Selling 3 series - avoiding payment scams

I've read numerous internet articles on this, but I still don't understand a couple of things, maybe someone can help?

Multiple articles give the following advice:

"go to buy's bank/credit union together so that he/she can see the cashiers check being produced"

My questions are

1) What if there is no local branch in my area? (guy is coming from out of town)
2) What if he's financing, and he is bringing a bank draft, not paying cash out of his account?
3) Regarding #2, there are ways to verify over the phone? But can't he stop payment on any draft immediately after driving off?

Thanks!

Manish

This can be hard ..... the buyer needs to bring acceptable currency to you .... out of town there are many big chain banks he needs to bring a cashiers check on B of A or JPMChase for example that you take to one of their local branches to verify.

If he is financing arrange to have funds wired to your bank ... don't sign over your title til the funds are verified in your account.

I've done cash up to about $15,000 or so.

If it smells fishy avoid.

I have no idea, but if you don't mind me asking. How much more are you making over carmax? If it was less than 5k I'd probably just sell it to them and know I won't have an issue.

Laser - would anyone feel comfortable just wiring a large amt of money to a stranger's bank? I can't see how anyone would do this

super terp - it's about 5K more than Car max. That is a significant amount. You would forgo the 5K simply to avoid the headache? I'm asking - I don't know. This is the 1st car I've sold, so to me 5K seemed worth it. Even 2K seems worth it, IMO, but I could be wrong, I've never been thru the process before. Comments / advice is appreciated.

Originally Posted by manish500

"go to buy's bank/credit union together so that he/she can see the cashiers check being produced"

I've sold numerous cars privately over the years (actually, the only way I've ever sold my cars), occasionally to out-of-state buyers. I simply call the buyer's bank to confirm the authenticity of the form of payment.

Never let a buyer put you in a position (trying to provide payment outside of banking hours, etc.) where you cannot independently confirm the form of payment with the bank.

Originally Posted by manish500

1) What if there is no local branch in my area? (guy is coming from out of town)
2) What if he's financing, and he is bringing a bank draft, not paying cash out of his account?
3) Regarding #2, there are ways to verify over the phone? But can't he stop payment on any draft immediately after driving off?

I sold one car to an out of towner via Craigslist. The car sold for less than 10k, so we just used cash. He flew in, I picked him up, he inspected the car, we then drove to his bank and he got the cash out.

What made it work was that we were both able to check each other out ahead of time. He was actually employed by the national organization of my old college fraternity. He was mentioned in many places on the national website. And he was able to go through old house records and find that I was who I said I was.

The moral is, find out what you can about the person. It may smooth the deal, or it may warn you off.

As for your banking questions, I suggest you talk to your bank manager. He can tell you what is the best way to handle this transaction.

Frederic

Looks like a business opportunity for a middle man. I don't know if your bank provides that service (handing over title after fund is cleared), and charge $300 for it?

Originally Posted by laser

This can be hard ..... the buyer needs to bring acceptable currency to you .... out of town there are many big chain banks he needs to bring a cashiers check on B of A or JPMChase for example that you take to one of their local branches to verify.

If he is financing arrange to have funds wired to your bank ... don't sign over your title til the funds are verified in your account.

I've done cash up to about $15,000 or so.

If it smells fishy avoid.

+1: Ask for a cashiers check.

cashier's checks can be cancelled / claimed as lost.

Originally Posted by manish500

cashier's checks can be cancelled / claimed as lost.

Cash can be counterfeited.

The pitfalls are many ...... Cashiers Check drawn on a bank that has a local branch where you can both go and negotiate the check is probably the most realistic. Bogus cashiers checks are prevalent so like said above .... only during banking hours and take the check to a branch of the bank where it is drawn.

Selling the car to a private party is worth it .... trading is next best to minimizes sales tax on the new purchase .... CarMax is legit and easy but it will almost always be the lowest offer by a fair margin.

ps ...... don't tell anybody but I'm a banker.

Originally Posted by manish500

cashier's checks can be cancelled / claimed as lost.

Payment on a cashier's check CANNOT be stopped. The issuing bank CANNOT deny payment on a properly endorsed cashier's check. If the buyer of a cashier's check claims that it was lost the issuing bank requires them to buy a surety bond to cover the amount of the check before they will issue any refund. That is because if the check is presented for payment at a later date and is properly endorsed they MUST pay it. For this reason the surety bond is not cheap.

Originally Posted by Verts4Ever

I've sold numerous cars privately over the years (actually, the only way I've ever sold my cars), occasionally to out-of-state buyers. I simply call the buyer's bank to confirm the authenticity of the form of payment.

Never let a buyer put you in a position (trying to provide payment outside of banking hours, etc.) where you cannot independently confirm the form of payment with the bank.

That's good advice. Send an image to the bank you call with written request for validation; ask for written confirmation.

No problem at all.

Originally Posted by tturedraider

payment on a cashier's check cannot be stopped. The issuing bank cannot deny payment on a properly endorsed cashier's check. If the buyer of a cashier's check claims that it was lost the issuing bank requires them to buy a surety bond to cover the amount of the check before they will issue any refund. That is because if the check is presented for payment at a later date and is properly endorsed they must pay it. For this reason the surety bond is not cheap.

+1

Originally Posted by laser

.... trading is next best to minimizes sales tax on the new purchase .... CarMax is legit and easy but it will almost always be the lowest offer by a fair margin.

...Unless you live in California or possibly in another state that doesn't allow the reduction in sales tax.

+1 CarMax offers a decent deal for anyone who doesn't want to deal with the hassle involved with selling used cars.

FYI to people who are new to selling cars: Another option to selling your car is to consign your car to a dealership specializing in consignment sales. You set the price, and let the dealership do all of the work for a fee. Unfortunately, I haven't had the experience of going through this route so I can't say I recommend or not recommend this option.

Originally Posted by manish500

Laser - would anyone feel comfortable just wiring a large amt of money to a stranger's bank? I can't see how anyone would do this

super terp - it's about 5K more than Car max. That is a significant amount. You would forgo the 5K simply to avoid the headache? I'm asking - I don't know. This is the 1st car I've sold, so to me 5K seemed worth it. Even 2K seems worth it, IMO, but I could be wrong, I've never been thru the process before. Comments / advice is appreciated.

Everyones situation is different in money, 5k can be a LOT or a little, and for me the headache wouldn't be worth the 5k but since you said its right at 5k I still might try and sell it. I'd just make sure I was comfortable with the buyer and even then you can read people wrong.

This is kind of a tough one. I have a story to tell that might be of use.

I got a $30K cashier's check from my credit union, and went down to Sacramento to buy a car.

Decided the car was as advertised, the owner and I went down to his bank to transact the deal. Big Bank Bahstahrds said: "oh, yes, the check is good but it will take 2-5 days to process and get the money in (sellers) account". Big problem, as the seller is now not convinced it's a valid check (and who could blame him - he didn't know me.)

So, we tried an alternate: he's also a member of a credit union; we went there. Short story: same story. HOWEVER, since both the buyers' and my credit unions are members of the same CU organization: 1) while on phone, 2) the buyers' CU deposited the check into MY CU's account, 3) teller on phone confirmed it, 4) my CU did a phone transfer to seller's CU. Done (but what a b^&*%).

Moral: it's good to have accounts in multiple banks.

I'm a Gm of a car dealership so I have first hand experience of how to deal with this. Demand that the vehicle be paid for by bank wire or cash. When I sold my personal car I went to my bank and opened a second account just to receive the bank wire so I would not have to give out my personal account info. Once the money is in your account only you can control it a cashiers check maybe good at the time you receive it, but believe it or not you can have stop payment put on a cashiers check. Even if they are financing they can have their bank or credit union do a bank wire with the proper documents from the DMV proving the car is lein free (I have done it many times myself when I buy cars. If they try to use the excuse they want to see the car before they pay you all they have to do is 1) let there bank know what's going on and that they will be going out of town to potentially buy a car that they would like the bank to wire payment on upon request 2) schedule to come look at the car as early as possible on a weekday 3) if the car check outs and they wish to purchase they can call there bank and have the wire sent. If the wire is sent before 2 pm you can get it the same day they might have to wait a few hours while the wire clears the federal reserve but what is 2 hrs.

Originally Posted by manish500

I've read numerous internet articles on this, but I still don't understand a couple of things, maybe someone can help?

Multiple articles give the following advice:

"go to buy's bank/credit union together so that he/she can see the cashiers check being produced"

My questions are

1) What if there is no local branch in my area? (guy is coming from out of town)
2) What if he's financing, and he is bringing a bank draft, not paying cash out of his account?
3) Regarding #2, there are ways to verify over the phone? But can't he stop payment on any draft immediately after driving off?

Thanks!

Manish

When I sold my Mercedes S320 some years ago, I quite frankly rejected out-of-town buying offers, or buyers that didn't have a bank branch in the L.A. area. Although it took a little longer to sell the car (over $30K). I ultimately ended up going to my buyer's (local) bank (with her) and witnessed the cashier's check being cut.

She really wanted the car and I only made a small price concession. Oddly, I found out later that she never registered the car...two years after the sale. It was parked in front of her house. Go figure!

if your car is has a lien on it then give the bank the responsibility to handle the payment from the guy and have them give you a check for the difference.


You can ask you Bank manager if you do not owe anything to help with the bank to bank transaction.