Author Topic: How to Safely Exchange $25,000 for a Private Car Sale?  (Read 1618 times)

amodoko

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How to Safely Exchange $25,000 for a Private Car Sale?
« on: December 28, 2019, 03:45:25 PM »
(Since this post is a bit long, feel free to just go to the bottom of the post for my two questions in bold if you are interested in responding but don't have enough time to read everything)

I have sold a vehicle one time in my life for my parents, years ago, and accepted a cashier’s check and fortunately it all worked out.  However, that time the amount of money involved was much less than what I am dealing with now.  Now, I have to sell a car for my parents and the vehicle will sell for around $25,000 most likely.  That’s a bit much for me to not take more precautions.  I’ve done some research on this topic and am still a tad iffy about what is the most secure/safe way to exchange $25,000 between strangers for a car.  Here is what I found:

1) Cash is best, but with $25,000 it is a bit of an ordeal dealing with that many bills I would think. I’m not sure most buyers would feel comfortable to pay for the car in straight cash when the amount of money involved is so high.  I’m okay with this option, but not sure if it makes the most sense.  I’ve heard someone once say that you can open an account at the buyer’s bank so that they can just take the cash out of their account and then you just redeposit it back right there in the same bank.  Not sure exactly if that is what they said, but it was something like that. 

2) Cashier’s checks are better than personal checks, but they are not full proof even when you take precautions.  To be more specific, when accepting a cashier’s check you are supposed to go to the buyer’s bank where the cashier’s check will be issued from.  You stand in line with them and see the cashier’s check handed over from the bank teller to the buyer, written out to you.  This is to ensure that the cashier’s check is authentic and not fraudulent.   Then you do the title paperwork for the car, etc., and exchange documents and the deal is done.  The issue with this is that the buyer can still report the cashier’s check as stolen, lost, etc to the issuing bank and they can sometimes void it this way and then later the check can bounce after you’ve deposited it and you're essentially out of luck. 

3) Wire transfer.  I’ve never done this but apparently this is considered by some people to be safer than a cashier’s check.  If this is true, then maybe I should go this route.  The issue with this is the buyer must first deposit the money into my account, so the buyer doesn’t get much protection in this case since I have to wait until the funds clear (I believe it takes a few hours).  The other issue, is once again, I have heard that if the wire transfer is done from the buyer’s own personal computer that he can call the bank and say that his computer was hacked and he never initiated the wire transfer himself and the bank can actually reverse the transfer. 

So my questions are:

1) What do you consider to be the safest and most reasonable method from the seller’s viewpoint of exchanging such a large amount of money?  Just exchanging cold hard cash, or going to the bank with them to get a cashier’s check, or wire transfer?

2) If you choose the cashier’s check route, I am confused about one part of it.  When you go to the bank with the buyer and see the teller hand over a cashier’s check written out to you, I have read that the best step is to just “cash” the cashier’s check right there at the buyer’s bank and have another cashier’s check written out to you so the original cashier’s check is no longer able to be voided by the buyer with a lost/stolen claim on the original cashier’s check.  How does this even work?  Most banks can’t just give you $25,000 in cash I believe and that also seems a bit overkill for them to count out $25,000 just for you to go and give it back to them for another cashier’s check.  Or do people mean that when you “cash” a cashier’s check at the buyer’s bank that you just tell them you want them to cash it out in the form of another cashier’s check written out to you again?  I was a bit confused about that

Thanks for any help with this.  I’m trying to understand how to do this safely because I would prefer to sell my own vehicles in the future too, but if there isn’t really a safe way to do it then I will have to deal with just getting less money and going to a dealer to trade it in or going to CarMax. 

Clean Shaven

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Re: How to Safely Exchange $25,000 for a Private Car Sale?
« Reply #1 on: December 28, 2019, 03:49:45 PM »
Do #2. The teller can issue a bank check, with funds withdrawn from buyer's account - this is different from a cashiers check that could be reported lost.

I have done this a couple of times, as buyer and as seller. No problems.

amodoko

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Re: How to Safely Exchange $25,000 for a Private Car Sale?
« Reply #2 on: December 28, 2019, 03:59:38 PM »
Thank you for the quick response, but I tried to google "bank check" and it says that is the same thing as a cashier's check.  Which is a check written out from a bank to an individual.  Maybe I'm not understanding something though

norajean

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Re: How to Safely Exchange $25,000 for a Private Car Sale?
« Reply #3 on: December 28, 2019, 05:35:01 PM »
If it were me I would request cash from the seller. This can be exchanged at his bank, your bank or any secure location mutually agreed. You count it and sign over the title plus keys and whatever legal bill of sale you may have prepared. Then you deposit the cash in your bank at your convenience (or spend it or whatever). This avoids cashiers check fees and delays.

MilesTeg

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Re: How to Safely Exchange $25,000 for a Private Car Sale?
« Reply #4 on: December 28, 2019, 05:48:07 PM »
(Since this post is a bit long, feel free to just go to the bottom of the post for my two questions in bold if you are interested in responding but don't have enough time to read everything)

I have sold a vehicle one time in my life for my parents, years ago, and accepted a cashier’s check and fortunately it all worked out.  However, that time the amount of money involved was much less than what I am dealing with now.  Now, I have to sell a car for my parents and the vehicle will sell for around $25,000 most likely.  That’s a bit much for me to not take more precautions.  I’ve done some research on this topic and am still a tad iffy about what is the most secure/safe way to exchange $25,000 between strangers for a car.  Here is what I found:

1) Cash is best, but with $25,000 it is a bit of an ordeal dealing with that many bills I would think. I’m not sure most buyers would feel comfortable to pay for the car in straight cash when the amount of money involved is so high.  I’m okay with this option, but not sure if it makes the most sense.  I’ve heard someone once say that you can open an account at the buyer’s bank so that they can just take the cash out of their account and then you just redeposit it back right there in the same bank.  Not sure exactly if that is what they said, but it was something like that. 

2) Cashier’s checks are better than personal checks, but they are not full proof even when you take precautions.  To be more specific, when accepting a cashier’s check you are supposed to go to the buyer’s bank where the cashier’s check will be issued from.  You stand in line with them and see the cashier’s check handed over from the bank teller to the buyer, written out to you.  This is to ensure that the cashier’s check is authentic and not fraudulent.   Then you do the title paperwork for the car, etc., and exchange documents and the deal is done.  The issue with this is that the buyer can still report the cashier’s check as stolen, lost, etc to the issuing bank and they can sometimes void it this way and then later the check can bounce after you’ve deposited it and you're essentially out of luck. 

3) Wire transfer.  I’ve never done this but apparently this is considered by some people to be safer than a cashier’s check.  If this is true, then maybe I should go this route.  The issue with this is the buyer must first deposit the money into my account, so the buyer doesn’t get much protection in this case since I have to wait until the funds clear (I believe it takes a few hours).  The other issue, is once again, I have heard that if the wire transfer is done from the buyer’s own personal computer that he can call the bank and say that his computer was hacked and he never initiated the wire transfer himself and the bank can actually reverse the transfer. 

So my questions are:

1) What do you consider to be the safest and most reasonable method from the seller’s viewpoint of exchanging such a large amount of money?  Just exchanging cold hard cash, or going to the bank with them to get a cashier’s check, or wire transfer?

2) If you choose the cashier’s check route, I am confused about one part of it.  When you go to the bank with the buyer and see the teller hand over a cashier’s check written out to you, I have read that the best step is to just “cash” the cashier’s check right there at the buyer’s bank and have another cashier’s check written out to you so the original cashier’s check is no longer able to be voided by the buyer with a lost/stolen claim on the original cashier’s check.  How does this even work?  Most banks can’t just give you $25,000 in cash I believe and that also seems a bit overkill for them to count out $25,000 just for you to go and give it back to them for another cashier’s check.  Or do people mean that when you “cash” a cashier’s check at the buyer’s bank that you just tell them you want them to cash it out in the form of another cashier’s check written out to you again?  I was a bit confused about that

Thanks for any help with this.  I’m trying to understand how to do this safely because I would prefer to sell my own vehicles in the future too, but if there isn’t really a safe way to do it then I will have to deal with just getting less money and going to a dealer to trade it in or going to CarMax.

Go to the bank with buyer. Buyer has teller issue you s bank check directly from buyer's account. They can't screw you by claiming it list or stolen if it's made out to you that way.

JLee

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Re: How to Safely Exchange $25,000 for a Private Car Sale?
« Reply #5 on: December 28, 2019, 05:55:56 PM »
I recently sold one of my cars on Bring a Trailer and the buyer paid me with a wire transfer. You could do that, or meet at their bank if your buyer is local.

amodoko

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Re: How to Safely Exchange $25,000 for a Private Car Sale?
« Reply #6 on: December 28, 2019, 06:06:46 PM »
Okay, just to be clear, I looked up a bank check and it is the same as a cashier's check.  They are essentially synonyms, unless I'm missing something here.  But a cashier's check is a check guaranteed by a bank, drawn on the bank's own funds and signed by a cashier.  So it seems when people are suggesting me to get a bank check, it means the same thing as suggesting me to get a cashier's check.  The issue with bank checks/cashier's checks is that even though the check is drawn on a bank's own funds they can still be cancelled.  Here is a link to an explanation of this:  https://firstquarterfinance.com/can-you-cancel-a-cashiers-check-stop-payment/  .  I'm okay with taking a bit of risk with a bank check/cashier's check once in a while but didn't know if there was a method to make the transaction safer or if there was a more practical/safe option to handle  these types of transactions. 

Okay JLee, so maybe a wire transfer is comparable to a cashier's check/bank check in terms of safety.  Still not sure what is considered the safest option so maybe I'll have to do a bit more research and talk to my bank and see what makes the most sense.  I appreciate all the suggestions, thus far.  Thanks everyone

Bernard

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Re: How to Safely Exchange $25,000 for a Private Car Sale?
« Reply #7 on: December 28, 2019, 06:07:00 PM »
I buy classic cars. On average, I spend about $2M in cash per year, the rest is primarily done via bank wire. Most SELLERS insist on cash, which is where the phrase cash is kind derives from. More times than I can remember I spent $100K in cash on a car and I always have tens of thousands of dollars in cash in my briefcase. (I also carry a concealed gun.) . But if you, the seller, don't require cash, the easiest way is to go to YOUR bank and have the seller deposit a cashier's check from HIS bank then and there in your presence. Unless you are dealing with a Nigerian prince, a cashier's check is as safe as a bank wire or cash.

amodoko

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Re: How to Safely Exchange $25,000 for a Private Car Sale?
« Reply #8 on: December 28, 2019, 06:11:32 PM »
Thanks Bernard, okay so you're saying if I don't require cash then a cashier's check is totally acceptable if I accept the cashier's check from the buyer and have him with me at MY bank and deposit the cashier's check at MY bank in front of him? 

Gronnie

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Re: How to Safely Exchange $25,000 for a Private Car Sale?
« Reply #9 on: December 28, 2019, 06:33:10 PM »
Cash.

$25000 cash will fit in your pockets and can be brought directly to your bank. If it makes you feel better you could even meet at your bank.

Dave1442397

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Re: How to Safely Exchange $25,000 for a Private Car Sale?
« Reply #10 on: December 28, 2019, 06:39:44 PM »
Cash is king. I sold a car for $12k. The seller came to my bank, handed $12k to the teller, who ran it through the counting machine and deposited it straight into my account.

secondcor521

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Re: How to Safely Exchange $25,000 for a Private Car Sale?
« Reply #11 on: December 28, 2019, 10:28:16 PM »
Another option is to go to buyer's bank and open an account with them.  Then, in front of a teller, have buyer write you a regular check drawn on his account at that bank, deposit that check from him into your new account.  Checks drawn on a given bank should have funds instantly available if deposited at the same bank.  Then transfer funds to your bank and close account at their bank at your leisure.

Fuzz

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Re: How to Safely Exchange $25,000 for a Private Car Sale?
« Reply #12 on: December 29, 2019, 03:24:43 PM »
My personal preference is for cash. And I like the idea of meeting at a bank lobby. If the other party insisted on a wire transfer or a bank check, then I would be hesitant to hand over the title until the transfer clears. My guess is that even a wire transfer can be reversed within 24 hours.

SunnyDays

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Re: How to Safely Exchange $25,000 for a Private Car Sale?
« Reply #13 on: December 29, 2019, 04:02:07 PM »
I bought an RV for the same amount using a certified cheque made out to the seller.  The funds were withdrawn immediately from my account and the seller was free to deposit any time he wished.  Since the funds are removed right away and I had to sign the cheque, I could not have put a stop payment on it.  Talk to your bank for advice.

Bernard

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Re: How to Safely Exchange $25,000 for a Private Car Sale?
« Reply #14 on: December 29, 2019, 07:03:11 PM »
Thanks Bernard, okay so you're saying if I don't require cash then a cashier's check is totally acceptable if I accept the cashier's check from the buyer and have him with me at MY bank and deposit the cashier's check at MY bank in front of him?

Yes, because YOUR bank can verify that check right then and there. Same applies to cash. I have had counterfied bills in big stacks of $100 bills. It happens. If the bank runs it though the counting machine, you can be assured that you are in the clear. The disadvantage for the buyer is that he can't really negotiate the price. So if you are asking $25K for the car, and indicate that a cashier's check is your preference, I'd bring a check for $22K and $3K in cash. In many cases, I wouldn't have to spend all of that cash.

charis

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Re: How to Safely Exchange $25,000 for a Private Car Sale?
« Reply #15 on: December 29, 2019, 07:32:35 PM »
I bought an RV for the same amount using a certified cheque made out to the seller.  The funds were withdrawn immediately from my account and the seller was free to deposit any time he wished.  Since the funds are removed right away and I had to sign the cheque, I could not have put a stop payment on it.  Talk to your bank for advice.

That's what I did for a private car sale. Maybe the seller was naive but I offered a certified check to pay and it was no problem. We didn't meet at a bank. By the time the sale occurred, he had taken his car to my mechanic and we'd been to each other's homes - for the test drive and the delivery.

cchrissyy

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Re: How to Safely Exchange $25,000 for a Private Car Sale?
« Reply #16 on: December 29, 2019, 07:44:09 PM »
it sounds like you are overly concerned with a very rare type of scam - the one where the seller and vehicle are honest but the buyer gives a check that looked good at the tie but they quickly lie to the bank to stop it.

honestly if I think of car sales scams, I'd worry most about getting a bad car as a buyer.

then I'd worry about getting counterfeit bills as a seller. That one is easy to fix at least by meeting at your bank so they check the bills for you. 

But in the scam you're worrying about, you have a signed check with bank-verified funds, you have met the buyer, maybe you have a photo of their ID and signature on the title paperwork before you handed it over. They have the car. That sounds like lots of evidence on your side. And most people are honest and worrying more about if YOU can be trusted with what you represent the vehicle to be. I would worry about this a lot less than you are.  But I admit, I've only been the buyer in a private party situation. When I needed to sell, I went to Carmax.

MilesTeg

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Re: How to Safely Exchange $25,000 for a Private Car Sale?
« Reply #17 on: December 30, 2019, 10:07:30 AM »
If you do the cash option, make sure you don't do anything to get involved with law enforcement while carrying it. If you do, and they find out about your cash it might get confiscated under civil forfiture laws.

Also make sure you keep a copy of the bill of sale, preferably notarized so when you dump 25k into your bank account uncle sam doesn't come knocking. Whatever you do, don't 'structure' you deposits, hah (that means depositing in chunks).

The war on drugs has made people go crazy. IMHO you have more to worry from uncle sam than taking a cashier check in person at your bank.