Safest way to accept payment in a car sale

[dhutton]

It looks like I have sold a car and the buyer wants to pay me cash when he picks it up. I don't want to do that since it will raise a flag with the IRS when I deposit it in the bank as far as I know. I am not making money on the sale, I just want to avoid a hassle. I have done this easily in the past when the buyer and I used the same bank but that is not the case this time.

What is the best non-cash way to accept payment and immediately release the car without taking a risk of getting a fake cashier's check etc? I've already been Keislered once this year.....

Thanks,
Don

[Rick Dorion]

I think a bank has to report a deposit of $10,000 and more(?) I sold a car for cash and made a few deposits over several weeks. Also, had to verify all the bills' watermarks before signing over the car! Anyway, didn't answer your question but congrats on the sale.

[dhutton]

This is more than $10,000. As far as I know cash is the trigger for the banks to report. At least I have never had an issue otherwise when deposits were checks for more than that amount.

I'm not making any money on this sale. I'm just trying to avoid a potential hassle.

Thanks,
Don

[rickpaw]

$10k will trigger a report to the IRS. You can make several deposits but it can be a hassle. If the buyer is local, meet him at his bank where you can watch the cashier's check being handed over from the bank to him. That way the chance of fake checks can be minimized.

Congratulations on the sale and good luck.

[MattO]

If he does pay in cash, make sure to verify every bill. Feel the collars of the shirts of the picture (there is a definite texture there), observe the color shifting ink that notes the denomination, look for random red and blue fibers, of course, the water mark, and if you have a black light, anything from a 5 to a 50 has a special stripe inside the bill that shows up under black light and also has the denomination written inside of that stripe (20's are green, and 50's are blue/purple I believe). I am not 100% sure the 100's have a stripe like the other bills that shows up under black light, but I think they do have the same stripe noting the denomination.

[Van B]

I always like a wire transfer. But if he is coming to you with cash, make an appointment at your bank to verify all the bills, plus then he knows you don't have a pile of cash sitting at the house after he leaves with the car. It is him that will have to fill out the government forms.

[WSSix]

Cash is the safest way. Just deposit the money over the course of a few months or weeks if possible. Grab yourself a black light before going and scan every dollar.

The other option is wire transfer. You'll have to give him your bank account and routing number though. I've been told this is still safe because even with that info he can't initiate anything. I've never done it though.

You may be able to get a separate account created just for this one time or for occasional use. Possibly talk to your bank to see if they are willing to help or have an option.

[CamaroMike]

Originally Posted by Rick Dorion

I think a bank has to report a deposit of $10,000 and more(?) I sold a car for cash and made a few deposits over several weeks. Also, had to verify all the bills' watermarks before signing over the car! Anyway, didn't answer your question but congrats on the sale.

It is illegal to do this, they call it staggering? because of money launders do this apparently. In your case its just selling a car so not illegal obviously. As long as there was no gain on the sale then you dont have to pay tax on it (last time I checked)

There really is no "safe" way of doing it. Even a wire transfer can go bad.

The best way I can think of is go to his bank with him and watch them print out a certified check (cashiers check) and deposit it in yours before he can spend the money in his account.

I could go on all day on ways people can screw you over. Hate to say it but cash is the best way and as said before mark the bills and make sure there is texture on Ben's coat! If he has all new 100's then you are good to go! Best of luck -Mike

[V8TV]

I'd also recommend getting a marker to check the bills - my bank gives them to me, but I think you can get them at Walmart also.

[GregWeld]

Don't worry about making a deposit of cash into your account - regardless of whether or not it's in a bank or to an account like Schwab. The IRS is not looking at transactions like that UNLESS you're a drug dealer or cartel.


I make very large transactions on a regular basis and have never ever been asked about any of them. Profit or no profit.

You should be able - however - to show receipts etc for the car and it's parts - and that you sold it if asked down the road (as in 5 years from now).

DO NOT TAKE A CASHIERS CHECK EVEN IF YOU TAKE IT TO THE BANK WITH THE BUYER!! I personally know a guy that did that -- and TWO WEEKS later the bank said the Cashiers Checks was fake and took the funds out of his account! TELLERS are not the fraud department!