Selling–or buying–a car from a stranger may be nerve wracking for both the seller and the buyer. When you don’t know someone there is a lot of risk involved on both ends. So what is the best and safest way to exchange funds during a private car sale?
Here’s how you can exchange money during a private sale.
How can I exchange money during a private car sale?
There are six main ways that you can exchange money during a private sale. Some are faster than others, but others are safer (even if they take much longer).
Cash
Cash is king, as they say. On one hand cash is a very safe way to exchange money. The seller is guaranteed to get the full amount and there is no need to get another entity involved. But carrying around a fistful of cash can pose an inherent risk.
Top Tip: If you want to exchange funds using cash, bring a friend or loved one along for added protection and consider meeting at a public spot such as a park.
Digital Platform
Nowadays more and more people prefer using digital payment platforms such as Venmo, PayPal, or ApplePay. These platforms have great benefits, as they are quick and secure. Because of this there is little risk of fraud. But the downside is that there are often transfer fees and there can be limits to how much you transfer.
Top Tip: If you want to exchange funds using a digital payment platform, determine what fees you will be responsible for and whether or not there is a transfer limit.
Certified Check
A certified check is a personal check that is verified by a bank to ensure that sufficient funds are in the account. When a check is certified those funds are frozen and allocated to that specific check. This guarantees that the check will cover the price of the car. Some banks treat these checks as cash more or less, so the funds may be immediately available once you cash the check. But other banks have a delay in this process which means that the money may not be available immediately. Fraud is still possible even with a certified check, as the certification itself may be forged.
Top Tip: If you want to exchange funds using a certified check, meet at the buyer’s bank to make the exchange. If the buyer wants to use a personal check, insist that they certify it first. These measures will reduce the risk of fraud.
Cashier’s Check
A cashier’s check is similar to a certified check but the funds will come directly from the bank. A buyer will essentially buy a cashier’s check from a bank. There isn’t the risk of inadequate funds, but as with any type of check there is the potential for fraud. An unscrupulous buyer could simply forge the check.
Top Tip: If you want to exchange funds using a cashier’s check, meet at the buyer’s bank to make the exchange (just like with the certified check). This will reduce the risk of fraud.
Bank Transfer
Another option for exchanging money is to do a bank transfer of the funds. You will not need to worry about checks or certification, the funds will simply move from one account to the other. This is much safer than using a check, but the downside is that it can take up to 24 hours to make the transfer.
Top Tip: If you want to exchange funds using a bank transfer, double and triple check that all of the banking information is correct on both ends.
Escrow
A less used option for transferring money in a private car sale is to put the funds in escrow. When we think of escrow we typically think of buying a home, but the same idea can be applied to buying a car. An escrow service is a third party who holds the funds until the vehicle transfer is complete. This protects both parties as it ensures that the transaction is complete before releasing money and releasing the title. There is a paper trail which makes it even more secure for both parties. But the downside is that this can take some time to complete and comes with an added fee, typically around 2%.
Top Tip: If you want to exchange funds using an escrow service, do your research to find a reputable company that charges a fair fee. Make sure that the other party signs off on the company as well.
How can I safely buy a car from a private seller?
Buying a car from a private seller can be daunting. After all, you are the one with the money, and they are the one with the car you don’t really know that much about. But there are steps you can take to help protect yourself when you are buying.
Do your research. You should not only do your research on the make and model in general, but also on the VIN number. Ask if the seller will pay for a CARFAX report to be sure that the car hasn’t had any major damage and that there aren’t any recalls out on the car.
Ask for maintenance records. If the seller has any maintenance records that they can share that will help you be sure that the car has been properly maintained.
Have the car inspected by a mechanic. If you want to be extra sure that the car is in great shape, have it inspected by a mechanic before you complete the sale.
How can I safely sell a car to a private buyer?
There are risks when looking to sell your car as well. You don’t want to end up with no car and no money, which can happen if you get duped by a scammer. But again, there are steps you can take to help protect yourself.
Avoid checks if possible. Checks have a high likelihood of being fraudulent, so you are better off with one of the other payment methods we outlined above.
Walk away if something feels wrong. After all of that work to advertise and sell your car you are probably anxious to have it all be over. But if something feels wrong, it most likely is. Don’t be afraid to walk away if you get a bad feeling about the buyer–or the circumstances.
That’s how you can safely exchange money during a private car sale.
Selling and buying a car privately are inherently riskier than selling or buying a car from a dealer. But being smart and doing your research can help protect you, whether you are the seller or the buyer.
If you are overpaying every month on your car payments, Auto Approve can help! Contact us today to find out how much you can save!
Car Accessories and Modifications You Might Be Shocked are Illegal
Did you know that there are many common illegal car modifications and accessories? It’s true. There are things you see on the road every day that could get you pulled over, or even stuck with a fine, depending on the state. You may even have some of these on your own vehicle!Some of these car mods and accessories are illegal on a technicality because of an arcane law. Others because lawmakers were looking to solve a problem and something harmless got accidentally caught up in the sweep due to vague language. However, some of these items are real safety hazards – and whether or not they’re dangerous, any of these could be used by law enforcement for a pretext stop if you find yourself in the wrong place at the wrong time. And if it happens over and over? That could have you taking another look at your finances fast.Let’s take a look.Please note that this blog should not be construed as providing legal advice. Information is shared for entertainment purposes only.Surprising Illegal Car Accessories and ModificationsWhether or not these items are illegal for you may depend on your location and vehicle. Some states – like California, Illinois, Pennsylvania, Texas, and New York, among others – are known for having stricter road laws, so if you’re thinking about making a modification or sticking an accessory on your vehicle, you may want to look up your local laws.And if you’re considering road tripping between states in your personal vehicle, you’ll want to check anywhere you plan to drive through to avoid risking an unnecessary ticket or fine. Some places are so strict, you might find yourself asking, is it worth having a car in the city?1. UnderglowTechnically, in several states, any added light on your vehicle could be considered a problem, including underglow lights. In a practical sense, most of these laws were designed to ban any lights that could look like the flashing lights of emergency services (especially imitating police cars). However, depending on the state, the language of the rule may be broad enough that underglow, even underglow that only turns on when the vehicle is stopped, could be grounds for a traffic stop. In New York, for example, underglow lights are legal only in the color white and only if they don’t flash, oscillate, or otherwise move.2. Tinted windowsWindow tint standards vary by state. While tinting of the front windshield is almost never allowed, what;s allowed when it comes to tinting your front and rear side windows and back window vary widely by state, and some states regulate what color the tint can be and whether or not the tint can be reflective. The amount of tint allowed may also depend on the kind of vehicle (for example, in some states SUVs are allowed more tint than sedans), and whether or not rear window tinting is allowed can depend on your vehicle having two exterior rear view mirrors.All that said, the upshot here is that while tinting itself isn’t illegal, tinting your windows too dark is, and what exactly is considered too dark can depend on where you are. Since tint isn’t something you can easily add and remove, if you drive between states on a regular basis for any reason, it’s well worth making sure any vehicle window tinting you get done matches the strictest regulations you might have to drive under.3. Air fresheners and other rearview mirror accessoriesDid you know that hanging anything off your rearview mirror – like a rosary, an air freshener, fuzzy dice – could get you pulled over?Technically, any “objects near windows” can fall under laws designed to ban anything that could obstruct the driver’s view. And it’s true that, depending on the size and mobility of what you hang from your mirror, there is a chance it could obstruct your view of, say, a pedestrian in the middle of the street and cause a collision.While it’d be unusual for an air freshener to result in a manhunt, if you're pulled over for any reason and the officer decides that whatever you’ve got festooned on your mirror could impede your view of the road, that officer could fine you. Hydraulics, lifts, and lowridersIn many states, there are laws on the books about how high or low a vehicle can be relative to the road, and rules for height-adjusting hydraulics. In fact, height adjustable suspension was banned in the US entirely from 1974 until 1981. Many of these rules were originally instituted to discourage once-vilified lowriders (which California loosened restrictions on just last year). Safety-wise, there is some argument for these regulations. Lights have to be between a minimum and maximum height for safe highway driving, and a vehicle that’s too low to the ground or too lifted can potentially pose a threat to passengers and others. And as for adjustable suspensions, the argument against them is that adjustment while in motion can be dangerous because of the risk of something going wrong. Some states, like New York, still ban hydraulics that adjust suspension while the vehicle is in motion at all, while others don’t allow it above a certain speed (usually 15 miles per hour). The kicker is, some vehicle stock models come with automatic hydraulics that could potentially violate those rules, like the Land Rover's intelligent suspension control system – but you’re unlikely to get pulled over for a built-in feature of your vehicle.No matter the make and model, Auto Approve can help you save on your auto loan.Accessorizing your car with a better rate isn’t just legal – it’s a great way to put more money in your pocket to spend on the things that matter most to you.Get your free quoteLicense plate accessoriesThis is a simpler one, but it still might surprise you, since versions of it are so common. Most license plate covers and other accessories are illegal, even theft protection covers. The most surprising one? Even license plate frames are only OK under very strict guidelines – nothing too thick or with decor that juts out over the license. In short, you should avoid anything that could potentially block or obscure the view of your license plate under any circumstances.Loud exhaustThese modifications seem to be everywhere – especially when I’m trying to think! – but yes, they’re against the law in many jurisdictions. Vehicles come with a muffler made to limit exhaust noise, and removing that muffler will cause the exhaust to make a big, disruptive noise whenever you drive.In Massachusetts, just about anything but the stock (original) exhaust can get you a ticket and cause your vehicle to fail its annual inspection. Even states that are typically less strict about car accessories and modifications, like Indiana, have laws requiring a muffler or “other noise dissipative device” in good working order and in use constantly. In California, the law allows up to 95 decibels of noise from exhaust. These rules are generally in place not because a loud exhaust is so dangerous but because the noise is so disruptive to the community. That said, a loud enough noise could disrupt or surprise another driver or pedestrian enough to cause an issue!Too-bright headlightsYou know how annoying it is when you’re driving at night and someone comes around the bend with LED lights that seem too bright? Well, you’re not alone and you’re not crazy – many new LED bulbs are brighter, and some may well be breaking the law. The more standard halogen headlights tend to clock in between 1,000 and 1,500 lumens, while some LED bulbs reach 3,000 to 4,000 lumens (or candelas, which are different in the grand scheme of things, but interchangeable for the purposes of headlights). The legal range for headlight is between 500 and 3,000 lumens, according to PolicyGenius. That means, if you’re thinking about swapping out your headlights for LEDs, you need to make sure the new lights fall within the limits and are DOT approved. It’s important, not just to avoid a ticket, but for your safety!Window stickers & decalsLast but not least, you might be shocked to learn that technically, stickers and decals on vehicle windows – common as they are – walk the line of legality. Depending on where you are in the United States, as with so many of these, the standards shift for where and whether stickers and decals are allowed, and what’s considered too much. The primary considerations when thinking about whether or not your stickers or decals could cross the line and land you in hot water are: does this make me look like a police car or other official vehicle? Could this be distracting to other drivers? And, could this (or these) obstruct my view?As with underglow, nothing that could possibly cause you to be confused with an emergency vehicle is allowed, and as with window tints and mirror accessories, standards for minimum visibility vary widely from state to state, but your best bet is not to put too many stickers and decals up, even on the rear window of your vehicle.And when it comes to bumper stickers, as long as they’re not blocking your view, they’re mostly allowed everywhere… but some states, like Tennessee put restrictions on obscene bumper stickers. So if you happen to be thinking about heading to Nashville with some filthy bumper stickers and a dream, you might want to think again.And those are all the most surprising car modifications and accessories that break state lawsDo you have any of these? Are you thinking twice about getting them now? Now that you’re armed with this information, you can make a decision based on what makes the most sense for you, your vehicle, and your state.One thing that makes sense for everyone? Saving money on your vehicle loan. GET YOUR FREE QUOTE FROM AUTO APPROVE TODAY
5 Tips to Start Your Finances Off Right in 2025
As 2024 winds down, it’s time to start thinking about the right financial moves to make in 2025. The beginning of a new year is a great time to take a look at your finances and consider ways to set yourself up for the year to come. While everyone else is making resolutions, why not make more practical commitments to taking care of your financial health? Whether that means cutting costs, spending more wisely, or saving for the future, there are tons of opportunities available to you to make this your healthiest financial year yet.In this article, you’ll find 5 top tips for keeping your finances in tip-top shape. Let’s take a look.5 Ways to Keep Your Finances In Order This Year1. Do a Subscription CheckAs more and more companies move to subscription- and as-a-service-based models, it’s becoming harder to keep track of those sneaky recurring charges. Many services even rely on that fact! Research suggests that forgotten and unintentional subscriptions raise different subscription-based companies’ profits by between 14 and 200 percent.With that in mind, now is a great time to take a closer look at what you’ve signed up for and any forgotten free trials that might now be charging you. There are a few ways to do an inventory of your subscription fees. You can sign up for a service like Rocket Money, which can quickly review all of your accounts, or check for yourself. Many banking apps now have features that will gather your recurring charges for you to review.These little charges can add up over time, so it’s worth considering your subscriptions to decide what you really want and need and make sure you’re not unwittingly paying for something you’re not using or never intended to sign up for.2. Get To Know Your CoverageWhile insurance documents – from health to home – might not be the most thrilling reading material, it’s important to know what is and isn’t covered and how much you’re paying for your various plans. By diving into the details, you can make sure the coverage you have is still right for you. You may even discover you can get a better rate by making small changes, like adding safety features to your vehicle. You may want to change providers or shop around for better rates if something’s not working. Plus, a better knowledge of how your coverage works can help you avoid unexpected bills and get the most out of any plans you’re paying for. 3. Price Compare to Avoid Overpaying There are two key factors at play that make this something you should do periodically if you want more money in your pocket. This first is broad trends in interest rates, inflation, and pricing. If you were locked into a high interest rate on a loan or a high price on a service a year or two ago, you may be able to refinance, renegotiate, or change providers now to save money.The second factor is that many companies have built in price raises that mean the price you started at – for cable or your phone, for example – might have been a good price, but your current monthly fees may be much higher. This is another scenario where you may be able to lower your costs by changing providers or renegotiating with your current company. Some services also offer discounts to members of certain organizations that could give you the opportunity to pay less. Spending a little time making sure you’re getting the best price available to you for the service you want can save you a lot of money in the long run.If you want to know if you’re overpaying on your auto loan, you can get a free quote from Auto Approve right now and discover better rates available to you.4. Take a Long-term ViewNow is a great time to consider your finances in the long-term. Are you planning for retirement? Do you have an emergency fund? Is your will up to date? How about any life insurance or disability coverage?Setting yourself up for this coming year really means setting yourself up for the foreseeable future, and surveys show many Americans are not financially prepared for the financial realities of getting older.If you haven’t started yet, now is a great time to start a savings plan and work on creating a more financially stable future for yourself. Even on a tight budget, putting a small amount aside each month can make a difference.And, if you’ve already begun setting yourself up, it’s a good time to review your asset allocation to make sure you’re getting the most out of your contributions and take a few minutes to check all your paperwork is in order in case anything should happen. And make sure you have the right professional guidance to keep things in order and on track.5. Create a PlanThe last and most important thing you can do to have a financially fulfilling year is to take a look at your budget – or create a budget, if you don’t already have one – and make sure it aligns with your goals.Your plan for the year could include saving for a vacation you want to take, putting more money aside for retirement, or consolidating debt to get a better rate and simplify payments. Whatever your unique financial challenges and opportunities may be, take a look at the big picture of your finances and put together a plan. It’s the best way to make sure you’re financially better off at the end of 2025 than how you started it.And Those Are Your Top 5 Tips for Better Finances in 2025Ready to meet your financial goals? Put these tips to work today and you’ll be cutting unnecessary costs in no time. More money in your pocket means more money for the things that matter, whether that’s saving for the future or making meaningful purchases this year.And don’t forget – to avoid overpaying on your auto loan, get a free quote now and see how much you can save with Auto Approve.
Auto Refinancing and Your Taxes: What You Should Know
Are you considering auto refinancing? It's a wise move that can potentially save you money on your car loan. However, before you proceed, it's important to understand how auto refinancing works and how it can impact your taxes. In this article, we'll break down the basics of auto refinancing, discuss the tax implications, and provide tips for navigating tax season after refinancing. We'll also address common questions about deducting auto loan interest and the effects of refinancing on your credit score. So let's dive in and explore the world of auto refinancing and taxes.Understanding Auto RefinancingThe Basics of Auto RefinancingAuto refinancing can be a beneficial financial move for many car owners. By refinancing your auto loan, you have the opportunity to secure better terms, such as a lower interest rate, extended loan term, or reduced monthly payments. This can result in significant savings over the life of the loan and provide you with more financial flexibility.One key advantage of auto refinancing is the potential to lower your monthly payments. If your credit score has improved since you initially took out your car loan, you may now qualify for a lower interest rate, which could lead to substantial savings each month. Additionally, if you're facing financial difficulties and need to reduce your monthly expenses, refinancing to extend the loan term can help lower your payments, albeit potentially costing you more in interest over time.How Auto Refinancing WorksWhen you decide to refinance your car loan, the new lender will pay off your existing loan in full and create a new loan agreement with revised terms. This process is akin to applying for a new car loan, as you will need to submit documentation such as proof of income, insurance, and vehicle details. The new lender will evaluate your application, and if approved, they will issue a payoff check to your previous lender to close out the old loan.It's important to note that auto refinancing typically incurs fees, such as loan origination fees, title transfer fees, and state re-registration fees. Before proceeding with refinancing, it's crucial to calculate whether the potential savings from the new loan terms outweigh these fees and any additional interest costs. Additionally, consider the impact of extending your loan term on the total interest paid over the life of the loan, as stretching out the repayment period can result in paying more in interest, even with a lower monthly payment.The Impact of Auto Refinancing on Your TaxesAuto Refinancing and DeductionsWhile auto loan interest can be tax-deductible in certain cases, it's important to note that refinancing doesn't automatically change the deductibility of your interest. The IRS considers auto loan interest as personal interest rather than mortgage interest, which means it's generally not deductible. However, if you use your refinanced loan proceeds to improve your vehicle, such as adding safety features, you may be eligible for a deduction under the medical expense or casualty loss categories. Remember to consult a tax professional for advice specific to your situation.Tax Implications of Interest RatesWhen refinancing, it's common to aim for a lower interest rate. While this can reduce your monthly payments and save you money over time, it can also impact your taxes. A lower interest rate means less interest paid, which in turn reduces the potential tax deduction you can claim. On the other hand, a higher interest rate may result in more deductible interest. Keep these factors in mind and consider consulting a tax advisor to understand the impact of interest rates on your tax situation.Consideration of Loan Term ExtensionAnother factor to take into account when refinancing your auto loan is the potential extension of the loan term. While extending the term can lower your monthly payments, it can also affect your tax situation. A longer loan term means more interest paid over the life of the loan, which could potentially increase your tax-deductible amount. However, it's essential to weigh this against the overall cost of the loan and the impact on your financial goals.Additionally, a longer loan term may impact your vehicle's depreciation value, which can have implications for your taxes if you use your vehicle for business purposes. Be sure to keep detailed records of your vehicle's usage to accurately determine any tax deductions you may be eligible for based on the depreciation of your vehicle.Preparing for Tax Season After Auto RefinancingNecessary Documentation for Tax FilingAfter refinancing, you'll need to gather the necessary documents for filing your taxes accurately. Some important documents to keep on hand include your refinanced loan agreement, Form 1098 (if you receive one from your lender), and any documentation related to deductible expenses or improvements made to your vehicle. Keeping your paperwork organized will make the tax filing process smoother and help you avoid potential mistakes or omissions.It's also advisable to retain records of any correspondence with your lender regarding the refinancing process. This can include emails, letters, or notes from phone calls, as they may contain important details that could be relevant for your tax filing. Additionally, if you made any payments related to the refinancing, such as appraisal fees or credit report charges, keep those receipts handy as they may be tax-deductible.Common Tax Mistakes to Avoid After RefinancingWhen it comes to tax season, it's crucial to avoid common mistakes that could result in penalties or delays. One common error is failing to report changes in interest paid due to refinancing. Make sure to update the relevant tax forms with the accurate interest amounts. Additionally, if you claimed a deduction for an improvement made with loan proceeds, be prepared to provide supporting documentation in case of an audit. Double-check your tax return before submitting it or seek professional help to ensure accuracy and compliance.Another mistake to steer clear of is forgetting to account for any potential tax implications of cash-out refinancing. If you received cash back as part of the refinancing deal, this amount may be subject to taxation depending on how it was used. Consult with a tax professional to understand the tax consequences of cash-out refinancing and ensure proper reporting on your tax return.Seeking Professional HelpWhen to Consult a Tax ProfessionalManaging taxes can be complex, especially when you have a refinanced car loan in the mix. If you're unsure about how to handle your tax situation after refinancing, it's wise to consult a tax professional. They can provide guidance based on your specific circumstances and help you navigate potential pitfalls or maximize tax savings.Refinancing a car loan can have various implications on your tax situation, such as changes in deductible expenses or potential tax credits related to the interest paid on the loan. A tax professional can analyze these factors and ensure that you are taking full advantage of any available benefits while remaining compliant with tax laws and regulations.Choosing the Right Tax Advisor for Auto RefinancingWhen seeking professional help, it's important to choose a tax advisor with expertise in auto refinancing and taxes. Look for advisors who have experience with similar cases and can explain the implications of refinancing in clear terms. Consider asking for referrals from friends or family who have gone through the refinancing process. Take your time to find the right advisor who can assist you effectively and provide the necessary insights to make informed tax decisions.Furthermore, a knowledgeable tax advisor can also help you plan for future tax implications of auto refinancing. They can assist in creating a tax-efficient strategy that aligns with your financial goals and ensures that you are prepared for any potential tax changes in the future. By working with a specialized advisor, you can have peace of mind knowing that your tax situation is being managed effectively and in a way that benefits your overall financial well-being.Frequently Asked Questions About Auto Refinancing and TaxesCan I Deduct Auto Loan Interest?As mentioned earlier, auto loan interest is generally not tax-deductible. However, if you can demonstrate that the loan proceeds were used for deductible purposes, such as vehicle improvements that meet specific criteria, you may qualify for a deduction. Consult a tax professional to understand the rules and requirements pertaining to your situation.How Does Refinancing Affect My Credit Score?Refinancing your auto loan can have both positive and negative effects on your credit score. Initially, the credit inquiry from the refinancing process may cause a small decrease in your score. However, if you make timely payments on your new loan, it can help improve your credit over time. Additionally, lowering your monthly payment through refinancing can make it easier to meet other financial obligations, reducing the chances of missed payments and further benefiting your credit standing. Overall, the impact on your credit score will depend on how responsibly you manage your refinanced loan.Now that you have a better understanding of auto refinancing and its implications on your taxes, you can make informed decisions to optimize your financial situation. Remember to consult a tax professional for personalized advice, as everyone's tax situation is unique. By staying informed and proactive, you can navigate the world of auto refinancing and taxes with confidence.
*APR and Fees Disclosure: Auto Approve works to find you the best Annual Percentage Rate (APR), which is based on factors like your credit history, vehicle and desired payment terms. Fees to complete your loan refinance vary by state and lender; they generally include admin fees, doc fees, DMV and title. Advertised 6.24% APR based on: 2019 model year or newer vehicle, 730 minimum FICO credit score, and loan term up to 72 months. All loans subject to credit and lender approval.
Auto Approve has an A+ rating with the BBB and is located at 5775 Wayzata Blvd, Suite 700 #3327 St. Louis Park, MN 55416-1233. Auto Approve works to find its customers the best terms and APR, which are based on factors like credit history, vehicle, and desired payment terms. Loan amounts, costs, and fees vary by state and lender; they generally include admin fees, doc fees, DMV, and title fees, depending on the lender and period of repayment. There is no fee to obtain a quote and all refinancing-related costs are included in the amount financed so there are no out-of-pocket costs! For more information, please go to AutoApprove.com.