When you hear the word “escrow” you probably think of a mortgage. However, escrow services can be used for the transfer of ownership on many items including jewelry, homes, furniture, and cars. When you have escrow, you have an account. This account is not owned by the buyer or seller, but it protects both people involved in any agreement.
Car Escrow Services For Purchase Or Sale
When you are buying or selling a car, you can use a vehicle escrow service. Before the title is transferred, instead of writing a check for the purchase, you put the money in an escrow account. This guarantees your safety since your money is protected until the paperwork is complete.
Once you are sure the title was transferred and you are satisfied, the escrow company releases the money to the seller. This ensures everyone is treated fairly and the seller gets their money. It also guarantees the buyer does not pay for something that they did not receive. If for some reason the deal is not completed, the money is returned to the prospective buyer.
Peace Of Mind
According to the BBB, car escrow services create a “safe environment where both the buyer and seller feel comfortable exchanging money and goods knowing they can’t be taken advantage of.” When it comes to a large transaction, such as a car purchase, some buyers prefer the added security of an escrow agreement.
Partial Payment Vehicle Escrow Service
In some cases, a partial payment or deposit may be made using automobile escrow. This might be done to reserve the car for a potential buyer while the car is inspected. If the buyer likes the vehicle, the remainder of the purchase price is added to the escrow account. If the buyer chooses not to buy the car, they get their deposit back.
Car Escrow Service Fees
All car escrow services charge a fee for their services. The fees may be split between the buyer and seller, or paid by one party only. Typically, the parties involved in the purchase decide who will pay the escrow fees before any money is deposited in the escrow account.
Some escrow services might charge a flat fee, while others base their fee on the value of the car being sold.
Published in by CARCHEX on November 13, 2014