If you're running a car dealership in the UK and you're still only accepting bank transfers and cash, you're losing sales. I don't say that to be dramatic. I say it because I've watched it happen.
Before I built Vehiso, I worked as a car sales executive. I saw countless deals fall apart because a buyer wanted to pay a deposit on a Saturday evening and there was no way to take their money. By Monday morning, they'd found something else. That experience is a big part of why Vehiso exists - and why online payments were one of the first things I built into the platform.
This guide covers the three most popular payment providers for UK car dealers - Stripe, SumUp and PayPal - in proper detail. I'll explain the fees, the setup process, the gotchas (especially the restricted business headaches), and which provider suits which situation. I'll also cover how Vehiso integrates with all three, so you can offer buyers flexibility without paying extra platform fees on top.
Why online payments matter for car dealers
Let's start with the obvious. Cars are high-value items. Most buyers aren't going to pay for a car in full with a credit card - the fees alone would eat your margin. But there are plenty of situations where online payments make a real difference:
Holding deposits and reservations. A buyer sees a car on your website at 9pm. They want to secure it before someone else does. If you can take a £200 or £500 deposit online, that car is reserved and the buyer feels committed. No deposit option? They'll sleep on it, and you might lose them.
Part-exchange balance payments. The buyer's part-exchange covers most of the cost, but there's a balance of £1,500 to pay. A card payment sorts that out quickly without waiting for a bank transfer to clear.
Lower-value vehicles. If you're selling cars under £5,000, full payment by card becomes more realistic. Buyers expect it. They pay for everything else online - why not a car?
Finance deposits. When a buyer is taking finance, they often need to put down a deposit. Being able to take that online speeds the whole process up. For more on how finance works for dealers, I wrote a separate guide on car dealer finance options.
Building trust. Offering recognised payment methods like PayPal or card payments through Stripe signals to buyers that you're a legitimate, professional operation. It's one less reason for them to hesitate.
Stripe for car dealers
How it works
Stripe is a payment processing platform. When a buyer pays on your website, Stripe handles the card processing, security, and compliance. The money lands in your bank account after a short payout period.
Stripe is popular with developers and tech companies because it's extremely well built. The API is excellent, the documentation is thorough, and it handles edge cases well. For car dealers, the main appeal is reliability and speed.
Fees
Stripe charges around 1.5% + 20p for UK cards and 2.5% + 20p for EU cards. For non-EU cards, expect around 3.25% + 20p. These rates are current as of early 2026, but Stripe does update their pricing - always check Stripe's pricing page for the latest figures.
On a £500 deposit taken on a UK card, you'd pay roughly £7.70 in fees. On a £2,000 balance payment, that's about £30.20. Worth factoring in, but most dealers I speak to consider it a cost of doing business - especially when the alternative is losing the sale entirely.
Setup process
Setting up a Stripe account is straightforward. You provide your business details, verify your identity, and connect your bank account. Most dealers can get approved within a day or two.
The catch is that Stripe on its own is just a payment processor. You still need something to connect it to - a website with a checkout flow, an invoice system, or a platform like Vehiso that handles the integration for you. If you're trying to bolt Stripe onto a basic website without developer help, it can get complicated quickly.
Restricted business categories
Here's something that catches a lot of car dealers off guard. Stripe has a list of restricted business categories, and motor vehicle sales can fall into grey areas depending on how Stripe's risk team classifies your business.
In practice, most car dealers get approved without issues, but some have had accounts flagged or restricted after processing a few high-value transactions. If this happens, Stripe's support team will usually ask for additional documentation - proof of business, invoices, that sort of thing.
My advice: when you sign up, be clear and specific about what your business does. Don't just put "retail" - state that you're a licensed motor vehicle dealer. Upload your FCA permissions if you offer finance. The more transparent you are upfront, the less likely you are to hit problems later.
Pros
- Reliable and well-established
- Fast payouts - typically 2-3 working days, with options for next-day or instant payouts
- Excellent fraud protection
- Works well for both online and in-person payments (Stripe Terminal)
- Clean, professional checkout experience for buyers
- Strong reporting and reconciliation tools
Cons
- Not the simplest to set up if you're doing it yourself without a developer or platform
- Fees on high-value transactions add up
- Restricted business reviews can cause temporary disruption if you're not prepared
SumUp for car dealers
How it works
SumUp started as a mobile card reader company - the little white device you tap your card on at market stalls and coffee shops. They've since expanded into online payments, invoicing, and a broader payment ecosystem. For car dealers, SumUp offers both in-person payments (via their card readers) and online payment links.
Fees
SumUp's transaction fees for online payments are typically around 2.5% for card payments. Their card reader transactions are lower - usually around 1.69%. Again, check SumUp's current pricing as these can change.
There are no monthly fees for the basic account, which makes SumUp attractive for smaller dealers or those just starting to accept card payments.
The restricted business application - read this carefully
This is the bit that trips up car dealers with SumUp, and I want to explain it properly because it causes real frustration.
SumUp classifies motor vehicle sales as a restricted business category. This doesn't mean you can't use SumUp - it means you need to go through an additional approval process before you can start taking payments.
Here's what typically happens:
- You sign up for a SumUp account as normal.
- You start setting things up, maybe even try to process a payment.
- SumUp flags your account because your business type is restricted.
- You're asked to submit additional documentation - business registration, proof of address, details about your average transaction values, and sometimes even sample invoices.
- You wait. And wait. The restricted business approval process can take anywhere from a few days to several weeks. I've heard from dealers who waited over a month.
The key takeaway: don't sign up for SumUp on a Friday afternoon expecting to take deposits that weekend. Start the application process well in advance. Have your Companies House registration, trading address proof, and a clear description of your business ready to upload.
Once you're approved, SumUp works well. But that initial approval process is a genuine obstacle that you need to plan around.
Pros
- Simple to use once set up
- Card readers are affordable and work well for in-person payments at the dealership
- No monthly fees on the basic plan
- Good for dealers who want both in-person and online payment options
- Payment links are easy to send to buyers via text or email
Cons
- Restricted business approval process is slow and unpredictable
- Less sophisticated than Stripe for online checkout integration
- Payout times can be slower - typically 2-3 working days but sometimes longer
- Limited developer tools if you want a custom integration
- Customer support can be slow to respond during the approval process
PayPal for car dealers
How it works
PayPal needs little introduction. Buyers either pay using their PayPal balance, a linked bank account, or a card through PayPal's checkout. For car dealers, PayPal's main advantage is trust - almost everyone has a PayPal account, and many buyers feel more comfortable paying through PayPal than entering their card details on a website they've never used before.
Fees
PayPal's fees for UK transactions are typically around 2.9% + 30p for standard commercial transactions, though this varies depending on your account type and monthly volume. PayPal also charges for currency conversion if a buyer pays in a different currency.
On a £500 deposit, that's roughly £14.80 in fees - noticeably higher than Stripe. On larger amounts, the difference becomes more significant. A £3,000 payment would cost you about £87.30 in PayPal fees versus around £45.20 with Stripe (UK card rates).
Check PayPal's merchant fees page for current rates.
Buyer protection and disputes
PayPal's buyer protection is a double-edged sword for car dealers. Buyers love it because they feel protected. But for you as the seller, PayPal disputes on high-value items can be genuinely painful.
If a buyer opens a dispute or claim, PayPal can hold the funds while they investigate. For a £500 deposit, that's annoying. For a larger payment, it can cause real cash flow problems. PayPal's dispute resolution process tends to favour buyers, and the burden of proof falls heavily on you as the seller.
My advice: if you use PayPal, keep meticulous records. Save all correspondence with the buyer, take timestamped photos of the vehicle, and make sure your terms and conditions are crystal clear about deposits, refund policies, and what the buyer is paying for. Having the buyer sign an order form - ideally electronically through your dealer management system - gives you proper documentation if a dispute arises.
Account holds on new accounts
Another gotcha with PayPal: new accounts or accounts that suddenly start processing higher-value transactions can have funds held for up to 21 days. PayPal does this as a fraud prevention measure, but it's brutal for cash flow.
If you're new to PayPal, start with smaller transactions and build up your account history before relying on it for larger payments.
Pros
- Buyers trust PayPal - it reduces friction for cautious buyers
- Buyer protection can actually help you sell to nervous first-time buyers
- Easy to set up - most dealers can start accepting payments within hours
- PayPal.Me links make it easy to request payments
- No card reader needed for online-only use
Cons
- Higher transaction fees than Stripe and SumUp
- Dispute process is stressful and buyer-favoured
- Fund holds on new or low-volume accounts
- Less professional-looking checkout compared to Stripe
- Not ideal for high-value full payments due to fee structure and dispute risk
Comparison table
| Feature | Stripe | SumUp | PayPal |
|---|---|---|---|
| UK card fees (approx.) | 1.5% + 20p | 1.69% (reader) / 2.5% (online) | ~2.9% + 30p |
| Payout time | 2-3 working days (instant available) | 2-3 working days | 1-3 working days (holds possible) |
| Ease of setup | Moderate - needs integration or platform | Easy once approved | Very easy |
| Card reader available | Yes (Stripe Terminal) | Yes (from ~£39) | No |
| Restricted business process | Usually smooth - be transparent about your business | Required - can take days to weeks | Not typically restricted, but account reviews happen |
| Best suited for | Online deposits and payments via website | In-person + online payments, smaller dealers | Buyers who prefer PayPal, building trust |
| Monthly fees | None | None (basic) | None (standard) |
| Refund fee handling | Original fee not returned | Original fee not returned | Refund fee returned (recent policy) |
| Developer/integration tools | Excellent | Basic | Good |
Fees shown are approximate and subject to change. Always verify current rates directly with each provider.
Which provider should you use - and when?
You don't have to pick just one. In fact, I'd recommend offering at least two options. Here's how I'd think about it:
For website deposits and reservations: Stripe is the strongest option. The checkout experience is clean, fees are reasonable, and payouts are fast. If your website or platform supports Stripe (Vehiso does), it's the obvious first choice for online payments.
For in-person payments at the dealership: SumUp's card readers are hard to beat. They're cheap, portable, and simple. A buyer comes to collect their car and wants to pay the balance on their card? Hand them the SumUp reader. Done.
For buyers who specifically ask for PayPal: Have it available. Some buyers - particularly those buying online without visiting your forecourt first - feel safer paying through PayPal. The fees are higher, but losing the sale entirely is more expensive.
For high-value full payments: Bank transfer is still king for anything over about £3,000-£5,000. The fees on card payments for a £10,000 car would be £150-£290 depending on the provider. That's a real chunk of margin. Take a deposit by card to secure the deal, then arrange a bank transfer for the balance.
How Vehiso handles payments
At Vehiso, we've integrated Stripe, SumUp and PayPal directly into the platform. You connect your own accounts with each provider, and Vehiso handles the rest - payment pages, deposit collection, order forms, the lot.
The important thing to know is that Vehiso doesn't charge any additional fees on top of what Stripe, SumUp or PayPal charge. The transaction fees go directly to your payment provider. We don't take a cut.
You can configure which payment methods appear on your vehicle listings, set deposit amounts, and manage everything through your dealer management system. When a buyer pays a deposit, you get notified, the vehicle is marked as reserved, and the payment is recorded against that deal automatically.
It's one of the things I'm most proud of in the platform, because I remember how clunky the payment process was when I was selling cars. Scribbling card details on a piece of paper, reading them out over the phone to a card terminal - it was awful. There's no reason it should still work that way.
Practical tips for handling payments
Handling refunds
Refunds happen. A buyer changes their mind, a deal falls through, or a car fails its MOT before delivery. Here's what to keep in mind:
- Process refunds through the same provider the payment came in on. Don't refund a Stripe payment via bank transfer. It creates an accounting mess and removes the audit trail.
- Know your provider's refund policy. Stripe and SumUp don't return the original transaction fee when you issue a refund. PayPal recently changed their policy to return fees on refunds, but check the current terms.
- Have a clear refund policy on your website and in your terms. State whether deposits are refundable or non-refundable, and under what circumstances. This protects you in disputes.
Keeping records for HMRC
Every card payment creates a digital paper trail, which is actually a good thing come tax time. But you need to keep things organised:
- Reconcile payments weekly. Don't leave it until the end of the tax year. Match each payment in Stripe, SumUp or PayPal to a deal in your DMS.
- Account for fees separately. The gross payment amount and the fee are different line items. Your accountant will want them split out.
- Keep records for at least six years. HMRC can go back six years in an investigation. Digital records through your payment provider and DMS make this straightforward.
- If you're VAT registered, remember that payment processing fees from Stripe and PayPal are VAT-exempt (they're financial services). SumUp's card reader purchase may include VAT. Check with your accountant on how to handle this.
Security and PCI compliance
One advantage of using Stripe, SumUp or PayPal is that they handle PCI compliance for you. You never see or store the buyer's card details - the payment provider handles all of that.
Never, under any circumstances, write down a customer's card details or take them over the phone to manually key in later. It's a data protection risk, and it exposes you to fraud liability. Use proper payment links or your website's checkout instead.
Frequently asked questions
Can I pass the transaction fees on to the buyer?
Technically, you can add a surcharge to cover card processing fees, but the Consumer Rights (Payment Surcharges) Regulations 2012 banned surcharges on most consumer payment methods including debit cards, credit cards and PayPal. You can't charge extra for a buyer choosing to pay by card. You can, however, factor the cost into your pricing.
Do I need a merchant account to use Stripe or SumUp?
No. Both Stripe and SumUp act as payment facilitators, which means they provide the merchant account as part of the service. You just need a standard business bank account for payouts.
What happens if a buyer does a chargeback?
A chargeback is when a buyer disputes a transaction with their bank or card issuer. The funds are typically pulled from your account while the dispute is investigated. You'll need to provide evidence that the transaction was legitimate - invoices, signed order forms, delivery confirmation, communications with the buyer. Having a DMS that records all of this makes chargeback disputes much easier to fight.
Can I take a deposit online and the balance in person?
Absolutely. This is the most common setup I see with Vehiso dealers. A buyer pays a £200-£500 deposit online via Stripe or PayPal to reserve the car, then pays the balance when they collect - either by card (SumUp reader), bank transfer, or finance.
Is it safe to take full payment for a car via PayPal?
It's possible, but I'd be cautious with high-value transactions. PayPal's buyer protection means the buyer could potentially open a dispute after taking delivery of the car. For full payments over a few thousand pounds, bank transfer is safer for you as the seller.
How long does it take to get paid out?
Stripe typically pays out in 2-3 working days, with instant and next-day options available for a small fee. SumUp is similar at 2-3 working days. PayPal funds are usually available quickly, but new accounts may have holds of up to 21 days.
More from the Vehiso blog
- Top Car Dealer Website Providers in the UK (2026) - An honest comparison of Vehiso, ClickDealer, and SpidersNet.
- Car Dealer Finance: A Practical Guide - How finance integrations work and which providers are worth considering.
- What Is a Dealer Management System? - Why your DMS matters more than your website, and what to look for.
