insist on either cash or a cashier’s check drawn on a local bank.

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