If you’re considering buying a car from a private seller and sending cash through an online payment system, such as PayPal, it may not be the best idea.

Paying for a Vehicle With an Online Payment System

Is it Safe to Buy a Car With PayPal?The only kind of seller that’s likely to ask you to pay for your next car through an online paying system is a private seller. While systems like PayPal and Venmo are certainty convenient, they aren’t protected, and it can be very risky for large purchases.

Consumer Reports does say that PayPal is slightly safer than using a credit card for some purchases, since you don’t have to reveal your billing address to the seller. PayPal also offers a purchase protection program, which could possibly mean you could get your money back if the product wasn’t what you expected.

But, there’s an issue when you try to purchase a vehicle through PayPal. Cars are not covered under their buyer/seller protection. This means that you can’t open a case through their purchase protection program if someone scams you, or you want your money back because the vehicle isn’t what you expected or isn't as advertised.

If you’re considering using PayPal to pay a private seller for a car, it's recommended that you simply use cash and a written bill of sale, instead. Also, get the vehicle’s title before you hand over any money.

Other Online Payment Methods

Mobile peer-to-peer payment (P2P) services, like Venmo or Zelle, aren’t intended for commercial use. If these P2P apps believe that you’re using these services for commercial use, you may be banned, or these services can hold your funds. This means these apps may ban you if you use it so pay for services, or purchase large items. Its purpose is to allow you to transfer funds to your friends and family – not to pay a stranger for a car.

Another online payment method is cryptocurrency, like bitcoin, that some online merchants accept, but it’s usually irreversible once you pay someone. There are no reserve or resolution rights under law if you lose money, Consumer Reports advises.

Additionally, don’t wire money or pay for a vehicle with a gift card. If a private seller asks for this payment method when you’re trying to buy their car, it’s typically a scamming tactic, and it's usually impossible to get your money back. This is exactly why scammers ask for these payment methods, since they’re likely to keep your money once you find out it's a scam.

Unless you know the seller personally, it's not considered safe or wise to pay a stranger a lump sum of cash via online paying services for a vehicle, or any other large purchase.

The Bottom Line

It's not a good idea to pay for a car through an online payment system. Most of these P2P services are intended for people you know, not strangers. PayPal, while more trusted and very widely used on many major sites, doesn’t offer protection for buyers when it comes to vehicles.

Instead of risking your hard-earned cash on a car from a private seller, work with us at Auto Credit Express. We have a nationwide network of dealers that are signed up with bad credit lenders, and we’ll match you to a dealership in your area at no cost. Simply complete our auto loan request form; it's secure and there’s never an obligation to buy anything, so get started now!