When buying a used car, you could consider paying in cash, but it’s highly likely the vendor will be suspicious of the notes and will want to meet at a bank to have the notes checked. And, that’s to say nothing of how dangerous it is to wander around with a large sum of money on you.
You could use a cheque, but as these take time to clear, they bring their own problems, not least because the seller will want the funds to clear before they release the car. An alternative is to use the CHAPS (Clearing House Automated Payment System), which makes same-day payments, but there will be a charge for this. Typically, it’s used for large sums of money (often when people are buying houses), but it can be used when buying a car.
You could also use the Faster Payment Service, which several banks have signed up to. It operates in a similar way to CHAPS, guaranteeing payments more quickly than the normal cheque-clearing system allows. However, some banks impose a limit on the amount of money you can transfer this way.
You could also consider using a Banker’s Draft, which is guaranteed by a bank. Again, however, the seller may be suspicious because these drafts can be faked, so it’s perhaps preferable to meet the seller at a bank, where the funds or a draft can be drawn. Similarly, because a banker’s draft doesn’t clear immediately, it’s quite possible the seller may want to wait for the funds to clear before they release the car.
Before you make any decision on how to pay, the best move is to discuss with the car seller how they would prefer to be paid.
You could use a cheque, but as these take time to clear, they bring their own problems, not least because the seller will want the funds to clear before they release the car. An alternative is to use the CHAPS (Clearing House Automated Payment System), which makes same-day payments, but there will be a charge for this. Typically, it’s used for large sums of money (often when people are buying houses), but it can be used when buying a car.
You could also use the Faster Payment Service, which several banks have signed up to. It operates in a similar way to CHAPS, guaranteeing payments more quickly than the normal cheque-clearing system allows. However, some banks impose a limit on the amount of money you can transfer this way.
You could also consider using a Banker’s Draft, which is guaranteed by a bank. Again, however, the seller may be suspicious because these drafts can be faked, so it’s perhaps preferable to meet the seller at a bank, where the funds or a draft can be drawn. Similarly, because a banker’s draft doesn’t clear immediately, it’s quite possible the seller may want to wait for the funds to clear before they release the car.
Before you make any decision on how to pay, the best move is to discuss with the car seller how they would prefer to be paid.
