A cashier’s check is a convenient and safe option to pay for when buying a car. Most car dealers will accept a cashier’s check for safety and a guarantee of payment.
Let’s discuss what a cashier’s check is and how you can use it to buy a car.
What is a Cashier’s Check?
A cashier’s check is a guaranteed mode of payment issued in the form of a check by a bank or credit union.
It is a type of check where the bank ensures it will be cashed when presented. The bank deducts the check amount from the payer’s bank account or in cash before issuing it.
Therefore, a cashier’s check has no issue with available funds for the payee. Thus, it remains one of the safest payment options that you can use to make purchases.
As the bank takes the guarantee of the payment, it takes charges to issue a cashier’s check against this service. Commercial banks and credit unions usually charge around $10 per check.
A cashier’s check is a safe option for making larger purchases like buying a car without financing. It is easier and more convenient to pay by cashier’s check rather than carrying a large number of currency notes.
Can You Use a Cashier’s Check to Buy a Car?
Yes, you can use a cashier’s check to buy a car. In practice, it is a suitable alternative to cash when buying a car without financing. Your first task will be to find an ideal car deal. Then, finalize the car deal and set the payment terms with the car dealer or the seller if you’re buying directly from someone.
In most cases, you’ll first need to make a down payment and then take the car for the inspection. Most auto dealers will keep that amount as earnest money or escrow money.
Then, you can take the car for an inspection and make a decision. If everything goes smoothly, you can finalize the deal and make the final payment.
You can make both payments through a cashier’s check. However, since it costs you around $10-15, it’s better to pay for the final payment of the car through a cashier’s check.
Will Car Dealers Accept a Cashier’s Check?
Yes, most car dealers will accept a cashier’s check. Auto dealers selling cars without financing accept payments through bank transfers, cash, personal checks, cashier’s checks, and money orders.
So, a cashier’s check is an acceptable payment method for most auto dealers. Individuals selling a car may also accept a cashier’s check as it is a safer payment option as compared to a personal check.
Some auto dealers may not accept a cashier’s check if it is not drawn from a local bank. In that case, you can request the auto dealer to deposit the check into a bank account.
You can then finalize the deal as soon as the payment is cleared from your bank. Make sure to keep every transaction in writing and ask for a receipt when you pay the check to the auto dealer or any other car seller.
How to Get a Cashier’s Check?
Almost all commercial banks and credit unions offer cashier’s checks. So, the easiest way to get one is to visit the nearest bank branch.
You can use your bank account balance or pay by cash at the counter to get a cashier’s check from any bank. It will take a few minutes for the bank staff to prepare the check and issue it to you after signing it.
Most banks will charge a higher fee to non-customers for a cashier’s check though. Therefore, it’s a good option to get this check from the local branch of your bank.
Otherwise, you can order one from your bank by phone or online banking. The bank will deduct the amount from your account and send it to you by mail. However, it will take around 5-7 business days.
When to Use a Cashier’s Check to buy a Car?
You should use a cashier’s check as an alternative to cash when buying a car. It is safer and more convenient to pay by a cashier’s check rather than carrying a bulk of currency notes.
Moreover, if you want to travel out of state/city, a cashier’s check will be useful. If you need cash at any point, you can cash the check conveniently at any bank, credit union, and most retail stores as well.
Private car sellers and most auto dealers will not accept cash or personal checks. They look for a guaranteed mode of payment. So, a cashier’s check will satisfy their demands as well.
A cashier’s check is suitable when making a large transaction like buying a car. It is a useful alternative to debit/credit cards as well.
What are the Advantages of Using a Cashier’s Check to buy a Car?
A cashier’s check offers several advantages to both parties in a car sale transaction.
First of all, it is an acceptable mode of payment for everyone. The payee can cash it through a local bank account or otherwise in a few minutes.
It is a convenient option to pay for a large transaction on the spot as compared to paying by cash. You can get a cashier’s check by directly paying through the account and not involving cash at all.
A cashier’s check is guaranteed by the issuer bank. So, even if the payer does not have money at the time of making the transaction, the bank will make the payment to the payee.
Both parties can keep a copy of the check as proof of the transaction. It can be complemented by the sale receipt as well.
What are the Disadvantages of Using a Cashier’s Check to buy a Car?
A cashier’s check can have some disadvantages for you as well when buying a car.
A car dealer may not accept a cashier’s check if it is not drawn from a local bank due to the inconvenience of extra waiting time.
Car dealers and private car sellers may avoid a cashier’s check due to threats of scams or counterfeit checks. Thus, they may prefer cash over checks in a non-financing car deal.
Although it’s a rare case, a cashier’s check cannot be used for an international transaction when buying a car. So, you may have to consider wire transfers for international or intra-state transactions.
Finally, it takes a visit to the nearest bank branch to get a cashier’s check. Also, you have to pay charges to get one as compared to a free personal check.
Cashier’s Check v Personal Check to Buy a Car?
Most car dealers will avoid receiving a personal check for several reasons.
First, a personal check does not guarantee payment and it may bounce due to insufficient funds or unmatching signatures.
Second, the chances of counterfeit personal checks and scams are higher as compared to cashier’s checks.
Third, a personal check cannot be cashed if the issuer crosses it and the receiver may have to deposit it in a bank account.
The only advantage of using a personal check is the convenience of writing it immediately rather than visiting a bank branch for a cashier’s check.