Paying for the car?

[Guest JasonG]

My experience with car purchases has always been through dealerships with bank financing involved. I signed paperwork, leave with the car, the bank and dealer handle the payment transfer. I am planning to purchase my first antique car and will be paying cash. I'm sure this sounds incredibly naive, but do you show up with $20K in you pocket and hope you don't get robbed? Give a small down payment, leave with the car and the seller trusts you to send the rest? Are personal checks still used for this? I assume that if it is a purchase from a club member or acquaintance, this isn't as much of an issue, but what about out-of-state purchases where the seller is a complete stranger?

Thanks for any advice - Jason

Edited April 20, 2015 by JasonG (see edit history)

[John_S_in_Penna]

You ask a good question, Jason! It's not naive--it's smart and prudent

of you to ask. I'll be interested in seeing other people's ideas.

Doing business in person, I think, is preferable to buying a car

sight-unseen from someone you never met. It's a bit more

gentlemanly, and getting to know the seller helps you assess his

forthrightness--and maybe you'll even keep in touch afterward.

The seller may be interested in knowing that his car has a good home,

and if he's a fellow hobbyist, give you club contacts and leads on parts sources.

I've paid for a car in a variety of ways. One method I used was

to take traveler's checks ($1000 denomination), since they

are as good as cash but can be replaced if lost or stolen.

Around here, though, fewer places currently sell traveler's checks .

I have also used checks.

If the seller gives you the title based on your check, he has to trust

that the check will clear; if you give the check, then the seller waits for it

to clear before sending you the title, you have to trust him.

It might be good to get references from the seller if you're in the latter case.

Being active in the antique-car hobby, I can offer several good and

unimpeachable references as a buyer.

If you wire money instead of sending a check, it's faster, but you still

have to trust that the seller will send the title.

Cash works, but of course you would want to be watchful. I bought a car

with a substantial amount of cash once, but it was only a 2-hour drive away.

City dwellers may not realize that most of our country is honest and safe,

and despite TV crime shows and sensational news reports, criminals are few

and far between. For extra safety, you could do your transaction in a

public place, such as a conference room of a bank.

Regardless, I always use a simple written "Bill of Sale" that both buyer and seller

sign. It lists the car's year, make, model, and serial number, and states

that no warranties, implied or expressed, are included. That protects everyone,

and it serves as a legal contract, more provable than an oral contract.

There are escrow services, I understand, and maybe someone here can tell us

more about them.

Edited April 20, 2015 by John_S_in_Penna (see edit history)

[Guest Bob Call]

Jason

Here's how I would handle the transaction. You didn't say where the car is located but indicate it may be out of state. Are you planning to meet the seller where the car is located? Will you have transport for the car meeting you? I wouldn't take cash nor would I give a personal check. If the car is out of state make sure the seller has all of the title papers you will need to register the car in your state. Check with your local DMV office to determine what is required for an out of state title transfer and registration. Personally, without the proper paper work I wouldn't buy the car.

Ok, if the seller has the proper paper work, you have a transport scheduled to meet you and the seller, I would proceed as follows. Meet with the seller at his bank where the transaction can be closed. You want the seller to provide all of the paper work and a bill of sale identifying the car by description and serial number and signed and notarized by a bank employee. Payment can be made in either of three ways. 1 - You can take a certified or cashier's check from your bank payable to the seller. Exchange the check for the paper work and keys to the car; or, 2 - Have the seller's bank prepare a collection bank draft payable to the seller. You sign the draft and present it to the bank's collection teller, the teller attaches all of the paper work, except the bill of sale, to the draft. The seller gives you the keys. The collection teller will forward the draft and attachments to your bank. When the draft arrives at your bank with the paper work, instruct your bank to honor the draft and pay it with funds from your account. 3 - Arrange for a wire transfer of the funds from your bank to the seller's account at his bank. Tell your bank that you wish to do the wire transfer, sign the required authorization form, and advise them that you will contact them by telephone from the seller's bank to authorize the transfer. Be sure they can make the transfer immediately when you make the authorization. Propose the above payment methods to the seller and let him chose. In the second scenario, if the draft is not honored the paper work is returned to the seller's bank.

After the payment transaction is completed at the bank possession of the car is released to the transport by the seller.

Good luck. When you get the car, post some comments here and post some pictures.

Edited April 20, 2015 by Bob Call (see edit history)

[joe_padavano]

Cashier's check, certified check, paypal (don't laugh), USPS money orders - I've used them all and they all work.

[Restorer32]

Some sellers will demand cash, at least for part of the transaction.

[Guest Bob Call]

One problem with USPS money orders. If they are lost, good luck on getting them replaced by the USPS.

[Guest bkazmer]

Paypal is often unacceptable to a seller - there is a well known scam that takes advantage of Paypal's dispute process and stiffs the seller. EFT (electronic funds transfer) or a bank check/money order are cash equivalents. The comment on buyer's wanting cash may get you involved in some tax issues if the seller is not accurately reporting the gain on a sale.

[factoryben]

It really comes down to trust. I have bought and sold many cars. I have had a buyer wire to my bank account $30,000+ without having any documents at all. A handshake and a promise to pick the car up "in a few weeks". I have concluded ebay transactions where a $500 paypal deposit is made to my account from an out of country buyer and then had $20,000+ wired to my bank account. That buyer picked the car up almost a year later. I do not know what I did or said to earn the trust of these people but I know in the end they were satisfeid with the transfer. I have purchased many cars sight unseen from all over the US. Typically by sending a check as a down payment and then bringing cash to balance when I pick the car up. I am always a little nervous about this but have never had a problem. I try to engage in enough telephone conversations with the seller to get a "feel" for his character. I know this is not fool proof however. We all know the horror stories. I am willing to trust my gut and deal with people I perceive to be honest. I know there is risk to that and I am willing to assume that risk. I have found that paranoid people, while often very safe, muck up many deals by setting up too many barriers. The deal is quickly lost to a trusting person that slaps a cash down payment down. In 40 years of dealing with old cars I have been swindled once. I sent $20 to a guy in the next state over for a set of hubcaps. He cashed my check and disappeared. His phone was disconnected and I never got the caps. I hope he enjoyed my $20 but that is the way the cookie crumbles. I know it could have been worse. As noted about 90% of the people out there are decent. You have to take some risk to play the game. That is my two cents worth.

[Marty Roth]

I generally use a modest deposit check or wire transfer as a deposit to lock in the purchase/option, and then upon acceptance of the car, I use cash, wire transfer, or a combination of the two.

[R Walling]

I wonder if it is possible to wire money to his local bank that will hold it and then disburse it to the seller when the transaction is concluded at the bank?

[Guest JasonG]

Thank you for your replies. The proliferation of car programs where the "star" pays everyone cash from a wad in his pocket had me wondering if that was the norm now. I am looking for a Model A and many are advertised by third parties for the family or estate trustees instead of the owner who may have been well known and trusted by the local clubs. If a small cash deposit followed by a bank check soon after is still acceptable, then that is what I will plan to offer.

I don't think I've ever done a wire transfer, but since my search will be limited to the mid-Atlantic - PNC Bank's area of operation - I suppose that could be an option as well.

Thanks again! - Jason

Edited April 20, 2015 by JasonG (see edit history)

[trimacar]

If you're buying from an estate, make sure that you have the proper paperwork for the title. There has to be a legal trail from the deceased owner to the person who is signing the title over to you, or better yet, they've already had the title transferred to them (that's how the last car I bought was handled). Also, an estate, if being handled above board, should accept a personal check without a big problem.

If you do bring cash to make a deal, it's usually a good idea to have someone with you. There are just too many people out there who think that, if they can take it, it's fair game. I don't really consider this new advice, 30 years ago I went with cash to make an offer on a 1933 Packard 12 coupe roadster, and had my brother come with me as backup! Unfortunately I couldn't do the deal, one of the biggest fish that has ever gotten away from me......

[John_S_in_Penna]

Jason, you can ignore much of what you see on television's

"reality" shows. They're not a true representation of the hobby.

For REALITY, stick with the A.A.C.A. and other sincere and serious clubs!

[Guest bkazmer]

[.

I don't think I've ever done a wire transfer, but since my search will be limited to the mid-Atlantic - PNC Bank's area of operation - I suppose that could be an option as well.

Thanks again! - Jason

Wire transfers can be done between almost any two banks anywhere. The funds are not typically credited until the next day

[avgwarhawk]

Cashier's check, certified check, paypal (don't laugh), USPS money orders - I've used them all and they all work.

^^^^^worked well for me.

[JZRIV]

I concur with Post # 8 from factoryben. Because of variables with every transaction, one method does not work for all. When someone is looking at a car most will focus on the car. I also focus on and evaluate the person's character whether they be a seller or buyer and that will dictate the payment methods, location, etc. I like to use phone conversations vs email just like factoryben because you can tell a lot more about a person using voice communication than email especially through several different calls.

With todays technology in printing, fewer sellers accept a cashiers check since they can be faked. As a seller I personally would not accept one unless I knew the seller or was at the bank when it was handed over by the teller. I sold a car to a very reputable person and accepted a cashiers check. My bank still made me wait 7-10 days to make sure it cleared and I didn't expect that with a cashiers check. I could not imagine doing this with someone I did not know was reputable.

Cash can often still be king and I prefer that most often. One problem with that can be withdrawing your own money in say a $20k amount. Government paperwork has to be completed for anything over 10k and banks don't want to give you cash. When looking for a car, its best to get the cash ahead of time and keep it in a large safe or in the mason jar in the backyard. That way if a deal comes up you don't have to fight the bank and sign papers just to get your own money. I know people who did cash deals that involved up to $50k

There are other reasons some private sellers want cash. They don't want a documented paper trail when they go deposit a large sum of money in the form of a check because you have to complete paperwork for that too.

Edited April 20, 2015 by JZRIV (see edit history)

[60FlatTop]

To make a better informed comment, please provide the city and street address with the expected time of arrival. The type of vehicle you are driving would help, as well.

Bernie

[Rusty_OToole]

It is up to the seller if he will take a check. Many won't and I don't blame them. Even certified checks and cashier's checks are being faked.

My method is to give the seller a deposit of $100 to $500 to seal the bargain. Then go to the nearest bank, draw out the rest of the money, hand it to him in the bank and get a receipt.

This way I am not carrying large sums of money but I can pay the seller in cash, in a safe place, in front of witnesses.

Sometimes I put down a deposit and come back with a trailer and pay for the car later. Sometimes we do the transaction all at once.

This is easy in Canada as there are only 5 banks with branches all over the country and I have accounts in all of them. In the USA you may need to arrange things a little differently but I am sure your local bank manager can tell you what to do.

You will have to use your own judgement depending on the amounts involved, how well you know the seller, etc.

Edited April 20, 2015 by Rusty_OToole (see edit history)

[cahartley]

I witnessed a $17,000 cash deal go down.......no problem.

Of course the buyer knew he was dealing with reputable people.

With banking reporting requirements now days it's hard to even accumulate 20 K green....... :eek:

One issue that hasn't been mentioned is DON'T GIVE A COP ANY REASON TO STOP YOU.

If your car was searched and 20 large was discovered you'd "have some 'splainin' to do Lucy"....... :mad:

That said I've NEVER had ANYONE turn down CASH.......

[1937hd45]

Some sellers will want to check your pile of cash to be sure it was real. Bob

[John_S_in_Penna]

The bank reporting requirement for transactions of $10,000 or over

are to help prevent money laundering by criminals. The paperwork,

in my experience, is done by the BANK, and the customer has no trouble at all.

Since they might not have that much cash on hand, you'd have to arrange

in advance to get large amounts of cash.

But perhaps your bank has different procedures.

Interestingly, the largest denomination of currency in the U. S. is currently

the $100 bill. Until the 1960's, bills of $500, $1000, $5000, and $10000

were in circulation, though of course were not common. At one time--

when the dollar was worth far more--there was even a

$100,000 bill for transactions between Federal Reserve banks!

Edited April 20, 2015 by John_S_in_Penna (see edit history)

[Trulyvintage]

Buying over a distance:

Bank to bank wire transfer berween Buyer & Seller

Seller sends title/paperwork via overnight express mail or equivalent upon receipt of funds

Buying in person:

Cash

Jim

[TexRiv_63]

For a $20,000 transaction wire transfer is the safest and most secure method for both parties. I have bought and sold a number of cars this way. Use this method to send the deposit, have him bring the car to his bank and meet him there. Once you have inspected the car and paperwork, go inside and have the bank do the deal, they will be familiar with this type of transaction. Make sure your bank knows what is happening before you leave and have the phone number of your bank officer that will handle it. Do the same when you sell a car.

[trimacar]

I sold a car at Hershey, fellow wanted to give me a personal check. That just wasn't going to happen, for obvious reasons. OK, he said, I'll go to my local bank and get a cashiers check. That's fine, I told him, but I want to be IN THE BANK and with you when they issue the check. That way there's no problem with it.

Another car I sold at Hershey, fellow wired me the money by making a phone call, as we stood on the field. I called my bank, they verified the transfer, all took about 30 minutes and was done.

I've also done cash purchases, and like above, seen a briefcase full of 100's at Hershey. I would love to know how many millions are walking around at Hershey every year. One year I was flush, and walked around for 3 days with 20K in my pocket, looking for a car, and never found what I wanted.

So, lots of ways to skin a catfish....

[R Walling]

... One year I was flush, and walked around for 3 days with 20K in my pocket, looking for a car, and never found what I wanted.

I did the same thing, it does take up a lot of space in your pocket and you are well aware that it is there!

(Ps, the back pocket is out of the question.)

[JV Puleo]

Many years ago, in the late 70s when I was in my 20s, my boss at the time asked me to look at a RR Silver Ghost with him. He knew almost nothing about them so I was along to tell him what we were looking at. At the time, I was the assistant used-car mechanic at his Volvo / Saab dealership. We were going to look at the car on a Saturday morning and on Friday, as I said good night and walked out the door, he tossed me an envelope. "Bring that with you" he said. "What is it" I asked. "$25,000" he replied. I felt very self-conscious driving home with that envelope, especially as I was driving a '51 Plymouth Cranbrook that had a dicey ignition and would occasionally just shut off.

He bought the car. It was largely dismantled and the next week the man I worked with and I went back and picked it up... the chassis and body on different trailers and about 20 additional boxes of miscellaneous parts. I spent the next 6 months reassembling it.

Edited April 21, 2015 by JV Puleo (see edit history)

[60FlatTop]

In 1974 my Dad and I were standing in the line in front of the Atlantic City Convention Center to attend the car swap meet and auction. He asked if I had my wallet. It was in my back pocket. He showed me his in his front pocket. He said a hand could slip into his back pocket without him knowing. In his front pocket, he'd know FOR SURE.

Counting out hundred dollar bills on the hood of a car us one of life's little pleasures. Scooping it all up and folding it over once and sticking it in your pocket is just a guy thing.

And, in general, a few hundred bucks in your pocket makes you smarter. I learned that on a trip to the Inland area of southern California a couple of decades ago. I was there alone for a few days and carrying a pretty good chunk of change in my front pocket. At night I drove past quite a few places I might normally have stopped, but the thought of the money showing while buying a beer made me just go to a nice restaurant and behave myself.

Reflecting on my own actions, I thought about people killed in robberies where only a few dollars were taken. Maybe, if they had been carrying more money they would have been more cautious. not walked down that alley or used that parking garage. I decided to maintain a policy of carrying enough cash to be smarter. It doesn't deter thieves, for sure, but it keeps me away from obvious places they lurk.

The drawback to carrying cash is when you are standing in front of a jerk boss with a few grand in your pocket. Well, maybe not.

Bernie

[Restorer32]

An acquaintance of mine, whose name many of you would recognize, was in charge of $40k or so partially in check and partially in cash to be used to purchase a car for a customer. Come Sunday morning my friend, not wanting to leave the cash in his house while he attended church, tucked it safely into an inside pocket of his suit coat and of course, it being a warm day, he left the jacket in the pew when he and the mrs left church. Happily the pastor saw what happened and returned his coat, money intact.

[Matt Harwood]

Years ago when I was building high-performance Corvettes, we had two guys come in from South Africa and each of them bought a brand new 1998 Corvette with every upgrade we could throw at them--more than $130,000 each. They paid in CASH. So there we are, all sitting around the conference table with two swarthy-looking guys with accents, counting stacks of bills. Someone looking in the window would have been very curious about what was going on.

At any rate, one of them over-paid by like $15,000. Since they were flying out the next day, I was elected to go to their hotel room and return the cash, which I did. As I'm getting out of my car and walking across the parking lot, I am clobbered from behind hard enough to knock me to the ground. I jump up ready to fight and there's nobody there, but at my feet there's an unburst water balloon. It's obvious what happened. Holy crap that was a hard hit! My first thought was that I was being mugged and that I'd lose the scary foreign guy's wad of cash. Didn't happen, and since then I've been very wary of carrying a big pile of cash with me. In fact, it's quite rare for me to carry more than $20-30 in my wallet. With debit cards, who needs cash?

Back on subject, wire transfers are how we conduct 90% of our business, but there's always an element of trust on the part of the guy sending the money. Once it's gone, it's gone, but at least you have an official record of it should you need to pursue remedies. Cash is problematic in this business because I can't use it to pay payroll or the rent, and depositing more than $10,000 triggers all kinds of unpleasant attention from the authorities. For a private sale, a wire is still pretty safe, particularly if you bank at the same bank as the seller. Most banks won't let you do a wire by phone, you have to in person, but you may be able to set it up in advance so that they have it ready to go on a phone call, it depends on the bank. The wires go through within an hour or two in most cases. I like it better than cash and no car leaves on a check, even a certified check (I've got a nice stack of pretty convincing fakes on my desk).

A little trust is required. The good news is that despite the news reports, most folks are honest.

[Marty Roth]

Pre-arrange with your own bank to assure that you have"All of your Ducks in a Row" - in other words, know what your bank requires to do a wire transfer - Generally:

Recipient's Name,

His Bank's Full Name, the Branch's Street Address & Phone Number,

His Account & Routing Numbers

Some banks have additional requirements - so check it out beforehand, and don't be shy about asking the seller to check with his bank to see what requirements they might have.

Also note that while some banks wire funds when you ask, others only do it once or twice each day, and some actually have to go to another institution to execute a transfer.

That way, when everything about the car as well as the deal are satisfactory, you can do the transfer right then and there.

[Marty Roth]

[.

I don't think I've ever done a wire transfer, but since my search will be limited to the mid-Atlantic - PNC Bank's area of operation - I suppose that could be an option as well.

Thanks again! - Jason

Wire transfers can be done between almost any two banks anywhere. The funds are not typically credited until the next day

If done prior to both bank's closing time, and while the FED is open, the funds can generally be available immediately.

[Marty Roth]

I witnessed a $17,000 cash deal go down.......no problem.

Of course the buyer knew he was dealing with reputable people.

With banking reporting requirements now days it's hard to even accumulate 20 K green....... :eek:

One issue that hasn't been mentioned is DON'T GIVE A COP ANY REASON TO STOP YOU.

If your car was searched and 20 large was discovered you'd "have some 'splainin' to do Lucy"....... :mad:

That said I've NEVER had ANYONE turn down CASH.......

Actually, I have had somebody turn down cash!

The seller reminded me that the Feds receive a report from your bank that you have withdrawn, or deposited a transaction of $10,000 or more, and this can trigger an investigation per that transaction , as well as by the IRS at tax-time. Ask me how I know!

Some years ago when I was looking to buy a very specific type of car, if one came up, or would be at auction, I would go to my bank , typically on a Wednesday or Thursday and take a large previously arranged cash advance, typically anywhere from $25,000 to $150,000 on my credit card (only minimum fees of $5 plus minimum interest were required back then). I would then travel to the seller or the auction, and after not buying the car, I would immediately pay off the credit card advance by phone , calling the credit card company to transfer the amount from my bank account so that interest would not pile up. As soon as I was back in town, usually the next Monday or Tuesday, I would deposit all of the cash back into my accounts. I thought it was a relatively inexpensive way to have available cash with me for a short period of time, and only pay 5 or 6 days interest at 5%/year, since $100,000 at 5% for 6 days is only around $10 plus $5 for the transaction Fee.

The nasty surprise was that I was audited by the IRS, scrutinized, mesmerized, Bluto-ized, minimized, pulverized, and my accountant and I spent days answering the most inane questions, and providing documentation on minute details of personal, medical, and business transactions, all of which were entirely appropriate and legitimate - actually I was entitled to more deductions than claimed. Eventually over coffee, my accountant asked the IRS representative what they were really looking for. It turns out that the multiple cash withdrawals and deposits of $10,000 or more triggered the red flags, and they now suspected that I was a Drug Dealer. It took some pretty fancy "Splainin' " and the details of my car collection, but the IRS finally agreed that there was no impropriety.

Now I do not make cash transactions of $10,000 or more.

Wire transfers are the safest.

I have had other sellers refuse large cash payments for the same reason.

[Restorer32]

Banking sure has changed. In '78 or so I found a Packard I wanted to buy. I went to our local bank to ask about a loan. Pres of the local bank asked me how much. I told him I wasn't sure but told him a max I was willing to pay which he said was no problem. The banker then told me to go buy the car and write a personal check for it. He instructed me to tell the seller to call the bank and they would tell him the check was good ( it wasn't, at that age I hardly had 2 pennies to rub together). I was then to stop in the bank the next Monday and we would complete the paperwork. Imagine a bank doing that now.

[trimacar]

Well, if Marty didn't tell his story, I was going to tell it about an anonymous person, it's not funny, but educational, and if you're ever audited you now know to ask "anything in particular you're looking for?"

I had a deal fall through on a very desirable early car, because the fellow wanted cash. I was going in halves with another guy to buy the car, and the other guy demanded we pay by check to have a record of the transaction. He wouldn't budge, nor would the seller, and a 1910 Pierce Arrow got away.

I've since learned that there's a way around that. Make a personal check out to the guy for the amount of the car, signed and all. Pay him with cash. Write across the check "seller xxxx of yyyy automobile would not take check so paid him cash." That way, you have a record of the transaction that the IRS will accept, and he's the one in hot water if it's followed up......

[John_S_in_Penna]

Restorer32, LOCAL banks in small towns are very helpful,

and are likely to go out of their way to help customers, even today.

The trouble is, there are many big banks with less personalized service.

Why haven't more people tried traveler's checks?

As good as cash, they would eliminate the need

for carrying large sums of money around.

[Guest bkazmer]

Why haven't more people tried traveler's checks?

As good as cash, they would eliminate the need

for carrying large sums of money around.

Because Travelers' Checks have become close to extinct. World wide credit cards and the Euro have made them pretty superfluous

[Matt Harwood]

I bet a lot of people are skittish about travelers' checks, mostly because they've never seen or used them. I don't think I would accept them, to be honest. Are they easy to forge like certified bank checks are? Too many questions that I'm sure are borne of inexperience, but that's surely why they've fallen out of favor.

[John_S_in_Penna]

American Express Travelers' checks have all sorts of

safety features, much as U. S. currency does. They

even have holograms now. I imagine the seller could

call American Express to verify the checks' authenticity.

I bought a car with $1000 travelers' checks which I got from

the A.A.A., though now my local A.A.A. doesn't carry them

and I have to get them from my bank.

Travelers' checks are more common, of course, in the

hospitality industry (hotels and restaurants). I think they

are used less often now because people charge everything.

I'd never walk around a show with a lot of cash---and how

would a person do a wire transfer at Hershey on a

Saturday afternoon when all the banks are closed?

[ScarredKnightfan]

Why haven't more people tried traveler's checks?

For 1 of the cars I bought out of state, the seller INSISTED on traveler's checks. At that time, my bank still offered them free of charge, so that was fine & dandy with me. Got the traveler's checks before I left town ... went to Ohio to buy the car, gave him the checks, we went to a local DMV for me to get a temporary sticker for the car ... & I drove it home. It was a very easy & overall pleasant transaction.

I've also paid cash, tho carrying even that $3,000 on my person was a bit nerve-wracking ... luckily, that car was here in the Chicago IL area, not far from home.

Mostly, I've used cashier's checks.

Cort www.oldcarsstronghearts.com

1979 & 1989 Caprice Classics | pigValve, paceMaker, cowValve

"We never stop to think what we consume" __ Bellamy Brothers __ 'Kids Of The Baby Boom'

[Guest JasonG]

Great stories and advice. Glad to know there are more options than bulging pockets of cash. I would have never even thought of Traveler's Checks. I will certainly keep the wire transfer and traveler's checks in mind and make sure I have my "ducks in a row" at my bank before setting out. Thank you!

Jason