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Guide

How to pay for a used car safely

How you pay for a used car decides what help you get if something goes wrong. Paying a trader at least partly by credit card gives you Section 75 protection when the car costs between £100 and £30,000. A debit card may give you chargeback. A bank transfer or cash gives you the least protection if the car turns out to be faulty, so with a private seller the order matters most: do the checks first, pay last, and leave with the log book.

Published by CarCheckHQ · Updated . Written by the CarCheckHQ team.

Ways to pay, compared

Citizens Advice sets out what each way of paying means for you. In short:

  • Credit card. You get Section 75 protection for a car costing between £100 and £30,000, even if you paid only part of the price on the card. Citizens Advice gives the example of a £50 deposit on a credit card and the rest in cash: the claim can cover the whole price. Interest on credit cards is often higher than a finance deal, so clear the balance if you can.
  • Debit card. Your card provider may help through a chargeback scheme. Chargeback only covers the amount you paid on that card.
  • Bank transfer. Your bank has a limit on how much you can send to someone else's account in one go. A CHAPS payment can send more, but banks charge for it. Some private sellers won't want to give out their bank details.
  • Cash. No fees or interest, but no card protection if something goes wrong, and you may not feel safe carrying a large amount.
  • Finance arranged by the trader. It costs more because of interest, but you may be able to take action against the finance company as well as the trader if there's a problem later.
  • Finance you arrange yourself. Once the loan money is in your account, you can pay the seller by debit or credit card to get card protection. The finance company has no part in fixing problems with the car.

With hire purchase (HP), you don't own the car until the last payment is made, and it can be taken back if you can't keep up the payments.

Paying a private seller

With a private sale you're likely to pay by bank transfer or cash, the two ways with the least protection, so protect yourself in other ways:

  • Meet at the seller's home. Citizens Advice suggests this, so you have a record of their address if something goes wrong later.
  • Pay at the car, after the checks. Send the money when you're with the car, you've done the checks and you're ready to take the log book and keys.
  • Read your bank's warnings. The Payment Systems Regulator says to pay attention to them, starting with Confirmation of Payee, the check that the account name matches the person you mean to pay. If the name doesn't match, stop and ask why.
  • Check the name on the V5C. The V5C names the registered keeper. That isn't proof the seller owns the car, so if the names don't match, ask why before you pay.
  • Get a receipt. Write down the date, the price, both names and addresses, the registration and the mileage, and both sign it. Keep your bank record of the payment too.

Do things in this order

  1. Before you travel: check that the details you've been given match the vehicle record on GOV.UK, check the MOT history, and check whether the car has been recalled.
  2. At the viewing: check the V5C log book has a "DVL" watermark and that its serial number isn't in the stolen ranges GOV.UK lists. Check that the VIN and engine number match the log book.
  3. Before you agree a price: check for outstanding finance. If the seller says they'll clear it, read what to do when the seller says they'll clear the finance before you send anything.
  4. When you pay: pay the agreed amount to the person whose name you've checked, and get a signed receipt.
  5. Before you drive away: take the original V5C (not a photocopy), the green "new keeper" slip, the keys and the MOT document. The seller should register the car to you online or by post.
  6. Before you drive: make sure you're insured, then tax the car straight away. Tax doesn't move across from the seller.

The full set of checks, from booking a viewing to the drive home, is in our used-car buying checklist.

When to stop and walk away

Don't pay if any of these happen. You can always stop the deal, even late on.

  • The seller can't show you the V5C. DVLA advises that you shouldn't buy a vehicle without one.
  • The V5C serial number is in one of the stolen ranges GOV.UK lists. GOV.UK says to call the police as soon as it's safe to.
  • The details on the log book don't match the DVLA record. Citizens Advice says to report the seller to the police.
  • Your bank warns you the account name doesn't match, or the seller asks you to pay someone else.
  • You feel pressured to pay more, pay quickly or pay before you've seen the car.

If something goes wrong after you pay

  • You paid by card. Contact the trader first. If they won't help, ask your card provider for a Section 75 claim (credit card) or a chargeback (debit card), in writing. If you're unhappy with the outcome, the Financial Ombudsman Service may be able to look at it.
  • You were tricked into a bank transfer. Contact your bank straight away. The Payment Systems Regulator's reimbursement rules cover fraud sent by Faster Payments or CHAPS between UK accounts. They don't cover a dispute with a genuine seller about a faulty car. You can also report fraud to Action Fraud, the police's national fraud reporting centre.
  • The car has a fault you weren't told about. You may still have legal rights, even if you didn't do every check. From a trader, that can mean a repair, a replacement or some of your money back. From a private seller your rights are narrower: the car must be as described, roadworthy and theirs to sell. Citizens Advice can tell you what applies to your purchase: call its consumer helpline on 0808 223 1133.

Common questions

Can I pay for a used car with a credit card?

Yes, if the seller takes card payments, which most often means a trader. If the car costs between £100 and £30,000, paying even part of it by credit card gives you Section 75 protection, so the card provider can be liable along with the trader if something goes wrong.

Does Section 75 cover a private sale?

Rarely. Section 75 needs you to pay the seller directly by credit card, and most private sellers don't take cards. Citizens Advice says you can't usually use Section 75 if you paid through a third party, such as a marketplace or a PayPal balance. Ask your card provider before you pay if you're not sure.

Is a bank transfer safe for buying a car?

It's a normal way to pay a private seller, but it has the least protection if the car turns out to be faulty. Pay only when you're with the car, after the checks, and act on any warning from your bank that the account name doesn't match.

Should I pay a deposit before I see the car?

We'd advise against it. Until you've seen the car, the V5C and the seller, you can't check that the car exists or that the person you're paying can sell it.

Is it safe to pay cash for a used car?

Cash has no fees, but there's no card protection, and you may not feel safe carrying a large amount. If you pay cash, count it out with the seller, get a signed receipt and take the V5C and keys at the same time.

When should I hand over the money?

Last. Do the checks, agree the price, then pay and take the V5C, the green new keeper slip, the keys and the MOT document together.

What this guide can't tell you

This is general information for buyers in the UK, not legal or financial advice. The Citizens Advice pages we quote are written for England, and the rules can differ in Scotland, Wales and Northern Ireland.

Card protection, bank limits, CHAPS charges and fraud reimbursement depend on your bank or card provider and its terms, so ask them before a large payment. Section 75 and chargeback claims can be refused. Nothing on this page, or in a CarCheckHQ report, can confirm who owns a car or that a seller is genuine. For finance on the car, see how to check a car for outstanding finance.

Sources

Contains public sector information licensed under the Open Government Licence v3.0. CarCheckHQ is independent and isn't linked to DVLA, the police or any bank.