| | How To Pay For a Second Hand Car?
I'm sure a lot of you have bought second hand cars or sold cars and received payment for the same. My question is regarding the mode of payment you used. Why? Because whether you are buying or selling, it's your hard earned money and you don't want to loose it. So let use examine the pros and cons of the various transaction methods. Please note I am not discussing paper work related to transfer of the vehicle and checking the vehicle etc. This has been discussed in detail in other threads.
Pros - One of the simplest methods. One party has the cash, the other has the car. You meet at a specified place (usually the sellers residence or office), buyer hands over the cash and seller hands over the car.
Cons - Your CA may not approve of such a transaction.
- Carrying large amounts of cash to an unknown location is risky.
- Possibility of fake notes (if you are the seller).
2. Cheque / Demand Draft / NEFT:
Pros - Your CA will love it.
- No risk of carrying large amounts of cash.
- You have a record of the transaction in case you need to make a police complaint for whatever reason.
Cons - Possibility of Cheque bouncing or fake Demand Draft.
- Seller will not hand over the car until the cheque / DD is realised or the NEFT is complete. Now what if he decides not to give you the car or he just disappears. Money down the drain. Yes you can file a Police complaint etc. but then that takes time and there is no guarantee you'll get your money back.
Pros - Safe as it is done at a dealer (New/Used). Just hand over your old car and adjust the difference in the new car price.
Cons - Exchange deals mean that you usually don't get the best price. The deal may look good but you are usually better selling off the old car separately.
- Possibility of cheating by some dealers, specially the used car dealers.
- Limited choice.
Please give your views on the above and feel free to add more modes of payment and pros and cons to the above.
I am planning to buy a second hand luxury car and I'm worried about the payments as it will be a significant amount of money.