by Christoph Adunka
The purchase of used cars in Germany still often takes place in cash. This has certain advantages, but also carries risks for buyers and sellers. We have summarized the advantages and disadvantages of cash payment for you and show you possible alternatives.
The Germans love their cash. This fact is particularly evident in an international comparison. If it came to changes in the beloved cash, the outcry in Germany was great. When the Bundesbank stopped issuing the 500 EUR bill in April 2019, many feared this was the end of cash. Even if this assumption is unfounded, the question arises - what are the advantages and what are the disadvantages of cash? The purchase of used cars in particular is symbolic of the use of cash. This article shows why cash is still relevant in the purchase of used cars and what disadvantages this creates for the different parties.
Why does cash continue to play such a large role in the used car trade today? The great advantage of cash is the possibility of the sale train by train. This means that the purchase price is paid directly after handing over the documents and keys or vice versa. In this way, neither of the two parties, buyer and seller, takes a risk. Unlike bank transfers or the use of PayPal, there are no additional costs for the used car dealer or the buyer when selling with cash. Psychologically, the use of cash also plays a role. The feeling of holding the cash in one's hand immediately after the purchase is probably another reason for the popularity of this means of payment.
The car trade, like some other industries, is strictly monitored by the state. This restricts the possibility of selling for cash. So the dealer must meet special due diligence requirements from a cash amount of more than 10,000 EUR per customer per year. Only jewelry dealers are even more heavily regulated, with a limit of EUR 2,000. But what does this mean for retailers in practice? It is best not to accept cash payments, as the due diligence requirements are difficult to fulfill and the seller could face fines of up to EUR 1 million. For example, according to the law, the seller must keep a copy of the ID for 5 years and continuously monitor the business relationship with the customer. Furthermore, commercial buyers must obtain extracts from the commercial register and other information and continuously check them.
Not without reason, the legislature has introduced these strict measures. In addition to general risks such as tax evasion or money laundering, the seller also exposes himself to the risk of counterfeit money. Moreover, the clean handling of cash in the company involves additional expense. In addition, especially for the trade in used cars, there is the negotiating leeway that cash payment creates. Most serious for sellers: many buyers use this leeway for inappropriate renegotiations shortly before the contract is signed.
So how can buyers and sellers process a payment securely? The solution is to process payments through a sales platform. Digital sales platforms for B2B used cars sometimes offer payment processing themselves. COSPay, CarOnSale's payment processing solution, stands out because it offers transparency and complete security to the trade. With the help of such solutions, both buyers and sellers can follow the current status of the payment live. In addition, payment processing via the platform enables targeted dunning management. Thus CarOnSale saves the seller the administrative effort.
A special advantage of COSPay arises in combination with an express pickup. Here the buyer can fetch with maximum security of the payment completion, the car already two days after payment exit. Thus at the same time with the salesman the conditions days are enormously reduced and besides the completion and payment security are ensured.
Sollten you interest in COSPay or other services of CarOnSale to have, is to you gladly personally under 030 31196400 at the disposal