Selling A Car - Payment, paperwork and avoiding scams
A car buyer has responded to your advert and wants to buy it. Great news, but what happens next?
First of all you have to make sure your buyer is genuine. If you use a website to advertise your car, you may receive an email from a foreign buyer agreeing to pay the full advertised price, asking you to contact a shipping agent on their behalf, and offering to send you a cheque.
These 'buyers' are almost always scammers. Don't reply to them, but do advise the website administrator.
Fake cheques became a big problem for banks after 2007, when they lost the right to any comeback. It can take six business days for funds to clear, so check your account before releasing the car.
CHAPS/BACS electronic payments or direct money transfers are quick and safe. You can see the money is 'real' as soon as it's in your account.
Escrow is a method of holding a payment in trust until the car has been delivered. It's not a bad system, but you need to be sure that you're really dealing with a legitimate escrow company and that the person collecting the money is who they say they are.
Once a price has been agreed, take a non-refundable deposit of whatever amount gives you confidence that the buyer won't pull out, or that will at least cover some of your costs if they do. Around £100 is normal.
Never hand over the car or any paperwork until you have been paid the full agreed price. Be wary of anyone who wants to pay for an expensive car (over £10k) in cash. They may be trying to launder money.
Counterfeiting is a problem in the UK. If the buyer continues to insist on cash, see how they react to your suggestion that they can only take the car once their cash is safely in your bank.
Sadly, banker's drafts are no longer 'as good as cash'. They can be forged, and if they are, banks will reject them. Safeguard yourself by waiting six business days for the funds to clear. Under banking rules introduced in 2007, you're guaranteed that the bank will pay the funds, even if the buyer's cheque later turns out to be fraudulent.
Once the deposit has been taken and the deal done, prepare two copies of a written sales agreement including the following:
Make and model
Registration number and VIN
Year of registration
Mileage (if you know it to be genuine; if you don't, state 'mileage not verified')
Agreed sale price and the deposit paid
Buyer's name and address
Your name and address
A note that the vehicle is 'sold as seen'.
Make sure you both sign and date each copy.
We've prepared one that you can print out and use.
Used car sales receipt
Before you say goodbye to your car, make sure you fill in all transfer documents. Tell the DVLA of the sale by filling in and sending off the form on the vehicle's V5C registration document.
If your car is listed with a security register, you've got to inform them of the sale. If you can't find the forms you need, call the register's number: it should be etched on the car's windows.
Inform any warranty company, manufacturer or independent, of the new owner's details.