Can I Pay for a Used Car With a Check?

Paying for a car by check has some advantages over paying with cash. Such as not lugging $45K in bills to a Walmart parking lot and feeling a bit too much like a drug dealer.
Checks have their problems as well. They’re super inconvenient, for one. Also slow. Fortunately, there’s a better way.

PrivateAuto Pay allows you to pay instantly, any time of day, any day of the year. It works via a fee-free fund transfer. Sort of like Venmo—for transactions up to $1M.

Can I Pay With a Check for a Used Car?

Almost nobody will accept a personal check as payment for their car. Unless they hold the car and wait for your check to clear, in which case you’ll be forced to trust them—and wait to take possession of the car.

Cashier’s checks are thought to be a safer guarantee for the seller, but even they aren’t bulletproof. Cashier’s check scams have gained notoriety, leaving a lot of car sellers to distrust this payment method.

Unless you and the seller go to your bank—during hours when it’s open, of course—and get the bank to verify the check’s legitimacy, a cashier’s check won’t do the trick.

Image highlighting Buying/Selling Car Privately by PrivateAuto

What are the Advantages of Check Payments?

Cashier's checks have been a popular way to pay for a private-sale vehicle, and they do have a few advantages over other payment types.

1. Guaranteed funds: cashier's checks provide guaranteed money once verified, giving sellers confidence.
2. Security features: cashier’s checks contain anti-fraud measures like watermarks and security inks. These help prevent counterfeits, even if skilled scammers still find ways to fake them.
3. Financial record: checks create a paper trail documenting the transaction, unlike cash. This offers protection if issues arise.
4. Familiarity and convenience: both buyers and sellers are accustomed to cashier's checks as a known, convenient payment option.

What are the Disadvantages of Check Payments?

While cashier's checks are more secure than personal checks, they’re stuck in the stone age compared to PrivateAuto Pay:

1. Delayed payments: checks take time to fully clear banks, so sellers must wait for payment. This creates friction and delays in getting the deal done quickly.
2. Susceptibility to fraud: the potential of cashier's check scams has sellers on edge.
3. Inconvenience: meeting up at a bank is a hassle.

PrivateAuto Pay combines the certainty of a bank-verified cashier's check with the immediacy and convenience of Venmo. It has no transaction fees and works 24/7/365 for payments up to $1M.

A Better Way to Pay for Cars

What if there was a seamless way to send digital payments to total strangers, instantly and fee-free?

Say goodbye to paper cash, checks, ACH transfers, and every other cumbersome payment method. It’s time for a better way to pay for private-sale cars.

What is PrivateAuto Pay?

PrivateAuto Pay is our integrated payment solution. It’s a core part of the PrivateAuto transactional marketplace, and it’s like nothing you’ve seen before.

Fee-free payments up to $1M.
Instantaneous payments enable real-time deals—no waiting or coordination. Close the deal when you meet for the test drive.
Instant payments work 24 hours a day, 365 days a year. No coordinating around banker’s hours.
Easily move money from your bank account to PrivateAuto Pay and vice versa. An instantaneous balance transfer can be done 24/7/365.
No exchange of contact or banking info—your sensitive information stays safe, protecting you from scammers.
Encrypted data protects you from hackers.
Escrow-like safeguards eliminate the need for an escrow service, so you can save money.
You can even buy a car remotely if you find your perfect vehicle in another state (and then arrange for transport right within our app).
Use PrivateAuto Pay for your transaction even if you met the seller on another site, such as Facebook Marketplace or Craigslist. Just invite them to our DealNow fast-track solution and enjoy the power of PrivateAuto Pay and our other transactional features.

How Does PrivateAuto Pay Solve Payment Issues?

With PrivateAuto Pay, you can ditch checks and pay instantly, safely, and conveniently right from your smartphone.

No more waiting for your check to clear. No more limited banking hours or coordinating complex wire transfers. Just seamless, instant digital cash payments between verified accounts, 24/7.

Pay safely in seconds without ever sharing personal information. Enjoy escrow-like safeguards without the third party fees.

Whether transacting in-person or buying a car in another state, PrivateAuto Pay is the smartest way to pay. You can act decisively on a great used car while keeping your money secure.

How Do I Buy a Car With a Check?

If paying by check in a private party car sale, here are the key steps:

1. Find a car to buy.
2. Get a cashier's check from your bank for the amount of the car’s purchase price.
3. Meet the seller at your bank during banking hours.
4. Have the bank confirm to the seller that the check is legitimate and that the funds will clear.
5. Verify all documentation, ensuring that the seller has properly filled out and signed the car title.
6. Give the cashier’s check to the seller and take possession of the car.

Easy peasy, right? Not so much.

How Do I Buy a Car With PrivateAuto Pay?

PrivateAuto Pay makes purchases simple and secure.

1. Browse used cars for sale by owner on PrivateAuto (or even on another site). Find the one you want to buy.
2. Fund your PrivateAuto Pay account. You can initiate a funds transfer from your bank anytime. No limits on transfer amounts. If you need to get a loan for your car, you can do so right in the PrivateAuto app. Once approved, the lender will fund your PrivateAuto Pay account.
3. Meet the seller via our in-app scheduler—without ever giving out personal info such as email or phone number.
4. Review your in-app bill of sale, financing terms, and other documents. Digitally sign them in the app. The seller signs them as well, and you get a notification when they have done so. Once you and the seller have electronically signed the bill of sale, they are legally obligated to transfer the title to you after receiving your payment.
5. Once you receive the notification that the seller has signed the bill of sale, approve payment. PrivateAuto Pay will instantly transfer the funds to the seller’s PrivateAuto Pay account.
6. The seller transfers the title to you and gives you the keys.
7. Drive away in your new-to-you car with a binding record of the entire transaction stored in your PrivateAuto account.
8. Complete the title transfer at the DMV, and get new license plates and registration.

Found a car you like somewhere else? We got you! Use our new DealNow feature to fast-track a transaction with our infrastructure, even if you met the seller on another platform like KSL Cars.

DealNow uses PrivateAuto Pay for payments and offers all the same conveniences, along with a fast-tracked deal flow. It not only bypasses the car shopping, messaging, and negotiation steps, saves money by eliminating the need for an escrow service but you can also pay for the car on the weekend.

Is Paying With a Check Better Than Paying in Cash?

Many buyers prefer a cashier's check for payment rather than a cash payment. A cashier’s check seems more certain than a personal check for transferring funds. However, unless you’re standing in front of the issuing bank during business hours and they verify the funds, the seller—if they're smart—won't see it as foolproof. Criminals have forged counterfeit cashier's checks to con sellers.

To be absolutely sure your cashier’s check is valid, some sellers wait for it to clear their bank before releasing the title. This puts pressure on you to pay a large sum while trusting the seller to sign over the car later. It also means meeting twice, which is inconvenient.

PrivateAuto is safe, instantaneous, and guaranteed. With PrivateAuto Pay, funds instantly appear in the seller’s account, unlike a cashier’s check. The entire transaction can be concluded when you meet for a test drive.

While cashier's checks are a step up from personal checks, they’re not all that great. For convenience and instant, guaranteed payments, use PrivateAuto Pay.

What Is The Best Place To Buy A Car From A Private Seller?

There are a sea of places where you can buy a car, but they don't give you the transactional features to get the deal done safely, securely, and inexpensively like PrivateAuto does.

Here are some popular platforms for buying used cars online:

eBay Motors
Local classifieds sites

These are all “meeting places” rather than true marketplaces; they connect you to the vehicle owner but don’t give you the transactional infrastructure to get the deal done.

PrivateAuto is the only transactional marketplace that offers a full suite of tools that let you get the deal done quickly, securely, and easily

Here's how we stand out from our competitors:

Verified users for trusted transactions.
Private in-app messaging with sellers.
Schedule vehicle transport within the PrivateAuto app
Eliminate the need for an escrow service.
Send instant offers on any vehicle.
Secure transfers of up to $1 million, instantaneous and fee-free
Shop for used car warranties and get warranty coverage
In-app test drive scheduling and document signing.
Complete purchases remotely without meeting in person (perfect for out-of-state transactions).
Apply for competitive financing from lending partners.
DealNow feature to fast-track a deal using PrivateAuto infrastructure.
Encrypted info protects your data from hackers
Shop insurance quotes and get coverage right within the PrivateAuto app

Even though PrivateAuto is by far the best car-buying app, we don’t hate these “meeting places” at all. In fact, if you find a car on one of them and want to buy it, you can still use our transactional infrastructure to get the deal done. Simply invite the seller to our DealNow fast-track feature to enjoy the security, privacy, and immediacy of PrivateAuto Pay and our other features.

Find your Dream Vehicle on PrivateAuto

Here’s the PrivateAuto car buying process, and how we make it easier.

Browse used cars for sale on PrivateAuto.

1. Make offers on cars you like (PrivateAuto is one of the only platforms that allows you to offer what you're willing to pay).
2. Message the owner and schedule a test drive without every giving out your contact info.
3. Meet up, inspect the car, and sign documents with the owner.
4. Send funds instantly.
5. Drive away with your new-to-you car.
6. Complete the title transfer and registration at your local DMV.

Looking to sell your car? Create a listing on PrivateAuto and connect with interested buyers today!
Image highlighting Buying Car Privately by PrivateAuto
Want to sell your car? Create a listing on PrivateAuto and connect with buyers today!

FAQ on Paying For a Car with a Check

What are the tax implications of buying a car in cash?

Unless you live in a state without sales tax, you’ll need to pay sales tax on your vehicle purchase. Other than that, there aren’t a lot of tax implications when buying a car—whether you pay cash or get a car loan.

Here’s what you need to know about tax implications for vehicle purchases in a general sense. Always do your research on your state’s requirements, as they may vary.

- No income tax. A car purchase is not taxable income, so no income taxes are owed.
- No gift taxes. Even gifting the car to someone later does not generally incur gift taxes unless it's a very expensive car. Individual state rules may differ
- Sales tax. You will owe applicable state sales tax on the purchase price. The rate varies by state but averages 4% to 7% of the car's value.
- Private sellers may not collect tax. You will need to formally self-report and pay sales tax to your local DMV when you register the car.
- Sales tax exemptions: research what exemptions are available in your state. Some states waive tax if a transaction is between immediate family members, or if the registrant is a religious organization, government body, or some other exempt status.

What if I can't afford to pay the full amount in cash?

What if I can't afford to pay the full amount in cash?

Does PrivateAuto offer plans for loan payments?

How do I avoid scams when buying a used car from a private seller?

What to do after you buy a car from a private seller?

What paperwork is needed to buy a car from a private seller?