How to pay for a used car

Right, so you've found your perfect car, negotiated the best price and had it checked over. But, you haven't finished yet as the final thing you have to do is pay for it. Even used cars can be expensive with the average used car now priced at over £5000. There are numerous ways to finance the purchase of a quality used car, so you need to be mindful of which option is best for you. Here is a break down of your options when paying for a used car:

Paying in cash

This is the most popular form of payment for private sales; while car supermarkets and dealerships won't be adverse to this payment method either. Obviously, this can be inherently risky for bother seller and buyer. Buyers will be wary of being given false notes and may ask for the deal to be done at a bank, so they can verify the legality of the notes handed over. On the other hand, sellers should only hand over the cash at the same time as being given full access to the vehicle and all of the documentation.

Paying by cash can make a deal more attractive as there is no rigmarole with securing finance against payment. Always be sure to meet the seller in a public place to protect yourself and your investment.

Electronic bank transfer

This is a very secure way of purchasing a used car. This involves you transferring the agreed funds from your account directly into the sellers' account. Beware, that this may not be instant, so a seller may refuse to hand over the keys to the car until the money appears in their account. Also, your bank may charge you to minimal fee to do this for you, so remember to check this with them. Paying by cheque

A seller may take a personal cheque from you but you will have to wait for your vehicle until it clears and the funds are in the sellers' account. On the plus side there will be a paper link between you and the seller. This though is probably an outdated way to pay for a used car as cheques are becoming less accepted in todays' money transfers.

Credit card

This is a good way to pay a deposit for a used car as you can always get the money back from the credit company if something goes wrong. Due to the high interest rates involved, it is an unadvisable way to pay large amounts if you can not pay it off quickly.

Banker's draft

To avoid paying by cash you can pay the bank the money you have raised and they will raise a cheque to pay the seller. Again, a bank may charge you for this method of payment.

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