Cars For Cash
We have all seen the adverts, either in the local newspaper, or billboards driving past garages or local scrap yards. It is the type of marketing language that gets results, from those needing to sell their vehicle quickly, without the hassle of tyre kickers, dreamers and time wasters.
Of course these are businesses and will pay less that a private buyer. But there are benefits, or quick payment, no comeback (as traders cannot complain about any car they have bought, when transaction is completed, even if further faults are found) and quick disposal helps with insurance, road tax and other legal obligations.
However, the term “Cash For Cars” is not a technically true statement as there are legal restriction to businesses paying hard cash for a vehicle.
Cash For End Of Life Vehicles
Scrap yards and breaker yards who buy End Of Life Vehicles for the purpose of scrapping or stripping down for parts are not legally allowed to pay hard cash for a vehicle. Transactions must follow a bank transfer or something similar, so there is a recorded transaction that can be followed. This as put in place to suppress car crime, vehicles stolen then crushed and other similar illegal activity.
Cash For High End Vehicles
Dealers that buy vehicles for stock also have legal limits to ho much they can pay in cash, before bank transfers need to take place. This comes under “EU Money Laundering Regulation”. Any business that is deemed to be a “high value dealer”, has to register with HMRC and follow their regulations to transactions over the amount of 10,000 euros, or the local currency equivalent. Most UK dealers, use £8000 as their benchmark.
It is also true, that many dealers do not like to have high levels of cash lying around their premises, so the option of being paid in cash for any vehicle is low. It also gives them time, to check if there is any finance outstanding on the vehicle, or any irregularities, before payment is made.
“We Buy Cars” Type Businesses
We all know the UK brands who advertise on TV to buy your car quickly and easily, allowing you to be in a stronger position to buy another one somewhere else, without a trade in. This TV advertising avoids the use of the word “cash” and are more likely to use other terminology as “good price” or “better price”. These National outfits, only pay for vehicles through a bank transfer service, some of these add an admin charge for the process.
Buying and Selling Cars Privately
There are no rules to using cash when buying and selling cars on a private basis. This is where members of the public are open to con men on both sides as a buyer or a seller. Many selling see cash as the only safe form of payment, those buying often do not want to transfer funds without the goods. And even in possession of the bought car, does not mean everything is as it seems.
Sites such as Ebay, with paypal payment options can act as a middleman. If it turns out the vehicle is not as described, there is some sort of comeback.
UK Scrappage Scheme
Major manufacturers no and again offer cash for an old car as part of a a scrappage scheme to remove older vehicles from the road and promote the sale of newer vehicles. In reality, this payment is a discount off the new car price. Using the term "cash" rather than discount, is sometimes seen as a more aggressive form of marketing that can get a better return.
Summary To Cash Payments
The term “cash” is often used as marketing language within the motor industry, but strict regulations prevent many hard cash transactions taking place and in reality most will be done via a banking process. .