First Time Spending over 10k. Cash or Cheque?

idonteven on 05/06/2015 - 05:26

I'm about to purchase a car privately. I'm quite young so I don't have much experience handling big amounts of money and just wanted the safest way for me to go about it.

Car is just over 12k. Would going into my bank (cba), organising a cheque and paying the required fee (not sure how much it is) somehow give myself more protection if the transaction doesn't go smoothly? I.e. The buyer somehow screws me over but I'm able to cancel the check whilst it's pending or something (just hypothetically). Not too savvy on how this all works.

As opposed to having excessive amounts of cash on me or not having any leverage once I hand over all the cash (if this is even possible).

I am aware of buyers beware and am leaning towards cheque but would love to hear all your opinions and criticisms. Also do I need the account number of the person I am making the cheque out to or do I simply write it up and hand them the cheque that they do whatever they want with?

Financial

Comments

  • RockyRaccoon on 05/06/2015 - 07:40
    +11

    You are confusing two things here.

    1. Safety of paying, so you can avoid being mugged etc
    2. Safety of the purchase - if its a dud.

    Paying by Bank cheque protects you in the first instance. You cant stop a Bank Cheque if it was used legitimately - you paying for the car. Sure some one will tell you that you can cancel by saying it was stolen etc. But that's fraud, its a lie and there are laws covering this. That's why Bank Cheques are used and accepted, so the seller has some protection.

    Safety of purchase. If you are buying privately its Buyer beware. You are buying as is. Any guarantees are only as good as the word of the seller. Nice sellers with nice houses can play just as tough as those who's lawn hasnt been mowed for a year.

    The best way for protection under 2 is to have someone knowledgeable check the car, eg NRMA. Also do a revs check on the car to check it's title

    http://www.fairtrading.nsw.gov.au/ftw/About_us/News_and_even…

  • ESEMCE on 05/06/2015 - 08:16
    +1

    Seller is likely expecting a Cheque, no-one wants to carry $10k in cash around with them, not you, not the seller.

    You need the Account Name (usually the name of the seller) to make the cheque out to.

    • the-mal on 05/06/2015 - 09:53
      +5

      Just to clarify for OP, they'll be expecting a Bank Cheque, not a Personal Cheque. Personal Cheques can bounce, Bank Cheques can't (unless the bank goes under).

      • [Deactivated] on 05/06/2015 - 10:51
        -2

        Of course bank cheques can "bounce", you can read all about it on the banks' websites. Paying by bank cheque is fine. Receiving a bank cheque has the same risk as receiving a personal cheque.

        • the-mal on 05/06/2015 - 11:03

          Receiving a bank cheque has the same risk as receiving a personal cheque.

          No it doesn't.

          I can write a personal cheque for you right now for $1,000,000,000. I can't get a bank cheque for that without altering it fraudulently.

          Bank cheques have substantially less risk than personal cheques. They're not risk free, neither is cash (cash can be counterfeit, cash could be proceeds of crime and later seized by police etc).

          Bank cheques are very low risk on the seller. Personal cheques are very high risk.

        • [Deactivated] on 05/06/2015 - 11:16
          -1

          @the-mal:

          I can write a personal cheque for you right now for $1,000,000,000. I can't get a bank cheque for that without altering it fraudulently.

          And you don't think writing a cheque for $1,000,000,000 when you know it won't be honoured isn't fraud?

          If you're dealing with a scammer, worrying about them having sufficient funds in their personal cheque account but happily accepting a bank cheque off them is stupid.
          You only have the money after a cheque clears, be it a bank cheque or personal cheque.

          ABC 7.30 Report, 21/03/2002:
          "As far as the industry is concerned, a bank cheque is worthless until it's cleared and therefore there's no need to transport them under high security."

          "Bank cheques are open to forgery. They're open to being counterfeited. Really they're only a piece of paper with writing on them. There's no real way of verifying the validity of the cheque that you have in front of you."

  • Bmann999 on 05/06/2015 - 08:23
    +5

    In regards to bank cheques from CBA, I have had 5 written and each time I have gotten them to successfully waive the $10 fee. I just ask nicely and tell them about how long I have been a customer and the different CBA products I have. Each time the teller went back to the manager and got approval. They always say this is a one time offer, but they keep doing it for me.

    I would really recommend doing a PPSR check on the car. That way you can check if the car has been written off or was ever stolen. You can also see if someone has a loan against the car.
    http://www.ppsr.gov.au/Pages/ppsr.aspx

    What are you worried about getting screwed over about? Is it that the car is faulty or that they are going to outright scam you and sell you a stolen car?

    If you are worried about getting scammed, I would ask to see registration forms, proof of purchase, and a license from the owner of the car (often times the owner is not the one selling it).

  • t_c on 05/06/2015 - 08:26
    +2

    If your that inexperienced with cars, you might be better of buying new or ex demo with manufactures warranty.
    Lots of cars available around that price range.

  • Caveman on 05/06/2015 - 09:10

    If you use cash you won't have a record of the transaction if something does go wrong, then the seller can deny the fact that you paid. I suggest you play it safe

    • mskeggs on 05/06/2015 - 13:16

      I don't understand this. Cash or cheque makes no difference.
      Regardless of how you pay, you should ask for a receipt stating the date, how much the seller received and what it was for, and ask them to sign it.
      In NSW the seller must also complete the notice of disposal on the rego papers.

  • scrimshaw on 05/06/2015 - 09:11
    +3

    I recommend going to Pickles Car auctions… you can visit them and request a checkup prior to purchase, and you can also search on their website and click on Condition reports to download an info sheet.

    http://www.pickles.com.au/

    I bought an ex-fleet 1 year old Corolla for 15K and it's been good…

  • the-mal on 05/06/2015 - 10:00

    You want to pay with a Bank Cheque. For this you'll need the persons Bank Account Name (not number) before you go to your bank to get the Bank Cheque.

    As covered above, a Bank Cheque does not cover you if you're sold a dodgy car. Nothing covers this. You need to be absolutely 100% sure of your purchase before you hand over any money.

    This includes getting a mechanical inspection done on the car and doing a REVs/PPSR check to ensure it's not a repaired write-off or has money still owing on it. Mechanical Inspections will set you back a few hundred dollars but are worth it! Better to spend $200 upfront than waste $12,000 on a dud car.

    The Bank Cheque protects you from carrying 10k in cash that can get stolen, and protects the seller because a Bank Cheque is as good as cash (it can't bounce).

    Make sure you're 100% sure the car is mechanically right before you pay. You will not get a second chance. If you buy a lemon you own a lemon. It is not the responsibility of the seller to tell you about any faults with the car.

    Be careful! Have fun!

    • [Deactivated] on 05/06/2015 - 10:56

      a Bank Cheque is as good as cash (it can't bounce)

      Commbank: "Bank Cheques should not be considered as good as cash."

      • the-mal on 05/06/2015 - 11:01

        Personal Cheques routinely bounce due to lack of funds. Bank Cheques do not bounce due to lack of funds.

        They can be "dishonoured" for reasons such as:
        - Being forged
        - Being altered
        - Reported stolen
        - Court Order

        http://www.nab.com.au/personal/help-and-guidance/personal-ba…

        It's a million times safer than a personal cheque.

        • [Deactivated] on 05/06/2015 - 11:06

          It's still not "as good as cash", nor is it a million times safer than a personal cheque, they are the same: in both cases you don't have the funds until either cheque clears.

  • nocure on 05/06/2015 - 10:27

    Had the same experience recently…do your homework,check the Redbook value,use that price as your bargaining tool…get a bank cheque (which you can cancel if you dont decide to get the car) for the lower amount you are willing to pay and a little cash just in case the seller won't bargain…do not use cash…be prepared to walk away.

  • idonteven on 05/06/2015 - 10:36
    +1

    I didn't know about personal check and bank check. And I've already gone through and checked do it the car, done inspection,ppsr etc.

    When I said screwed over, I was speaking hypothetically so any example could apply but I guess I'm being overly cautious. Will definitely do bank cheque. Thanks very much for the informative answers everyone.

  • nocure on 05/06/2015 - 10:42
    +1

    Use the bank cheque…if you don't use it just return it to the bank and they will refund into your account , just don't make it the asking price..give yourself some bargaining room.

  • Nutrino on 05/06/2015 - 11:56
    -1

    Having sold a few vehicles before Privately (upto $8000), i only take cash.

  • mskeggs on 05/06/2015 - 13:24
    +1

    I wouldn't have a problem with handling cash in this case, if you are happy the exchange is happening somewhere reasonably safe (like the sellers home, for example).
    If the seller did want a bank cheque, I would get it made out for 90% of the value and give the balance in cash.
    That way if at the hand over if there is something slightly amiss (the tow bar is removed, or the roof racks are gone, for example) you can haggle down the price a bit.

  • idonteven on 05/06/2015 - 20:17
    +2

    Got a bank cheque made and a bit in cash. Also took some of your suggestions and got the $10 bank fee waived. The teller made me look at a free quote on cba insurance but it was well worth it to save $10 haha. Thanks so much everybody.

    P. S. The teller told me that if anything goes wrong I can just call up and cancel the cheque before it clears which seems to contradict what a few people said.

  • MementoMori on 19/06/2015 - 23:52

    Another option for payment is you both go into YOUR bank together and do an over the counter transfer from your account into his/her BSB/Account.

    Safest option I believe and most comfortable for both seller and buyer. Just have to do it during bank opening hours.

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