Why the Auto Transport Industry is Primarily 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 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, any way 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.
We’re not kidding, you’d be amazed at some of the things that customers have done over the years to try to pull the wool over their shipping company’s eyes and 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’ve have had to deal with in the past.
And that’s from the broker side – these problems just exacerbate every other minute problem in a carrier’s life, because most of the time they’re living on payment to payment. Hosing a carrier out of his pay is actually pretty devastating to 90% of the auto transport carriers out there because they’re all independent businesses, many owner-operators, living out of their trucks.
It’s the main reason why most auto transport carriers also don’t accept billing arrangements with carriers or brokers: there’s just too much time that elapses between when they drop off a car and when they get the money for it. As most carriers are owner-operators, they tend to live off the payments they get from their customers.
Those are their paychecks, essentially, and a lot of that money goes toward fuel and living expenses (mainly fuel). Imagine your car is your source of income; in order to make money, you need to drive it, for whatever reason. 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.
Carriers have to be paid cash-on-delivery because it’s the only way their business model stays up. Cash, cashier’s check, or money order is all they accept; if they did checks, it’d be too easy to lose track of the money, and then the entire company would collapse because they can’t fuel the truck.
Granted, this may seem a little…apocalyptic, but the theory is what matters, and that’s the main reason why the auto transport industry is primarily cash-on-delivery. Anything else just isn’t plausible. It’s also the easiest for most every customer – no need to wait for checks to clear, and their cars don’t end up being held hostage or simply stolen because if that happened the carrier wouldn’t get paid, now would he? Would you pay a carrier who didn’t deliver your vehicle the money you earmarked for delivering your vehicle? Of course not, no one would. This is another big reason why carriers only take cash-on-delivery: because many customers demand it.
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.
Since 2007 Dave has written all the content and blogs for American Auto Shipping and during this time added the duties of customer support and transport logistics.
He currently resides in Washington with his three kids and their mom and cat. A fan of Marvel movies and good stories, when not shipping cars Dave can be found working on his novel, enjoying a good book or playing some tournament HALO.
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