Can you pay for a car with Paypal? Or Venmo? Or Zelle?

Buying (or selling) a car is always a major transaction, because it involves a significant amount of money, as well as legal documents for transfer of ownership and for registration. It’s hard to know how to pay, especially when you’re dealing with a private seller—because there’s a risk of fraud on several levels. 

When you’re buying a car, the biggest risk is that you really only have a piece of paper—the title—to determine who owns the car, and transfer ownership to you. That title could be counterfeited or altered, so the person selling the car may not be its legal owner (in which case it’s not theirs to sell). Which means you might end up not owning a car that you paid for.

Buying a car from a stranger can be a risky proposition

New Payment Options

In recent years, several new electronic and app-based ways to pay for things have become available. Some of them offer fraud protection for buyers and or sellers. These services connect to your bank account, or your credit card, or both, and they can be really convenient for some types of transactions. But what about buying a car with Paypal? Or Venmo? Or Zelle? What about Paypal vs Venmo or Zelle; how do they compare? Here’s some info on each one, and the differences between them, and why they may or may not be a good idea when you’re buying a car.

Paying for a car with Venmo

Venmo is great for paying a friend back for your share of the brunch bill, or an Airbnb, or even for small purchases from strangers—with small being the operative word. Because while it seems super safe—after all, you’re not handling cash in front of a stranger, and the person you’re paying has to connect their bank account to Venmo to accept payments—it actually isn’t.

The trouble is, Venmo has no fraud protection. So if you buy a car, and you pay the seller using Venmo, and you find out it’s stolen, and/or the title documents are falsified, or there’s a lien holder and the person selling you the car doesn’t have the legal right to sell it… you’re out of luck. Venmo isn’t going to help you recover your money; its purpose is not to protect you in transactions with strangers. They state this clearly on their site: “Venmo is designed for payments between friends and people who trust each other.”

The same problem applies if you’re selling a car and let someone pay you through Venmo. The payment might show up in your Venmo account in the app, and you might even initiate a transfer to move it to your bank account. But even when you see that, and it looks like a done deal—it isn’t. Payers can cancel transactions after the fact. Funds that were there and looked so safe in your account… suddenly aren’t. So Venmo is definitely not a safe way to pay anyone you don’t know or trust for a big ticket item like a car.


Fee: free for purchases funded with bank account, Venmo balance, or debit card. 3% for credit cards.

Fraud protection: none.

Paying for a car with Paypal

Paypal is the OG of online payment services. It’s trusted by many, and for many years it was the preferred payment method on eBay (it was formerly owned by eBay. Another fun fact is that Paypal owns Venmo!)

Unlike Venmo, it offers fraud protection for some items, so it’s a good option when you’re buying something from a seller you don’t know. But if you’re thinking of using Paypal to buy a car, here’s the problem:

As of now, Paypal excludes “motorized vehicles” from protection. So if you’re buying a car, motorcycle, snowmobile, or anything like that, it’s the same situation as Venmo—you’re not protected in cases of fraud.

Paperwork can be falsified by private party sellers, leaving you with a car you don’t own, and no way to recover your money.


Fee: Buying is fee-free, but a fee is applied to the seller’s side; so Paypal will take 2.9% + ($.30) of the purchase price. Which means that the seller is almost always going to add 2.9% to the price, to offset that charge.

Fraud protection: Some items are covered, but motorized vehicles are not.


Zelle is a newer-on-the-scene Venmo alternative. It’s integrated with several big-name banks and credit card companies, and is even built into some banks’ apps; it has a very credible pedigree. So it must be safe, right? Well… not so much.

There’s no fraud protection with Zelle. Just like Venmo, it’s a convenient way to pay friends and family (Their site explains that “you can send money to almost anyone you know and trust with a bank account in the U.S.”) So unless you’re buying a car from someone you trust implicitly, Zelle is not a good idea.


Fee: Zelle doesn’t charge a fee to send or receive money.

Fraud protection: none.

TRED is built for safe car buying and selling

TRED is different from the other services, because it’s not just a payment platform; it was built from the ground up as a full-service solution to help people buy and sell cars safely. Handling payments—with full fraud protection for buyers and sellers—is part of what TRED does. (We’ve got you covered, and you don’t even have to worry about going to the DMV!)

TRED offers buyers and sellers complete protection

If you’re interested in selling your car the easiest, safest way, with expert support, TRED can do it all—listing and advertising your car to help you find a buyer and get a great price, and protecting you and your buyer throughout the whole process.

For transactions with people you don’t know, TRED is your best solution for buying or selling a car—it was built specifically for that, and not only protects you from payment fraud, but verifies that the person selling you the car is the legal owner, and makes sure the title is transferred into your name and that the paperwork is filed correctly. TRED guarantees each transaction. Find out more about using TRED for buying or selling a car with complete peace of mind here (if you’re the buyer, your seller would need to sign up first), or contact our support team here to find out more.


Fee: 1.5% of the payment amount for payments via TRED Transact

Fraud protection: Yes. Payment is guaranteed (up to $75,000), for both buyer and seller.

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