Have a fair offer from an established independent dealer for my second car which I no longer have a use for. They are proposing to give me a company cheque over the weekend when I drop the car off for the full value of the car. He has also suggested that I keep the V5 ownership document until the cheque clears - then put in the post to them.
What are peoples thoughts ?? If the cheque bounces do I still have a right of ownership holding the V5?
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V5 means you are the 'keeper' not the owner. The car isn't theirs if they haven't paid for it. I wouldn't give them the car until the cheque has cleared, personally!
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I think you'd be okay as your keeping the v5, as long as you write a receipt stating that the sale isn't final until the cheque clears.
One point though, it would probably be best to take the v5 round in person so that you know it's been transfered properly. Also don't both buyer and seller have to sign it now?
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'established independent dealer'
Have they got premises and stock, local reputation?
All points to consider before releasing car before cheque clearance
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I don't know the ins and outs of cheque security, but whenever I have offered to pay a car or bike dealer with a cheque they always seem to ask "It's not a company cheque, is it"?, and happily accepted it when I said it wasn't.
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Would he do the same if you were buying from him with your Co cheque ?
:-) P
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Why not split the difference over the fee for transferring the funds directly from their account to yours? I would be personally very wary as no matter how good their reputation is, they could be about to go to the wall literally within a week so have nothing to lose and everything to gain.
Give you cheque, get car off you. Sell car 2 hours later for cash, money in pocket, tell buyer V5 to follow. Then they go to the wall on Monday morning, don't open for business and you then have a struggle on your hands!
Not saying thats the case but if you sold something on ebay and the buyer was paying by cheque, would you not insist on waiting for the cheque to clear before posting the item?
Finally, I work for a large supermarket and I know we have the facility to call a "clearing centre" if someone is paying by company cheque to "reserve" the funds for us but not sure if that is open to the public.
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Personallly I wouldn't accept a company cheque for a car until it was cleared. A company cheque means nothing if the company that issued it is insolvent !
I would say that if you do take the cheque and it bounces, you retain ownership of the car, however getting it back may be complicated with liquidators or bailiffs involved etc.
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It really comes down to how confident you are about the dealer's financial status and honesty. Equally he might be wary of you clearing his cheque then not handing over the car. You could ask him to get a bank draft and offer to pay the £15 fee for him.
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I have not bought a new car for 5 years but paid with Debit card (Switch now Maestro).
I presume the garage has a terminal for credit cards/debit card payments (deposits, repairs etc) - there is no reason why they cannot "do a refund" on the terminal - just like taking back a jumper to M&S after Xmas.
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What about all the parking tickets and congestion charge fines they'll rack up until you've notified DVLA.
Also, until sometime in 2007 (when the rules change), a cheque can never be properly cleared and the bank can still take it back - sometimes after months ! If he's a proper dealer get him to do an electronic transfer - we are in the 21st century now.
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There are stories around of bank drafts bouncing and cleared cheques being withdrawn up to 14 days later. I wouldn't touch anything other than cash.
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Even cash can be forged if you're being ultra cautious!
In the case of bank drafts, only forged or stolen ones are a problem - unlikely in the case of a dealer with premises who's been there for a meaningful time. And you can call the bank to check it's genuine if you're at all concerned (providing they're open).
I've done electronic transfer when buying and selling - possibly the best method, bar cash.
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Cash is always good imo. But the amout involved here may be more than the dealer wants to keep (or is insured to keep) on his premises and the seller of the car may not feel comfortable walking around with that amount of money in his pocket.
I think you have to weigh up the quality/integrity of the dealer and discuss with them if there i s any other method of payment, icluding paying for special clearance on the cheque if both parties go to the bank together with the V5 to be swapped on completion.
It's not the first transaction lke this in history and probably 99% happen ok; its the 1% that cause the problem though !
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There are stories around of bank drafts bouncing and cleared cheques being withdrawn up to 14 days later. I wouldn't touch anything other than cash.
These are valid comments, unfortunately. If anyone has heard of the scam, where people buy your car and give you more than the aksing price so you can give them a cheque for the balance. This scam relies on the banking system saying a western union cheque is cleared and then saying it isn't after 14 days.
An absolutely outrageous state of affairs that no one seems to be doing anjthing about. In these days of secure intenet banking, encryption and firewall technology, the banks seem to be clinging onto Dickensian ways of doing things, probably because it suits their ends.
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Frankly, if anyone falls for this, they wouldn't get much sympathy from me!
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Frankly, if anyone falls for this, they wouldn't get much sympathy from me!
Totally agree with you
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>>An absolutely outrageous state of affairs that no one seems to be doing anjthing about.>>
Anyone who falls for one of these "Nigerian 419" scams, usually sent by e-mail, deserves to lose every penny...:-)
The perpetrators rely on the greed on the part of what is, in reality, usually a very tiny number of the thousands who receive such e-mails for success.
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What\'s for you won\'t pass you by
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Cash, cash and more cash until banks make a cleared cheque irreversible. I believe that a cheque is never fully "cleared" as I understand it. That must be to ensure that the risk stays with the punter, not the bank. One cannot even close an account as soon as the cheque "clears", the money-counters will still come after you :-(
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Would he take a cheque from you? Thought not.
Cash, or electronic transfer. Simple.
Don't touch a company cheque with a bargepole.
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Do not release the car upon receipt of the cheque. Take it to your bank and ask for it to be "sent direct" ie: it is posted to the company bankers who then give a definitive yes or no as to whether it is "paid". (It wont clear any quicker on your statement or your banks computer , but this is irrelevant - you are trying to establish whether it is "paid")
The disadvantage particularly at this time of year is you are at the mercy of the postal service.
Your bank should phone you the next day with an answer - record the name of the person you speak to and the time and date of the call.
Re the V5 - do this when handing over the car once you have established the above - fill in section 9 (V5C/3) which you both sign. This puts the car "into the trade" pending its sale to the next owner. YOU send this part of the V5 to DVLA and give the rest to the dealer. Swansea will then send you a letter confirming your are no longer liable for this car.
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Premises and stock are no guarantee. There may be mortgages and loans secured on both. And the dealer may be like Farepack//... about to go bust now!
Bank transfer or cash...
madf
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