September 29, 2022
Automotive

Cash Payment for a Used Car

Cash is the oldest form of payment of a price in history: it is money concretely represented by banknotes or coins. The invention of cash has allowed human history to overcome the phase of bartering, according to an initial principle that is no longer fully valid today: the value of money was initially recognized due to the material (gold or silver) of which the coins were made. The currency was not important, what really mattered was the quantity of the precious metal that was actually contained within the payment. Today this system has been replaced by much more refined economic and financial models, but cash is still essential for the conduct of trade in our society: in Italy, approximately 150 billion euros are withdrawn every year.

Cash is also widely used in the field of automobile sales. In fact, when you buy or sell a car whose value is below the legal limit, you often choose to pay by banknotes. This means that in order to sell a used car correctly, in addition to choosing the best form of payment, its characteristics and legal requirements must be known: especially with regard to cash, then, the risks of disinformation can lead to rather significant penalties. Visit here for Cash for Cars.

Use of Cash

When you use cash, you are guaranteed by the institution that issued it that it is immediately usable. It is the national central banks that are in control of the mints that materially produce cash, or as in the case of Italy – being part of the European Union also at the monetary level – of supranational entities. Over the course of history, printing money has been considered one of the founding characteristics of a people’s national identity and its sovereignty: for this reason today there are disputes, often raised by specific political movements, about the choice of the euro as a currency. national. In any case, the Bank of Italy has not been abolished and maintains many of its functions, which may not be related to the printing of cash as to the control of their circulation.

Maintaining a careful control of the use of cash on the national territory is important, as it is a non-traceable payment method, which in many cases favors tax evasion through undeclared (“black”) payments that escape the radar law enforcement. Precisely for this reason, in recent years there have been numerous regulations aimed at limiting the use of money in payments.

To encourage the use of traceable payment systems, it was preferred to adopt policies favorable to those who use proprietary money, especially in electronic form, while restrictions have been placed on the use of cash. Examples of facilitations for the use of electronic payments, such as wire transfers or credit cards, were the obligation to receive payments with POS for all amounts over 5 euros in commercial activities and the total elimination of bank commissions for amounts less than 5 euros paid with these systems. The main source of these regulations derives from the introduction of the 2016 Stability Law.

Maximum Limit

The main countermeasure to prevent tax evasion from being favored by the circulation of cash is to impose a ceiling on the amount payable with them. The current Stability Law has also imposed that the maximum ceiling is € 2,999.90, therefore it is allowed to use it more than that allowed by the previous law on the matter: before the entry into force of this standard, it was not allowed pay the amounts over € 999.90 in cash.

When the two contracting parties agree to pay in cash to pay for the car that forms the subject of the contract, therefore, they must take care that the price is below the legal limit. Even if the payment is made in installments, in fact, it is not possible to circumvent this ceiling: it would be necessary to specify it in the deed of sale, if the form of it allows it, or if you are dealing with a professional it should issue separate invoices. In any case, the specification in the deed of sale between individuals is not sufficient: it is also necessary for the parties to agree on the payment and registration of each individual payment, therefore it becomes a tool that is not easy to manage within the limits of the law.

The reason why it was decided to introduce this limit is simple: it does not operate by greatly limiting the so-called “escape from survival”: it is a question of penalizing those who carry out illegal activities, from which large profits are generated in the form of cash.

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