Selling a Used Car? Watch Out for Trouble
With the economy in the ditch, used car sales are on the rise.
According to Edmunds.com, used car sales have outpaced new car sales so far in 2009. Used car dealers are also peeling some dollars off the cost – Edmunds says that used car prices are down 10% so far this year. More appealing to value-hungry buyers, used car prices are about 32% less than the price of a brand new car.
With demand on the rise, it might be a good time to unload that 2005 Sebring sitting in your garage. If you do, make sure you cross every "t" and dot every "i," especially when it comes to actually getting paid for your vehicle.
Why is that? It’s all too common for used car sellers to get fleeced by unscrupulous buyers. Usually the scam comes in the form of accepting personal checks that don’t clear the seller’s bank account. Another common shakedown is the seller agreeing to a bank wire transfer – only to wait and wait in vain for the money to hit the account. Even cashier's checks may be counterfeit, if the buyer knows what he’s doing.
So how can you protect yourself on transaction day? Start with these simple, but effective, steps.
Ask for cash. At first blush, accepting thousands of dollars in cash seems like something you’d see on a Sopranos rerun. Certainly, you shouldn't just take any cash payments on the street, in a parking lot or even at the buyer’s home. Your best move is to meet the buyer at your bank, take the cash payment, and immediately deposit it in your bank account. If the buyer balks, move on. Any above-board buyer won’t mind meeting at your bank. It’s a big red flag if the buyer refuses to do so. A quick note: bring a bill of sale along if the cash value is more than $10,000. Your bank will need that to report the deposit.
Meet at the buyer’s bank. If, for some reason, you can’t meet at your own bank, meet at the buyer’s bank. When that happens, ask for a cashier’s check made out to you. That will forestall any counterfeit check activity and guarantees your payment. Also, make sure to offer to cover the fee for the check – it’s a nice touch and won’t cost you much.
Accept a check, but hold on to the keys. If your buyer absolutely insists on a personal check, go ahead and take it. But don’t pass over either the paperwork or the keys to the car until the check clears. That’s what sellers do on auction sites like eBay (Stock Quote: EBAY), so the buyer should neither be surprised nor offended by the delay. When you get the check, bring it down to the buyer’s bank for verification the first chance you get.
Opt for Escrow. Online payment sites like Escrow.com and Paypal.com are great for online buyers – usually people from out-of-state, although escrow accounts can work for anyone. Such sites accept funds, hold them and disburse payments in a guaranteed manner. As the seller, just wait for word that the money has hit your account, then go ahead and deliver the car to the buyer.
As the seller, it’s your responsibility to deliver the car’s title to the buyer, Make sure you visit your local department of motor vehicles and turn in your license plate. Get a receipt for it – your auto insurer may need it to cancel your policy.
All in all, selling a car should be a painless experience – as long as you take the steps necessary to protect your end of the deal.
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