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Can I accept PayPal or Venmo for a used car sale?

Why PayPal is not the best option for selling cars

Last updated on 30 Dec 2025 • 6 min read

We don't recommend using PayPal or Venmo to receive money for a car sale.

Quick takes

It is possible and legal to accept PayPal as payment for a car, but we do not recommend it.
PayPal does not provide any payment protection for buyer or seller when the transaction is for vehicles.
Accepting PayPal costs the seller a fee of 2.29%–3.49% +$0.49, depending on the method of payment.
PayPal offers, especially for vehicles, are associated with over-payment scams.
There are much better ways to take payment

Introduction

PayPal (along with its app-based subsidiary Venmo) is a very convenient way to send money to friends and purchase from vendors, which, for many items, is secured with their Payment Protection Plan.

However, when it comes to transactions for cars, PayPal has some major drawbacks.

Why use PayPal?

There are many reasons people might want to transact with PayPal:

It’s very convenient
It’s quick
It’s free for the buyer
Many people have a PayPal account already
PayPal offers purchase protection and seller protection for many types of merchandise (but not cars)
It has earned people’s trust as a functional and relatively secure form of payment

However, buying a car is much more complex than buying a rare Pokémon card from an online auction or a smoothie from the farmer’s market.

Payment types: Friends and Family vs. Goods and Services

When someone sends money on PayPal, they have to select the payment type and are given two choices: “friends and family” or “goods and services”:

Friends and family designates, as the name suggests, the kind of payment you would make to someone you know for everyday money transactions like repaying your sister when she spotted you for dinner or pooling money with friends for a gift.
- There is no charge for friends and family transactions when paid with a bank account or PayPal balance.
- If a sender pays with a debit or credit card, the fee is 2.9% + $0.30 (receiver pays nothing).
- There is no purchase protection with friends and family payments—they are not supposed to be purchases.
Goods and services payments are meant as a way to buy goods and services from sellers—think art market prints, digital music downloads, or tennis lessons.
- Buyers do not pay fees for goods and services purchases, but sellers do (see below).
- PayPal offers purchase protection for goods and services purchases, with some exceptions—notably vehicles.

While there is nothing stopping most merchants from requesting customers use the friends and family payment type, there are common scams that involve this kind of request that take advantage of the lack of purchase protection. However, when it comes to selling vehicles, there is essentially no difference; cars are not eligible for purchase protection either way.

PayPal’s fees for sellers

You can read the fine details of PayPal’s fee structure for commercial transactions, but the majority of domestic transactions come with a percentage-based fee of 3.49% + $0.49.

That means if you sell a car for $6000, your PayPal fee will be

6000*(0.0349) + 0.49 = $209.89

If you're asking “What do I get for this?” The answer is “not much beyond convenience” (see below).

KeySavvy offers full protection for buyers and sellers for a flat rate of $198 (plus $99 if you have a loan to pay off) no matter how much you sell your car for.

Learn more

PayPal offers no protection for vehicle sales

The biggest problem with accepting payment by PayPal for private vehicle sales is that it does not offer any protection for the buyer or seller. Paypal’s Purchase Protection Program and Seller Protection Program explicitly describe motor vehicles as ineligible.

For the seller, this means that if the buyer’s payment gets reversed there is no guarantee you will get any of your money back.

How can PayPal payments get reversed?

If a buyer pays with PayPal, they can choose from two basic options, bank transfer (ACH) or credit card. Both are at risk of reversal.

Bank Transfer (ACH): The most common way for bank transfers to be reversed is when the account has insufficient funds. The big problem here is that the payment may appear to be successful at first but then will be reversed hours or as many as 3 days later.
Credit Card: Credit card payments can be reversed when:

The buyer disputes the charge with their credit card company.
The buyer claims they did not receive the vehicle, or that it was not as described.
The buyer uses a stolen credit card.

Without any guarantee of seller protection, reversal is messy and expensive, especially if you’ve already withdrawn funds. PayPal will try to collect these funds back from you.

No protection for buyers either

Offering peace of mind to your buyer is one of the keys to a quick and satisfying sale. Unfortunately, PayPal does not offer them purchase protection for motor vehicles.

That means that if there is something amiss with the title or the vehicle—or if they don’t get it at all, PayPal is not guaranteed to refund their money.

If a buyer repeatedly pushes to accept PayPal, you should be suspicious of a scam.

Be aware of common PayPal scams

A common scam on PayPal, especially targeting vehicles, is known as the “overpayment scam”:

Seller receives an offer with no negotiation for full price or even higher than full price.
Buyer wants to pay you extra for the shipping fees, which you’ll pay through their shipper.
Buyer wants to pay with PayPal only.
You receive the PayPal credit, transfer the money and send money to their shipper (wire transfer or fraudulent website).
PayPal payment gets reversed, asks you for money back.

If you get any inkling of this kind of scam activity, just call off the sale.

How much money can be sent through PayPal?

According to their FAQ, if you are a verified PayPal member (which requires adding a bank account or setting up a line of credit), you can send up to $60,000 per transaction (and they may limit this to $10,000).

If unverified, you can send up to $4000. This is enough to buy a decent car, but do sellers really want to deal with that much money from “unverified” accounts?

Is it ever a good idea to accept PayPal for a private car sale?

Honestly, no.

If the car sale is under $1000, perhaps the risk is fairly low—but then why not just ask for cash (which is free)?

KeySavvy: a safer, more convenient way to transact private car sales

Private car sales are complex transactions involving a lot of money and a great deal of trust. At KeySavvy, we have designed our system specifically for private automobile sales.

That means:

We verify the buyer’s payment before you transfer the vehicle. Once the buyer receives the keys, we transfer the funds to you.
We verify your title and check for any liens before sending it to the buyer.
If there are liens, we pay them off with the buyer’s payment. They get a clean title.
If the buyer’s payment somehow gets reversed, that’s our problem, not yours.
We charge a fixed rate of $198, split however you like between you and the buyer ($99 extra if we clear a lien).

PayPal and Venmo are great options for selling many kinds of things—golf clubs, shoes, video games, artisan kombucha—but we think private car sellers and buyers deserve a transaction platform specific to their complex needs.