Buying a car – payment - Buying a Car
Once you've found the perfect car, you will probably be asked to leave a deposit before you pay the full amount and take delivery. There are some simple rules to follow to help things run smoothly.
• Remember that a deposit is just that; it removes the car from sale on the premise that you will buy it. If you cancel because you've changed your mind, or have found another car, you could lose your deposit.
• The level of deposit required will depend on where you are buying. A small independent dealer may require only £100 against a cheaper car, while prestige dealers could want £1000 against a factory order. When buying privately, negotiate a sensible amount – £50-100 is fair.
• At a garage, you can pay a deposit with cash, cheque, debit or credit card. Credit cards offer the highest level of protection, because the Consumer Credit Act covers any payments made. This will give you greater rights if the garage tries anything underhand.
• Pay the balance of the deal only when you pick up the car. Personal cheques and bankers' drafts are easiest, but cheques take time to clear, while bankers' drafts take just 10 minutes to verify.
• Don't try to pay large sums in cash – a garage should refuse to accept it. You are not allowed to pay more than £10,000 in cash for an item, as a result of money laundering regulations introduced in 2003.
• Credit cards may be the safest way to pay, but a dealership may charge a handling fee on larger amounts due to the commission they have to pay on every card transaction. Debit cards don't usually have the same commission system – but don't have the same level of protection, either.
• Buy a used car from a business on the internet and you're automatically covered by the Distance Selling Regulations. This gives you a seven-day cooling-off period after you've taken delivery. You're also covered if you place a deposit online and conclude the deal face to face. The Distance Selling Regulations don't cover you when buying privately, or if the car has been altered or personalised to your specifications.
• Ask small or unknown companies for references or testimonials, and don't hand over any payment details unless you feel confident in its ability to deliver what's been promised. Speak to the local Trading Standards office if you have any doubts. Before you enter payment details online check the website uses encryption technology to protect you data. The payment page should also be secure – the url should always start with https: and not merely http:, which will not be secure.