The auto transport industry is a highly competitive space. It's one of the reasons it developed so much in the last decades, especially since communicating has become much easier via the internet. Customers, clients, and brokers can easily get in touch with each other via online platforms and they are able to better negotiate prices and conditions to shipping cars and other vehicles.
Many customers are certainly preoccupied with how auto transport is paid for, as it’s a service that can cost quite a lot. There are certain particularities in the auto transport industry, and cash on delivery payment is one of these.
What Is Cash on Delivery (COD?)
Cash on delivery is the most common method of payment in the auto transport industry. Although you might interpret it as cash only, it also refers to payments done by money order, bank transfer, cashier’s check, or a certified check.
Because COD includes more than cash payment, it’s sometimes referred to as “collect on delivery”.
Why Do Auto Transport Carriers Demand COD Payments?
For an auto transport provider, making a delivery for which they won’t be paid can be a big blow to their business. A lot of carriers make the trip on a budget that includes your payment. This means that if they don’t get the money from you on delivery, they will suddenly be left with a gap in their immediate budget.
Another reason why you should expect COD payment for auto transport is that the customers themselves expect this system to be applied. Who would be willing to pay for a transport that was not done, or for getting their car stolen, damaged, etc? Customers will pay their transport in full once the car has reached its destination safely. This is why you, as a customer, should never accept paying the transport in full before the shipment is done.
What Are the Forms of COD Payments You Can Use for an Auto Transport?
Fortunately, even if cash on delivery is still required by most auto transport carriers, they still give you plenty of options to choose from, making the transaction convenient for both sides. Let’s go through a few payments options you can choose from:
- Credit card (not all carriers will accept credit card payment, though - if you would like to pay with credit, check if it’s possible before you seal the deal;)
- Debit card;
- PayPal, Transferwise, Revolut and other online virtual banking services;
- Bank transfer;
- Check (this option will not be available with all carriers, and the check would have to be certified;)
- Cashier’s check: this type of check is paid from the bank’s funds and is signed by a cashier, hence the name;
- Online payment.
You have to keep in mind that some payment methods, such as bank transfers or checks, might take some time before going through (up to a few workdays, sometimes even more). This can result in delays to your auto transport service, as the carrier will have to wait for the payment to be finalized before doing the delivery.
Paying a Deposit Before the Transport
Even if most auto transport carriers do use the COD payment system, some of them might still ask for an upfront payment. This request is justified by the need to cover transportation costs, but it’s mainly a way of guaranteeing their service will be compensated.
Upfront deposit payments can range between 10 and 50%, depending on each carrier, but it shouldn’t go above the 50 percent limit. We recommend our end customers to not choose a carrier who demands full payment upfront, or a deposit of more than half of the final price. You should also have a guarantee that your payment will only go through once the service is received - your vehicle has arrived safely at its destination.
Cash on Pick-up
Sometimes, carriers want to have a bit more certainty when it comes to the financial agreement with their customers, which is why they might demand cash on pick-up. When your car is picked for delivery, you will make the payment, which gives the carrier all the needed resources to make the transport.
Of course, this takes away the guarantee a customer has of only paying for the service once it’s done.
The Costs of an Auto Transport Carrier
When choosing an auto transport carrier, customers tend to trust more a company that won’t demand upfront payment, or that practices cash on delivery rather than cash on pick-up, let’s say. When it comes to payment, though, it would be unfair to judge a company’s legitimacy based on that alone.
Many auto transport carriers operate on a local level, or they are small businesses started by drivers who believe they can improve the service they work in. For an auto transporter that has just started this business or that isn’t yet strongly established on the market, any lost payment can seriously affect their business.
For these small, local carriers, an upfront payment means that they can keep the quality of their service as high as they can. Until they have grown enough, they might have to cover the costs of their transport beforehand.
Competition in the Auto Transport Industry
When it comes to competitiveness, the auto transport industry is fierce. There are lots of carriers on the market and it’s hard to choose between so many options. Customers naturally go for the lowest price, but it’s important to know how that small price is even possible.
Generally, there’s not much one can do to decrease the costs of auto transport, unless the waiting time becomes significantly longer. Since most customers also demand a quick service, prices are relatively high (compared to a shopping trip, let’s say).
To get the best price from a carrier, it’s most efficient to get to them through an auto transport broker. They will sometimes offer discounts from their own pay or negotiate better with the carrier, with which they have their own deal. Other times, finding an independent carrier who you know is reliable is preferable to going to a broker.
It all comes down to what your needs actually are, and it’s important to lay them out before sealing the deal with an auto transport company. Auto transport providers have a clear price list for the base service, which is moving your vehicle from A to B, and they can vary their offers by adding extra services.
When searching for the best auto transport company, just contact at least three competitors and lay down your demands and circumstances. If in a hurry, get a broker to do it for you and find the best price. Just remember that it’s not always the price that needs to be discussed, but also the payment method and expectations.
We Can Help
Here at A1 Auto Transport, we have more than three decades of experience in the trade, so we are very well aware of the challenges each side faces. Give us a call, let's discuss your needs, and find a way to accommodate them. We'll do everything we can to ensure a safe and competitive shipping service.
Written By:Joe Webster
Joe Webster began his journey in the auto transport field by attending the University of Southern California (USC), where he graduated with a Bachelor of Business Marketing.
After college, he started his career in the auto transport industry from the bottom up and has done virtually every job there is to do at A-1 Auto Transport, including but not limited to: Truck Driver, Dispatch, Sales, PR, Bookkeeping, Transport Planner, Transport Manager, International Transport Manager, Brokering, Customer Service, and Marketing. Working with his mentor Tony Taylor, Joe Webster has learned the ins and outs of this industry which is largely misunderstood.
With over 30 years experience in the industry, we've been helping people ship their vehicles, motorcycles, RV's, heavy equipment, household goods and more across the country or overseas without a hitch. Ask us anything.