The Vehicle Transport Payment Process: What is “Payment on Delivery”?

When deciding to ship your vehicle, there are many decisions that you have to make, starting with researching to find the best shipping company for your needs.

Here’s a little check list of some things you’ll need to consider:

Really, that doesn’t seem too complicated, and with a reliable, service-oriented company like ShipLux, you’ll be supported by experts who can help answer all your questions. 

Still, there is one question that might confuse you, and that is the question of payment. Most car shipping companies ask for Cash on Delivery (COD), or payment on delivery. But what does that mean? Keep reading to find out.

What Is Payment on Delivery for Vehicle Transport? 

In order to understand the car transport process and the process of paying for auto shipping, it starts with understanding the difference between a broker, carrier, and auto transport management company: 

• Auto Shipping Brokers coordinate shipments using a network of carriers 
• Auto Shipping Carriers are the drivers (often contract workers) who operate the actual truck that will operate the truck that will transport your vehicle from pick-up to its drop off at its final destination. 

• Auto Transport Management Companies like ShipLux may have a fleet of their own, in addition to brokering outside contracted carriers. This allows for ultimate flexibility and full service throughout the entire process

There are many single drivers who own a truck that are carriers. They are limited to their availability and willingness to take on a job. 

The advantage of using a broker—or better yet a management company–is that they have access to a larger network of carriers, which makes it easier to schedule vehicle transport in a timelier fashion. If one person cannot do it, another one will be found.

The Two Steps of Payment on Delivery Explained 

Step One: Brokers will usually ask for a deposit held on a credit card to reserve your spot and get your vehicle onto the schedule. In the case of ShipLux: “The deposit amount will not be charged until the Network Carrier is scheduled for pick up.” (From our Terms of Service).  Once that deposit has been charged, then it is considered payment in full to ShipLux – that is, the shipping company – but NOT TO THE CARRIER. 

Step Two:  The second part of the payment comes at the time of delivery in the form of either a certified check, a cashier’s check, or cash—in other words COD. Personal checks and credit cards are not usually expected. Why? Because checks can bounce, and credit card payments often come with fees. 

Here’s another little chart for clarity:

Why Payment on Delivery? 

You might be thinking, why can’t I just pay for this upfront and be done? There are benefits to everyone by using this Payment on Delivery method of payment. 

How Payment on Delivery Benefits the Customer 

You, the customer, are protected in several ways by this process: 

• The deposit reserves your space on a truck. Of course, you should always check your agreement to make sure that you can get the deposit back if the broker fails to find you a carrier in a timely manner. The policy at ShipLux is as follows: 

“The Customer may cancel this Agreement without penalty, if SHIPLUX, LLC. cannot dispatch the vehicle within 7 days after the first available pick-up date. The customer cannot cancel this agreement to go with a different broker at any time and doing so will result in the deposit being charged and not refundable to the customer. The Agreement runs continuous until the Customer cancels the Agreement.”  

(From ShipLux’s Terms of Service) 

• Paying on delivery motivates the carrier to deliver your vehicle more quickly. Of course, the time for delivery depends on a lot of factors (season, weather, distance, etc.) but this form of payment form of payment means the driver probably won’t waste time if it can be avoided.
   
• Although this doesn’t happen as often, and never with reputable companies, if you pay everything up front, there is always the possibility that the driver will take your money and your vehicle and disappear, never to be seen again.

How Payment on Delivery Benefits the Carrier 

One of the most frustrating things about being a contract worker is waiting for payment for completed work. By paying in full upfront, then the broker would need to pay the carrier at the end of the job, which could mean a delay in payment simply because of paperwork. 

Trust us when we say it’s easier for everyone if the carrier receives payment from you at the time of delivery. 

How Payment on Delivery Benefits the Broker 

This form of payment makes it easier for the broker, who does not have to manage the payment of the carriers. Having things go smoothly also helps protect their reputation and their ability to provide quality service—a win for everyone.  

 

You may have more questions about paying for vehicle shipping, like: How much is the deposit? How much will the entire shipment cost? etc. Well, every situation is different. The best way to get those answers is to reach out to talk with one of our expert agents, available live and 24/7, to get a guaranteed transparent price quote, (that means no hidden costs, ever) and get all of your shipping questions answered. 

With a supportive team, access to our fleet and contract carriers, and our Premium Service always included, we can help you navigate the complexities of shipping your vehicle with ease. Contact us to get started today!