No one wants to take a briefcase full of cash to buy a car. Many third-party payment options, like Venmo and PayPal, seem like attractive options to transfer money. Unfortunately, there are serious risks when you try to buy a car with PayPal or Venmo.
Find out why it might not be a great idea to transfer thousands of dollars for a used car with these payment services. See why you shouldn’t buy a car with Venmo or PayPal and why you should consider another secure payment option.
Buy a Car With Venmo
Venmo is a convenient app that you can link to your bank account, credit card, or debit card and Venmo account. This popular peer-to-peer transfer service offers a number of transfer options, some free transfer options, and a platform with a growing number of users.
There are, however, a number of drawbacks to choosing this payment app. Find out why this app is best used for transferring money to friends and family, not a stranger selling a used car.
Venmo Transfer Limit
Don’t expect to fully purchase a vehicle with a single Venmo transaction. The app has a transfer limit of $6,999.99 per week, or only $299.99 if you haven’t verified your identity.
Since the average cost of a used car is approximately $23,000, your payment will need to be separated by multiple weeks. Most sellers won’t be willing to wait three or more weeks to receive full payment.
No Fraud Protection
After sending a payment, a prospective buyer can reverse the payment. This feature allows Venmo users to recover money in case an account was hacked, but it means that sellers may not be able to trust a Venmo transfer, even after it’s been finalized. Transferring money and then recalling it is a common car buying scam, so both parties should consider another payment option.
Scammers don’t have to cancel a payment before you receive it. Even if a buyer receives and spends a payment, Venmo may still require them to pay it back if the buyer refutes the transfer. This may cause many buyers to not want to accept your Venmo payment for a vehicle.
Fees for Credit Card Transfers
Venmo charges a 3% transfer total fee when sending money with a credit card, which can be a considerable amount in a car sale. It also charges a fee to instantly transfer funds to a bank account, so a seller will need to wait up to three business days to receive the funds without paying an extra charge. A few percentage points of a small sale is a small inconvenience, but 3% of a $20,000 car is a significant fee.
Buy a Car With PayPal
PayPal has over 390 million active accounts and is widely regarded as the most popular online payment service. This popular payment service comes with a lot of fraud protection for most personal and business transactions.
This includes 24/7 monitoring, dispute resolution, and fraud prevention if there’s a fraudulent charge on your account. If you’re transferring funds as a private individual, you don’t have to pay any transfer fees, which makes it a more affordable option than many other money transfer services.
Motorized Vehicle Exclusion
Unfortunately, this coverage doesn’t extend to any motorized vehicle sales. If you try to buy a car with PayPal, you won’t enjoy any of that fraud coverage. PayPal specifically excludes used cars and other motorized vehicles.
You can still technically pay for a car this way, but you aren’t protected from fraud in the event that you don’t receive the title or the seller isn’t actually the owner of the vehicle. This may be acceptable if you’re purchasing a car from a relative or friend but is a dangerous option when working with an unknown seller.
PayPal Transfer Limit
Similar to Venmo, there’s a limit to the amount you can transfer through this payment service. PayPal has a limit of $10,000 per transaction, up to a total of $60,000 if you lift the limits. This maximum is much more likely to cover any used car sale, but it isn’t protected against fraud like other PayPal transfers.
Common Target for Scams
The popularity of this payment transfer service has made it a common target of phishing and scams. You’ll need to be on the lookout for hacked accounts, spam emails, and other attempts to access your account.
Most of these scams are obvious and poorly planned, but still frustrating. Emails, phone calls, and text messages asking you to confirm your account should be treated as scams. Only enter your account information into the verified PayPal website, not through email, by phone, or on another website you don’t recognize.
Buy a Car With PrivateAuto
Choose a payment service designed for private party used car sales. While Venmo is great for transfers to people you know and PayPal can be used in a number of business transactions, the PrivateAuto payment system is a secure option for used vehicles. Find out more about this platform before searching local listings.
Transfer funds instantly once the car and title have been handed over. The PrivateAuto platform offers instant, secure transfer of payments from one bank account to another. You don’t have to worry about refund requests, transferring piles of cash, or dealing with payment service fraud.
Sellers are much more willing to negotiate when they’re confident of available funds. PrivateAuto Pay allows you to send and receive payments in a verified way. You don’t need to convince a seller you’re good for the money or flash your cash to prove a point.
Verified VIN and Identities
Are you sure you’re buying a car from the legal owner? There are unfortunate scams that can occur for both buyers and sellers without verified identities. The PrivateAuto platform is a secure way to verify the VIN, buyer and seller driver’s license, and other documents.
Both parties can breathe easy knowing the right documents to sell a car are clean, available, and ready to be signed electronically.
Transfer Money and a Title Safely With PrivateAuto
Venmo and PayPal are competitive services to transfer funds for many reasons, but you need another platform for used vehicle sales. Don’t buy a car with PayPal, but turn to a platform customized for used car sales.
Check out the latest used cars for sale in your area with PrivateAuto. See how PrivateAuto pricing helps buyers and sellers safely connect and transfer funds. Avoid scams and close on a highly rated used vehicle in your area with stress-free funds transfers.