Pros and cons of selling a car for cash

By Chad Lückhoff

With no real benefit to selling a car for cash, we look at what a cash sale means, and why a car would need to be advertised as such.

When the time comes to sell your car, you may be contemplating ways of listing it. You may want to be open to all transactions, or you may be willing to only sell it for cash.

This is a rather simple decision as the payment method doesn't influence the seller as much as it does the buyer.

There are a few things to consider before advertising the vehicle for sale.

Is the vehicle mechanically sound? This will assist buyers who are looking to finance their purchase, as finance houses prefer mechanically sound vehicles. They will require an extended aftermarket maintenance plan for older, less reliable purchases.

Is the vehicle older than 10 years? Finance deals on cars older than 10 years require extended aftermarket maintenance plans, and can be difficult to finance. This will make it more difficult to sell.

However, advertising your vehicle as a cash sale is not always necessary, as you should always wait for the full amount to clear in any case, be it a cash or finance agreement sale, before handing over the keys and title. To clarify, a cash sale can refer to several different methods of payment. This can either be physical cash, an EFT, or the deposit of a bank guaranteed cheque.

It is the prerogative of the buyer to arrange a method of payment, and all you (as the seller) are responsible for is supplying the vehicle’s particulars for finance applications.

The pros and cons of selling a car for cash.

In short, there are neither pros nor cons to selling a car for cash. Because you shouldn't be releasing a car without the full payment, the payment method becomes a moot point. A sale thus is a sale.

The main downside of accepting physical cash is the depositing thereof. Deposits up to R24 999 will not cause much concern, but handing in R25 000 or more will have the bank asking some questions. Nothing that should be of a concern, though, provided you state that it comes from a personal asset sale.

As for the tax man, questions may be raised for the large sum that was suddenly deposited into your account, but the same applies: declare that it was a personal asset sale and you will not be required to pay a tax on the deposit.

With the above in mind, you may still be asking about deals you may see, where the car is listed as a cash sale only. This will usually point to a vehicle that is older than 10 years, or one that may have mechanical issues that will negate the possibility of a finance deal being approved (i.e.: Code 3, stolen/recovered, or rebuilt cars). However, EFTs or bank guaranteed cheques will be accepted as payment.