How to Pay for a Private-Party Car

When you buy a used car from a private seller, you’ll need to pay for it. It turns out that there aren’t a lot of great ways to move large sums of money between strangers. At least, there haven’t been until now. We created PrivateAuto Pay to make the process safe and easy.
When buying a private-party used car, you're going to have to pay for it. Shocker, right? It turns out that the payment portion of the transaction is surprisingly sticky. Or was, until we developed PrivateAuto Pay.

PrivateAuto Pay empowers instant, fee-free payments of any amount. It's like Venmo for large transactions. Before we get into how amazing it is, let’s look at why other avenues are less than awesome.

The Trouble with Other Payment Methods

Incumbent payment options involve one or more of the following:

1. Risky
2. Untenable for large transactions (volume limits on transfers)
3. Inconvenient
4. Slow

These factors introduce a lot of friction to the private-party transaction. You don't need that.

How to Pay Cash for a Car

Buying a car with cash can save you a lot of money that would go to interest had you chosen to finance the vehicle. We're big fans of paying cash for a car.

Physical cash can be a bit sketchy, though, especially where large sums are involved. If you're a cash buyer, meetups with strangers can feel unsafe when you’re toting fat stacks of bills.

Here are some drawbacks to physical cash transactions:

Trust: do you really know the person you're dealing with? How do you know they’re not going to take your cash and run?
Counterfeit cash: while counterfeiting is rare, can you prove to the seller that the bills are genuine?
Counting bills: do you enjoy counting out stacks of bills under the watchful eye of a stranger?
Paperwork: do you know how to do the bill of sale and title transfer for your state? Will you have a record of the transaction in case the seller wants to contest it?

PrivateAuto Pay allows you to pay cash—digitally. Actual dollars from your account to the seller’s, instantly.

No security worries, no counterfeit concerns, no transfer fees, and no limitations on transaction size. A few taps on your phone screen sends any amount instantly and securely.

PrivateAuto Pay keeps what's best about cash and pairs it with 21st century convenience and security. Out with stacks of grubby bills, in with smooth digital payments.

Just fund your PrivateAuto Pay account from your bank account (checking or savings). When you meet up for the test drive and approve the vehicle, you and the seller will sign the bill of sale in the PrivateAuto app and you’ll be prompted to initiate payment. When you approve payment, cash will instantaneously move from your PrivateAuto Pay account to the sellers. Done.

PrivateAuto Pay is the safe, convenient, fast way to pay cash for a car.


A Cashier's Check is Inconvenient

Many buyers prefer a cashier's check for payment when buying a used car. 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 cumbersome.

Other sellers will insist on meeting you at your bank so the bank can verify the authenticity of the cashier’s check. While this works, it’s inconvenient and time-consuming.

With PrivateAuto Pay, funds instantly appear in the seller’s account, meaning you can get the deal done and be on your way. Plus, you get to skip the inconvenience (and limited banker’s hours) imposed by a cashier’s check.

Peer-to-Peer Cash Sharing Apps Have Limits

Peer-to-peer money sharing apps like Venmo and CashApp are handy for splitting bills and sending money to your friends and family. But when it comes to larger payments, they fall short. With weekly sending limits of around $5,000, these apps won't work for buying a $20,000 Honda Civic, to say nothing of a $50,000 Jeep Wrangler.

PrivateAuto Pay offers a better solution. You can securely send and receive any amount fee-free and instantaneously, 24/7/365. As convenient as Venmo, without the limitations on transfer size.
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Wire Transfers are Cumbersome

For large transactions, many buyers opt to pay for a car by bank transfer. The advantage is that funds are guaranteed by the banks involved, making it a relatively safe payment option.

Wire transfers may be fairly secure, but they’re cumbersome to navigate.

Bank transfers require coordination between the buyer, seller, and two banks. If initiated outside banking hours, transfers can take days to complete. The seller must provide their banking details to the buyer, opening themselves to potential financial harm.

PrivateAuto Pay enables instant transfers between buyer and seller accounts, anytime, 24/7. No exchange of financial info. No reliance on outside institutions. No coordination needed. And no waiting.

For fast and seamless cash payments, PrivateAuto Pay is the new way to transfer funds instantly between bank accounts.

Are Credit Cards Any Good?

Credit cards are a lousy way to pay for a private-party car. Here’s why:

Credit card processors (e.g., Stripe) charge processing fees in the range of 3%. This adds up really fast when you’re spending $25K, $50K, or $70K on a vehicle. It certainly wipes out any credit card rewards you might get from the transaction.
It’s a giant hassle to set up a credit card transaction between two strangers. You’ll need to exchange sensitive info in the process. And it’s not instantaneous, meaning you won’t be able to get the deal done in one go.
Sellers hate credit card payments because they’re afraid of chargebacks. Yes, some unscrupulous buyers try to claw their money back after a private-party transaction, and it has sellers leery. A smart private-party seller prefers a payment method that can’t be reversed.
If you can’t afford the car outright, credit cards are a terrible way to finance it. Credit card companies charge insane interest rates. Get an affordable car loan from an auto lender instead, and your monthly car payment will be a lot lower.

The Best Way to Pay for a Used Car From a Private Seller

PrivateAuto Pay is our native payment gateway that gives you escrow-like safeguards and ultimate convenience and security. Here's how it works:

Your PrivateAuto Pay account is an FDIC-insured bank account that you own, accessed via your PrivateAuto profile.
Easily move money between your PrivateAuto Pay account and your external bank account via a balance transfer.
Send up to $1 million with no transaction fees.
Instant payments arrive any time of day, every day of the year.
No exchange of contact information or banking info.
Encrypted info protects your data from hackers.
Conclude the entire transaction when you meet the seller for a test drive. You can even buy a car long-distance and forgo that costly and inconvenient escrow company.

Start a Deal Anywhere, Conclude it With PrivateAuto Pay

PrivateAuto pay is pure magic. It’s so much better than other payment methods that there’s really no comparison.

Good news: we’ve now made PrivateAuto Pay available for users of other platforms such as Craigslist and eBay Motors. You can fast-track a transaction using our DealNow bridge product, which allows you to start a deal anywhere and conclude it with PrivateAuto.

What is DealNow?

If you’ve already found a car that you want to buy—even if it’s not listed for sale on PrivateAuto—you can enjoy the power and convenience of PrivateAuto’s transactional infrastructure to get the deal done. Our DealNow fast-track solution allows you to skip the initial shopping and negotiation process and go straight to the transaction.

Whether your dream car is listed on Facebook Marketplace, is being sold by a friend of a friend, or is being auctioned on a site such as Bring a Trailer, you can invite the seller to DealNow and enjoy unparalleled security and convenience.

DealNow uses PrivateAuto Pay for payments and offers all the same conveniences, along with a fast-tracked dealflow.
Here's the DealNow transaction flow:

1. Invite the seller to DealNow via a custom link.
2. Enjoy identity verification, in-app messaging, and a test drive scheduling feature (none of which require you to exchange contact info).
3. Meet the seller and test drive and inspect the car.
4. You and the seller go together through a step-by-step transaction process in which you each confirm relevant details right in the PrivateAuto mobile app. From mileage to the VIN to the condition of the vehicle, we help you both prevent any errors.
5. You and the seller each electronically sign an official bill of sale. This is stored in your PrivateAuto account as a legal record you can refer to down the road.
6. We prompt you to initiate payment after the seller is legally bound to the transaction from e-signing the bill of sale.
7. The seller gets a notification of funds received.
8. The seller signs over the car title and hands over the keys.

DealNow is so smooth, so safe, and so fast that you’ll never want to buy a car without it. No matter where you find your car—from eBay Motors to Autotrader to your neighbor next door—DealNow will help you get the deal done, quickly, safely, and conveniently.

What if I Need to Finance My Car?

Not everyone has the cash lying around to buy a car outright. If you need to finance your next vehicle purchase, we've got you covered.

PrivateAuto offers integrated financing with affordable auto loan rates. It all happens seamlessly within the PrivateAuto ecosystem. After a credit score check and approval, qualified buyers can have funds transferred into their PrivateAuto Pay account via a balance transfer between financial institutions.

Once financing is secured, you can instantly send money from your PrivateAuto Pay account to the seller after finding the right used car. There's no need to coordinate with lenders or manage loan paperwork.

Everything happens in the PrivateAuto app, from initial financing application to funding the vehicle and sending payment.
Fast approvals. Get approved in minutes without having to fill out extensive paperwork.
Funds deposited quickly. Once approved, you'll have financing deposited into your PrivateAuto account within days.
Instant transfers. Send funds instantly to the seller right from your PrivateAuto account.
One-stop-shop. Handle the entire private-party sale on PrivateAuto, from vehicle search through conclusion. You can even get additional services such as car transport, vehicle inspections, and more, all through our Service Hub.
Competitive rates. PrivateAuto offers financing from an FDIC partner, so you get competitive used auto loan rates.

Apply for used car financing through PrivateAuto today!

What to Do After You Buy a Car from a Private Seller?

Buying a car from a private seller (as opposed to a dealer) may take a few extra steps. It’s worth it: you get more vehicle for your money when you forgo the middleman markups and documentation fees associated with dealerships.

While individual states can have different nuances, here are the most common items you need to handle after you buy a used car from a private seller:

1. When you purchase the car, the seller should provide you with the signed title. Review it to make sure their name is listed and they signed it over to you.
2. Before driving off, contact your insurance company to add the car to your policy. You typically need valid insurance in your name to drive legally. Make sure you have proof of insurance.
3. Head to the DMV as soon as possible to transfer the title to your name and register the car. Bring the title, bill of sale, ID, and insurance documents. Pay any required sales taxes and registration fees.
4. The DMV will provide you with new registration documents and license plates for the car in your name. These are required to legally drive the car.
5. All states except California and Minnesota: the seller will remove the license plates and you’ll need to get new plates from the DMV.
6. Consider having the car inspected for safety and emissions testing if required in your state. The DMV can provide guidance.
7. Notify your insurance company that the car is now registered in your name. Provide them the new VIN, plates, and registration.

Buying a car is sort of like starting a relationship. You’ll be spending a lot of time together. Start things off right by handling all the details associated with buying a car from a private seller.

Image highlighting Buying Car Privately by PrivateAuto

What is the Best Place to Buy a Car from a Private Seller?

PrivateAuto is the world’s only transactional automotive marketplace that provides the infrastructure and tools to transact securely. Other so-called “marketplaces” are just “meetingplaces”; they connect a buyer and a seller, but don’t support the transaction.

PrivateAuto is far and above the best car-buying app, but what if you don’t find the car you want? Maybe your perfect vehicle is listed on Craigslist, Facebook Marketplace, or CarGurus.

No problem. Find a car on another platform, then hop over to PrivateAuto to conclude the deal securely and quickly. Our DealNow fast-track solution gives you PrivateAuto's seamless transaction support. Built-in tools like verified identities, legally binding documents, and lightning fast payments with no limits on the amount you can transfer.

So if your dream car pops up somewhere else, no problem! Use DealNow to wrap up the deal conveniently and safely. PrivateAuto's first-of-its-kind transactional tools enable smooth purchases regardless of where you discover the ideal set of wheels.

Payments FAQ

Does PrivateAuto offer payment plans?

PrivateAuto is a transactional marketplace that connects you directly with private sellers. You do not pay us for your car; you pay the seller. We do offer in-app financing options via a third party lending partner. You can apply for financing within our app. If approved, the lender pays the seller in full while you make your monthly loan payments to the party lender according to the terms of the loan.

How does PrivateAuto vet buyers and sellers?

Does PrivateAuto provide the necessary paperwork for a successful transfer of ownership?

What is Private Seller Exchange?

Do I need an escrow service when buying a car privately?

How secure is PrivateAuto Pay?

Why are private vehicle sales better?