Receiving Payment for Your Car

Once you've found your buyer and have agreed on a price, there a number of things you should do to protect yourself against theft and fraud.

Deposits

Firstly, ask for a non-refundable deposit, which will ensure that you're not out of pocket if the buyer pulls out and you have to re-advertise. At this point, it's also worth asking the buyer to provide some ID with an address and landline telephone number, along with a passport or driving licence. In this way, if anything does go wrong, you'll be able to contact them easily.

Payment Methods

Never hand the car keys over to the buyer until you have been paid the full agreed price. However, there are increasing numbers of fraudsters paying for cars with forged cash, fake cheques or counterfeit bankers drafts, and so you must ensure that the payment is genuine, otherwise you will find yourself seriously out of pocket.

The following forms of payment have varying levels of risks; it's important to be vigilant, and never hand the over car until the money has cleared in your account or the cash has been verified.

Electronic Transfer

One of the best ways to receive payment is by BACS or CHAPS. BACS (Banks Automated Clearing System) is an electronic transfer service (usually free of charge) that transfers money from the buyers account straight into the sellers. It takes about 2 business days to clear. In comparison, money transferred by CHAPS (Clearing House Automated Payment System) will be available (cleared) in your account the same working day. However, there is usually a fee to use this service - about £25.

Banker's Cheques

Although a banker's draft or cheque guarantees payment, this only holds true if the cheque is valid. Criminals frequently forge banker's drafts, and so it is essential that you do not release the vehicle until you are sure the payment is genuine. Ask your bank how long it will take before you can draw funds against the cheque, and let the buyer know that you cannot hand the keys over until this date. On the day, confirm with your bank that you can draw funds against the cheque - don't ask if the cheque has cleared as this can mean something different. Alternatively, you could go to the bank with the buyer when they draw the cheque themselves - this way you can tell that it is genuine.

Cash

If you buyer wants to pay cash, ask them to come to the bank with you so that you can pay it in straight away and have the notes checked by a cashier. It's best not to agree to accept cash outside of banking hours.

Personal Cheques

Although they are cheap and easy to use, personal cheques can be issued without available funds in the buyers account, and can also be easily cancelled. In some cases it can take weeks before you are made aware that payment has been returned.

Preparing a Receipt

Prepare two copies of a written sales agreement and receipt, including the following details:

• Make and model
• Registration number and...

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