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VW Golf - payment in advance for 2nd hand car - lucklesspedestrian

We are due to travel down from Scotland to Yorkshire on Wednesday to collect a 2nd hand golf from a fairly large non franchised dealer. We haven't seen the car, just a video and have paid a £500 deposit. The dealer is asking for payment of balance 24h in advance of collection (£15K).

We've bought a few cars over the years and always just handed our credit card over to pay on the day of collection with no problems. I feel a little uneasy paying the full whack before I've even physically seen the car.

Any thoughts? Is this common practice?

VW Golf - payment in advance for 2nd hand car - focussed
I wouldn't do it - why should they need payment in advance?
What are they trying to hide would be my reaction.

However if you go ahead:-

Providing that you pay with a UK credit card - not a debit card - you can always do a section 75 on the seller if the car is a lemon.

www.experian.co.uk/consumer/credit-cards/guides/se...l

The last car I bought in the UK I paid for with a debit card - having paid the deposit on my credit card the franchised dealer refunded that deposit and I had to pay the whole amount on the debit card, presumably to avoid the section 75 loophole.
I wasn't too happy about that having flown over from france to pick the car up.

But it was a prereg Honda so low risk.
VW Golf - payment in advance for 2nd hand car - mcb100
The dealer wants to know the money is in their bank before you drive away in the car. There are lots of credit card scams in circulation.
As a reassurance, you’re covered under distance selling regulations which mean you can reject the car within the first 14 days for any reason.

www.themotorombudsman.org/distance-sales-faqs
VW Golf - payment in advance for 2nd hand car - sammy1

I would NOT do it. Dealer could go bust over night and I lot of what appears to be owned by a dealer and on their forecourt is often not the case. Paying by debit card should not be a problem. Also have you considered the consequences should you require and warranty work on the car

VW Golf - payment in advance for 2nd hand car - SLO76
Never had to do this with any car I’ve bought. All the dealer needs is cleared funds before the car leaves, so a credit or debit card is absolutely fine. It may be their policy but it may be a way to make things more difficult to walk away if you turn up and the car isn’t right. I’d call and explain that you don’t want to pay the balance until you’ve seen the car in the metal, a card transaction will clear instantly and they can easily check the money is in their bank.
VW Golf - payment in advance for 2nd hand car - pd
Never had to do this with any car I’ve bought. All the dealer needs is cleared funds before the car leaves, so a credit or debit card is absolutely fine. It may be their policy but it may be a way to make things more difficult to walk away if you turn up and the car isn’t right. I’d call and explain that you don’t want to pay the balance until you’ve seen the car in the metal, a card transaction will clear instantly and they can easily check the money is in their bank.

Money won't be in their bank from a card transaction. They'll have a card authorisation number but that's all.

I can sort of understand a dealer reluctant to take £15000 on a card. Firstly it will cost them and secondly there is a fraud risk (small, but there).

Proving your bank reliably makes faster payments for £15000 then a bank transfer whilst you are there is the best bet. That way dealer can be confident payment has been made as it will be in their account and you will have seen the car.

VW Golf - payment in advance for 2nd hand car - mcb100
Pay on site and it’s no longer a distance sale. Pay in advance and you can reject it there and then, complete with a no-quibble refund of your deposit.
Swings and roundabouts.
VW Golf - payment in advance for 2nd hand car - SLO76
Pay on site and it’s no longer a distance sale. Pay in advance and you can reject it there and then, complete with a no-quibble refund of your deposit. Swings and roundabouts.

Legally correct and enforceable on a legitimate dealer with assets, however many small dealers run minimal asset limited firms which they bust rather than pay out any refunds. I’m not saying this is the case here but it’s a common trick used by dodgy dealers. Easy enough to check the firms financial status with companies house.
VW Golf - payment in advance for 2nd hand car - SLO76
“ Money won't be in their bank from a card transaction. They'll have a card authorisation number but that's all.”

Actually, you’re right, it does take time to arrive, I’m thinking of a transfer not card payment. I certainly never had any issues with any car purchase before using a card, maybe they have. If it’s a problem you could just do a bank transfer on pick up. That was my preferred means of accepting payment when I was trading (I didn’t don’t have a card reader) which I could then check to see the funds were clear. I then transferred it into a secondary account incase of some sneaky trickery that had the money swiped back again. If they won’t take a transfer on arrival I’d be wary unless a convincing reason was given.
VW Golf - payment in advance for 2nd hand car - Andrew-T

<< Proving your bank reliably makes faster payments for £15000 then a bank transfer whilst you are there is the best bet. That way dealer can be confident payment has been made as it will be in their account and you will have seen the car. >>

You will need to have an arrangement on your account to permit payments of that size. Some accounts only allow £1K per day - that could take a while !

VW Golf - payment in advance for 2nd hand car - Miniman777

No, No, No, No.

Since 2018, I've bought one new and one used car. Paid £40K on a debit card for the used one (funds are ring fenced immediately by the transaction) and wife paid £30k for the new one - both at BMW/Mini franchises. Back in 2015 I bought another car with a debit card. I dont see a problem.

As some says, dealer could go bust, may have a cashflow problem or it's not unheard of for the salesman to be creaming a few K off the top or something equally dodgy.

Paying on the day after you've inspected the car is the best option, as paying in advance removes any leverage for negotiation if you find something amiss.

If that is their terms of business, personally, find another car.

Edited by Miniman777 on 03/04/2023 at 15:27

VW Golf - payment in advance for 2nd hand car - gordonbennet

I've been at the other side of this, one of several car transporter drivers pulling up at a dealer at 8am ready to take away the entire stock of cars once the Receiver has sorted out which are going where.

Normal people like us hearing about the sudden failure arriving during the morning, some angry some in tears, having only the day or two before paid serious money in large deposits, don't know the legality if people had paid in full, an unpleasant but thankfully rare side of my previous work.

I too wouldn't be paying until i had the car in my grasp there and then, you don't know these people from a bar of soap.

VW Golf - payment in advance for 2nd hand car - pd

I can understand a dealer's reluctance to take a credit card as the charges will eat into the margin.

A debit card costs more than it used to percentage wise - often about 0.25% - so the cost on a £15k is going to be just under £40. Probably not something the dealer wants but equally not the end of the world.

A lot of people don't realise it can take 2-3 days for the retailer to actually receive the money but even so a debit card is fairly secure as long as a PIN is used.

VW Golf - payment in advance for 2nd hand car - Adampr

If the dealer is asking for a credit card payment in advance, I wouldn't be too concerned. if they go bust, even if there is no car, you are protected up to £30k. If they're asking for a bank transfer, I wouldn't agree to that.

I'm not sure why they would want the money up front but perhaps they're sick of scammers and non-payers. Equally, the car might be a dog or they might be trying to get you on the hook. In these matters, I try not to concern myself too much with the why of the issue and rather concentrate on the risk to me. As I said, pay by credit card and there is (in any practical terms) no risk.

VW Golf - payment in advance for 2nd hand car - lucklesspedestrian

On this occassion we will be paying by bank transfer using our mobile banking app linked to our current account.

Checked with our bank and they say that transfer of funds shound be immediate.

I'm confident enough to be able to check the car out to ensure it's as advertised and the dealers itself has £1.5 million worth of assets according to this years accounts and 10 years worth of good online reviews, which seem legit.

I'll pay on the day, they get the money there and then at no additional cost, I get to check out the car...win win!

VW Golf - payment in advance for 2nd hand car - Bilboman

I remember reading advice from HJ years ago regarding an instant cash in hand payment (sort of), which should work well for both parties. IIRC, the buyer withdraws the amount in cash from their bank and immediately pays it into the seller's account as a cash payment in their presence, which should obviously be cleared with no possibility of cancellation. Ideally, seller and buyer have an account at the same bank.
I imagine it's all but impossible to do this nowadays as banks hardly hold any cash on their premises!

VW Golf - payment in advance for 2nd hand car - veloceman
Retailers are now not allowed to charge for fees for credit card transactions so they usually have a max transaction value of £1k.
Also if anyone has ever tried to claim for losses via their credit card it’s a long and drawn out process.
Pay the deposit on a CC then the balance after you seen the car.
VW Golf - payment in advance for 2nd hand car - sammy1

I remember reading advice from HJ years ago regarding an instant cash in hand payment (sort of), which should work well for both parties. IIRC, the buyer withdraws the amount in cash from their bank and immediately pays it into the seller's account as a cash payment in their presence, which should obviously be cleared with no possibility of cancellation. Ideally, seller and buyer have an account at the same bank.
I imagine it's all but impossible to do this nowadays as banks hardly hold any cash on their premises!

Yes this used to be quite common. To get any tidy cash some out of a bank today is torture for the account holder. They even want your inside leg measurement!

VW Golf - payment in advance for 2nd hand car - Andrew-T

I imagine it's all but impossible to do this nowadays as banks hardly hold any cash on their premises!

And most banks have fewer and fewer premises. This town had four when we moved here in 2006 - the last one closed last summer.

It's 15 years since I paid more than about £1500 for a car. Until a few years ago it was always a bundle of notes, but the most recent sale and purchase have both been bank transfer.

VW Golf - payment in advance for 2nd hand car - catsdad

My son paid the £14.5k balance for his Mazda 6 on Saturday at a main dealer using his phone banking app. For some reason the salesman was very surprised both that he did this and that it worked.

I can’t see why it should be so unusual but apparently it is.

Anyway, back on thread, good luck with the buying process on Weds.

VW Golf - payment in advance for 2nd hand car - _

When I bought the Korando I aid the balace of £19000 is by debit card, having prewarned my bank for security reasons.

Zero problems.

Another dealer, with who I had paid a deposit over the phone refunded the deposit the same day as I had changed my mind.

Edited by _ORB_ on 04/04/2023 at 09:59

VW Golf - payment in advance for 2nd hand car - Big John

With my last two Skoda Superbs and my son's Octavia we paid a deposit using a credit card and the balance with a debit card. On the first Superb(in 2005) I informed my bank but with the second (in 2015) they said that wasn't necessary anymore . Using the debit card was very straightforward and leaving the deposit via credit card left me with section 75 cover for the full amount - not just the deposit.

VW Golf - payment in advance for 2nd hand car - Solus987

Paid for my civic in this manner with the main dealer.