Can a PO bank afford a car?
This is important because most of the time, buying a car is about a lot of money. Here you can find out which payment options you have, which of them is the safest and what you have to pay attention to if you want to pay for your car without the risk of fraud.
Buying a car is a well-considered decision for most people because it usually costs a lot of money. That is why there are always cases of fraud. Here we explain to you what you should pay attention to when paying for your car and how you can pay securely:
- How does the payment work when buying a car?
- When do I have to pay?
- Do I need to pay a deposit?
- How can I pay when I buy a car?
- cash payment
- Bundesbank check
- Cash transfer
- Payment with mobile phone app: secure payment
- Trustee service, shipping company & forwarding agency
- Suspected fraud: what to do?
How does the payment work when buying a car?
Before paying for a new or used car, you should always check the car with your own eyes first. This is especially important for offers from the Internet. Only by visiting the site can you be sure that the car actually exists and that you are not falling for a fraud.
In order to be able to examine the car really well, we also recommend that you take a test drive with the car. You can check the car for defects and test how the vehicle can be driven.
Tip: It is best to bring someone else with you for the test drive who is familiar with cars and buying a car. It can help you discover hidden defects on the car or identify counterfeits on the papers, if they exist.
Only after the test drive should you decide whether you really want to buy the car. Our checklist for the test drive will also help you. If you are sure about the car purchase, you should determine with the seller how you want to pay for the car.
Fraud cases can often occur, especially with private car purchases. The Safe Car Buying Initiative (a merger of ADAC, autoscout24.de, mobile.de and the crime prevention department of the police) generally recommends paying with cash. The payment method is considered very secure.
The payment should ideally be part of the so-called step-by-step process. This means: In the first step, both parties sign the purchase contract, only then does the buyer pay. The important documents, car and keys are then gradually passed between buyer and seller.
You can find out which documents are important when buying a car in our guide below. The entire handover usually doesn't take long. In any case, you should take enough time to check all important documents and the car.
The initiative also advises: Never pay in advance using a cash transfer or online transfer service. It could be a scam.
When do I have to pay?
Basically: You should always pay after both (buyer and seller) have signed the written sales contract. Under no circumstances pay until you have seen and inspected the car.
It is best to only make the payment in return for the complete handover of the car, all important documents and the car keys. The important documents include:
- Signed sales contract with notification of sale for the registration office and insurance
- Registration certificate part I (vehicle registration) and part II (vehicle registration)
- Certificate of the last general inspection (HU) and the emissions test (AU)
- operation manual
- Check book (= service book), if available
- Maintenance and repair invoices, if any
- Pictures and reports in the event of accident damage, if available
- General operating permit (ABE) for accessories and add-on parts, if available
- Building permits and partial appraisals for accessories and add-on parts, if available
- Copy of the seller's ID (only for security)
- Power of attorney if seller and owner are not identical.
Do I need to pay a deposit?
Down payments or other forms of advance payment (payment in advance, for example by bank transfer) are generally not common when buying a car. This also applies to vehicle sales over the Internet. If you are asked to pay in advance when you buy a car privately, it is better not to buy the car. You should be especially careful if you have not yet seen the car with your own eyes. Because the car may not even exist.
The following applies: If the buyer asks for prepayment, it could be fraud. Caution is advised here.
Example of a scam method: If it is a fraud, the seller often requires a deposit first. He comes up with an excuse for this: He claims, for example, that he needs proof of your solvency (proof that you have enough money to pay for the car). Or he claims that he has to finance the freight costs to Germany (when buying from abroad) with your down payment. Often times, you should send the money to the seller via a cash transfer service such as Moneygram or Western Union.
If the seller has received the money, he usually breaks off contact immediately. Then it looks bad for you: your money is gone, but you will most likely never see the car. Because with the use of a cash transfer service like Western Union you cannot get the money back as soon as it has been withdrawn. The fraudster then usually picked it up with a forged ID for a long time and went into hiding with it. Even the police can do nothing more in this case. In reality, most of the time, the car didn't even exist.
Danger: Even with car dealers, it is better not to make down payments. There is also the risk of losing the money in the end: for example, if the car dealer files for bankruptcy before the car was delivered. You then sit on the damage. You can then no longer claim your money back.
How can I pay when I buy a car?
The recommended and safest method of paying when buying a car is cash. But there are other payment methods as well. Here we explain everything you need to know about it and give you tips on what to look out for.
A popular way to pay for a car is to pay in cash. This is basically the safest payment option when buying a car. Most private car purchases are therefore also made in the form of cash payments.
When buying a car, the buyer brings the money to the seller in cash. So that there is no risk, you should pay attention to the following points:
- Both parties (buyer and seller) should first sign the written sales contract.
- Then the money, the vehicle, vehicle keys and vehicle documents should be handed over step by step between seller and buyer.
- Usually you have a large amount of money with you when you buy a car. So make sure to meet in a busy place (for example, a public parking lot in front of the supermarket) and in daylight. It is best to bring someone with you to the handover.
Tip: It is best to meet during the day with the light in the parking lot in front of a bank to hand over the vehicle and money. So you can go to the bank together to withdraw the money. In this way, the buyer does not run the risk of being stolen. The seller can rest assured that he will not receive any counterfeit money.
Important: Make sure to pre-order larger sums of money from the bank or to have them activated for the day. Because normally you can only withdraw a limited amount of money per day from any bank with the EC card. In order to be able to withdraw more than 10,000 euros in cash today, according to the law, you also have to show your ID at the bank. Therefore, pay attention to the current opening times of your bank.
By the way: In our guide to buying a car with a checklist (including a sample sales contract), you will also find important information and tips on what to look out for when checking the vehicle, negotiating prices and buying a car.
As an alternative to paying in cash, you can also use a Bundesbank check to pay for the car. In the case of the Bundesbank check, the amount is debited directly from the buyer's account and is temporarily deposited in an account at the Bundesbank.
This gives the seller the assurance that the check can be cashed immediately and that the account has sufficient funds. The buyer does not have to carry the cash around with them. As with cash payments, the Bundesbank check is handed over to the seller or dealer when the vehicle is handed over.
You can get Bundesbank checks from the Bundesbank, but also from some direct banks, for example from the DKB. Important: A fee is charged for issuing the Bundesbank check. At the DKB, for example, it is around 30 euros per Bundesbank check.
Because cash payments are not completely risk-free either (for example due to counterfeit money), some sellers offer payment by bank transfer.
The problem: You usually have to make a bank transfer in advance before the seller gives you the car. The payment method is therefore often used specifically in cases of fraud: As a car buyer, you never know whether you will actually get the car after the transfer and, if so, in what condition it is. Then it is difficult to get the transferred amount back. It is therefore better not to use a bank transfer as a payment method when buying a car.
Transfers are also possible via so-called cash transfer services. They are possible, for example, with Western Union, MoneyGram or similar providers.
A cash transfer is usually intended for sending money abroad to someone you know, such as family members or friends. The cash transfer is therefore generally not suitable for purchasing a vehicle. This payment method is often used by fraudsters.
In such a case, they pretend to be the seller and often demand the money from the buyer as security, often in the form of a down payment. In addition, they send evidence such as copies of ID cards to gain the buyer's trust. Caution is advised here. Because even such documents can easily be forged today.
If a seller asks you to make a payment using a cash transfer, you should refrain from buying.
PayPal has become a popular payment method that usually works fine when buying and selling items. However, the payment service is not suitable for buying or selling a car. When buying a car, you should therefore choose a different form of payment.
Because: PayPal itself explicitly excludes payment for vehicles with an engine. There is no protection for such payments for either the seller or the buyer.
Here, too, there are often fraud attempts on the part of buyers because payments via PayPal can also be withdrawn.
This is how the scam works: The scammers claim to the seller in advance that they can only pay for the car purchase via PayPal. After receiving the car, they claim to PayPal that they did not get the car and withdraw the payment. The seller has already sold the car, but can no longer get his money.
Payment with a mobile app: secure payments
With the “Safe Pay” app (formerly “Easy Car Pay”) you can send the money for your new used car to the seller via your smartphone. The app was specially developed so that buyers can pay easily and cashless when buying a car. Since the beginning of 2018, you can also use the service to buy boats, jewelry, horses or machines from a price of 100 euros.
This is how paying with the app works:
Buyers and sellers both have to install the app on their smartphone and register. You can download the app for free from the app store. The identity of each registered person is checked using an identification process via video on the smartphone or computer. The seller must also provide his bank details.
- The buyer or the seller then creates an individual payment offer for the used car. The other will automatically receive it by email.
- If both parties are in agreement, the buyer transfers the agreed amount to a reference account of the partner bank of SECURITY PAYMENT. You can do this via online transfer, Giropay or SEPA instant transfer. Once the money has been received, the seller receives a notification by SMS and email. Both can then meet to view or hand over the car. The price can still be adjusted until the purchase price is released.
- The buyer can then check the car on site and take a test drive. If he finally decides to buy, he requests a mobile TAN number (mTAN) from the app via smartphone or PC in order to pay for the used car.
- As long as the buyer has not entered the mTAN, the seller can still lower the price. This is possible, for example, during a price negotiation before the handover.
- Entering the mTAN triggers the payment of the specified amount to the seller. Both parties will receive an SMS and an email confirming the payment. Now the vehicle and papers are handed over. A service fee is also incurred with the payment confirmation. The fee usually depends on the amount of the sale price. If the car costs less than 1,000 euros, there is a fee of 10 euros. For cars up to 10,000 euros you have to pay 30 euros for the service. Up to a retail price of 40,000 euros it is 50 euros and for more expensive cars you pay 100 euros. You can decide yourself who pays the costs (buyer or seller) or you can share the costs (as of January 18, 2019).
Trustee service, shipping company & forwarding agency
For some car purchases, payment can be made through a shipping company (shipping company), a forwarding agency (transport company) or an escrow service. Escrow service is the legal term for an independent third party company that pays for both parties. The companies should first keep the money safe until the buyer has received the car. They should only pass the money on to the seller when it is handed over.
Fraud attempts are also common here: in many cases, the companies (for example the escrow service) to which the buyer is supposed to send the money do not even exist. This can even happen if the website and the email correspondence with the company appear very serious. Once the company has received the money, they cut off contact and the money is gone.
Reputable car portals and sellers therefore usually do not offer such a service. According to the “Safe Car Buying” initiative, the eBay Motors escrow service is an exception.
Suspected fraud: what to do?
There are a few ways to spot scammers. We have summarized important notes and information for you here on what to look out for when buying or selling a used car and what to do if you suspect fraud:
- Suspicious ad: An indication of a suspicious listing is a very low purchase price. You should also be suspicious if someone else calls the phone number than the one listed. In that case, it is best to contact the online car exchange directly or contact your automobile club, who can check the offer.
- Reference to the trust service, shipping company or forwarding agent: Reputable online exchanges do not offer such services. The eBay Motors trust service is an exception.
- Confirmation of the vehicle market: If you receive an email from the vehicle market confirming the legality of the vehicle and the seriousness of the seller, you should be suspicious. Because no Internet vehicle market offers confirmation of the data of its users. Break off contact with the seller and do not get involved in a purchase with him.
- Suspicious seller: If the seller only wants to communicate with you via email or if he cannot be reached on the given telephone number, this is suspicious. Even if he refuses you a test drive or asks you to pay a deposit, you should refrain from the offer. Then don't take any chances.
- Suspicious buyer: If a company offers you the mediation of a prospective buyer or asks you to submit your data, you should break off the contact immediately. Even if a buyer only wants to pay you money via PayPal, you'd better decline the offer.
- Money already transferred: If your money has already been debited from your account by bank transfer or using a cash transfer, you proceed as follows: Contact the online car exchange immediately so that they can remove the ad from the site. Then you should report it to the police immediately. You keep e-mails and other contact histories with the seller and forward them to the police.Automobile club members can usually seek legal advice who can advise them on what to do next.
Protect yourself from scammers!
Now you know how to make payment when buying a car safely. When buying or selling a car, it is best to pay with cash. Make sure that the handover takes place in daylight and in a busy location. It is best if the seller and buyer go to a bank together to withdraw the money there. So both are on the safe side.
If you suspect that the seller or buyer is a fraud, you shouldn't take any chances. Contact the car exchange or your automobile club and, if necessary, also call in the police.
We wish you good luck buying or selling your car and always a good trip! Your Allianz Direct
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