Why the Auto Transport Industry is Primarily Cash-on-Delivery
When shipping a car, it’s important to understand how the payments work and what you can expect when you ship your vehicle.
Most car transport companies today split payments in two: one payment acts as a deposit, and the other is the payment for the shipment. Together, the two prices make up your total cost to ship your car.
The deposit is paid to the broker you hire to ship your vehicle, and the second payment is paid to the carrier as cash on delivery. Brokers often take payment via credit or debit card, and many can take payments such as check-by-phone and others. Carriers, though, need to have certified funds at delivery in order to deliver your vehicle, and most don’t accept any kind of non-certified payment method.
What is cash on delivery?
Auto transportation services, as we’ve talked about before, are generally paid cash-on-delivery, with a fee to the broker in the form of a credit card or other means of payment. First off, though, we need to say something: cash-on-delivery doesn’t always literally mean “cash” on delivery.
Rather, it means some form of certified funds, typically either cash (yes, you can pay in straight cash), cashier’s check, or money order – really, anyway that doesn’t make the shipper take anything you give him on faith, like a check.
A check is easy to pay with, but it’s also easy to fraudulently pay for things with, and cashed checks are so unbelievably common in the car shipping industry due to the high costs that most auto shipping brokers won’t take checks (of course, some do; it depends on who you talk with). It’s for this reason alone that auto transportation services are treated as cash-on-delivery.
Why do carriers only accept cash on delivery?
You’d be amazed at some of the things that customers have done over the years. While it’s gotten better in recent years, people still try to pull the wool over their shipping company’s eyes. Sometimes it works – people have gotten out of paying hundreds of dollars for a top-flight service. Deliberately bouncing checks, stopping payment on checks, calling fraud on legitimate credit card payments – these are things we have had to deal with in the past.
And that’s from the broker side – carriers sometimes have to deal with even worse problems. Most of the time, carriers don’t collect payment until delivery, and they rely on those payments to keep their trucks fueled and maintained. Hosing a carrier out of his pay can be devastating. Most auto transport carriers out there are independent owner-operators living out of their trucks.
This is the main reason why most auto transport carriers also don’t accept any form of non-certified payment. As most carriers are owner-operators, they tend to live off the payments they get from their customers, so they can’t afford a bounced check or a chargeback on a c credit card.
Imagine your car is your source of income; in order to make money, you need to drive it every day. Now imagine that it gets 6 miles to the gallon – that’s the going rate for many auto transport trucks. The money for fuel tends to evaporate rather quickly if it’s not replenished often; this is why most carriers only do cash-on-delivery with certified funds.
Do they take payment through Cash App or Venmo?
The world today is much different than the world was just a decade ago. Checks are slowly fading as a preferred form of payment, and there are so many more ways to pay for things today than in years past. Whether it’s Cash App, Venmo, Zelle, Apple/Google/Samsung Pay, there are lots of methods available to carriers today that weren’t around even just a few years ago.
Because of the rise in alternative electronic payment methods, a lot of carriers have started to relax their needs for “certified funds only.” This means that many carriers will accept Cash App, Venmo, or Zelle payments from customers if they are unable to pay via cash, cashier’s check, or money order.
This has helped open the car shipping industry to a lot of people and it better equips carriers to handle issues with payments before they arise.
If you want to pay your shipper via an electronic payment service, you need to discuss it with the carrier company ahead of time. Most still prefer certified funds when possible, but many do offer alternatives. As not all of them do yet, it’s still best to discuss it with them first.
Ship your car today with American Auto Shipping
If you’re interested in getting a quote to ship a car, take a minute to fill out our quote request form. It’s free and easy and gets you an instant quote right away. If you have questions about the industry, our website, or just want a quote over the phone, you can call us toll-free at 800-930-7417 and speak to a live representative.
We work to find only the best auto shipping carriers for our customers. We have stringent standards our carriers have to meet before we work with them. This also means that many of the carriers we work with are able to take alternative forms of payment. If you know you won’t be able to provide cash or a money order to the carrier, let us know. We can make sure to find carriers that can take payment via electronic methods if necessary.