Need help with Bankers Draft for car payment

gaz_jones

Hi all,

I'm going to buy a car on Saturday, and to save me carrying bundles of cash with me on the train, I have agreed to pay by bankers draft.

I have no idea what I need to do to get this though really. I am with Lloyds TSB, he is with Nationwide. Will I need to go to Nationwide with the money and buy a bankers draft from them? Or do I contact my bank and get them to do it? Is there a minimum and maximum value you can get for a bankers draft? I would need one for £8500 so hopefully that is enough to get one.

I would ring my bank, but it's a Sunday and they're closed so just thought I'd ask on here and see if anyone knows. Maybe you guys will have some tips too or something I may need to be careful of.

Hope this is in the right place, figured it's to do with bank accounts

Thanks everyone.

Baldur

As you bank with LTSB, you would organise a bankers draft from them. Looks as though it will cost you £20, from http://www.lloydstsb.com/rates_and_charges/current_account_charges.asp

jonesMUFCforever

Go to LTSB as soon as possible they will make out the draft whilst you wait and charge you £20 for it.
If the seller is ok with accepting a cheque then you need have no worries (other than being sure that it is his car to sell - check to make sure that there is no outstanding finance on it) if it was me I would be happier accepting the cash or a CHAPS payment (but this would have to be done on a business working day).

rb10

You need to get it from Lloyds. They will issue one to you, taking the money from your account with them.

However, they may make a charge for this - check their website/T&Cs for the current charge.

Note that a bankers draft is little more than a cheque - it still has to go through exactly the same clearing cycle, and the person who you buy the car from won't have 'certainty of fate' (i.e. the date when the cheque is certain to have cleared, and can't bounce) until the end of the sixth working day after he pays it in.

A BACS payment would be much quicker - that would take 3-4 working days.

(By the way, for future note, Lloyds' telephone banking number is open 24/7 - see http://www.lloydstsb.com/contact_us/useful_phone_numbers.asp)

gaz_jones

Thanks everyone. I'll get down to the bank tomorrow and get one arranged. £20 isn't too bad of a charge I guess.

I have already cleared it with the seller and he his happy for me to pay with one. I probably wouldn't like to receive one if I was selling the car, but he has said he's fine about it so that makes my life easier. I wasn't too happy about carrying that amount of money around with me.


Thanks again for the help everyone.

jambosans

rb10 wrote: »

Note that a bankers draft is little more than a cheque - it still has to go through exactly the same clearing cycle, and the person who you buy the car from won't have 'certainty of fate' (i.e. the date when the cheque is certain to have cleared, and can't bounce) until the end of the sixth working day after he pays it in.

However a banker's draft has the added advantage of being guaranteed by the issuing bank/ branch. The funds are withdraw from the payee's account in the first instance, with Lloyds TSB making the "promise to pay" on request, not the payee. The recipient can normally confirm the validity of a draft by contacting the issuing bank. So, clearing times aside, upon presentation, the recipient can be almost certain of payment, something a cheque (even guaranteed) cannot provide.

PS. I know you probably already know the above, but I think you've downplayed (i.e. not mentioned) the key distinctions between a banker's draft and cheque - I like to think of the former as a super-cheque. :rotfl:

jonesMUFCforever

There is no guarantee if the draft offered is a forgery!

rb10

jambosans wrote: »

However a banker's draft has the added advantage of being guaranteed by the issuing bank/ branch. The funds are withdraw from the payee's account in the first instance, with Lloyds TSB making the "promise to pay" on request, not the payee. The recipient can normally confirm the validity of a draft by contacting the issuing bank. So, clearing times aside, upon presentation, the recipient can be almost certain of payment, something a cheque (even guaranteed) cannot provide.

PS. I know you probably already know the above, but I think you've downplayed (i.e. not mentioned) the key distinctions between a banker's draft and cheque - I like to think of the former as a super-cheque. :rotfl:

Yes - but as JonesMUFC pointed out, it's the problem that if it's a forgery, then you don't get the money.

If I was selling a car, and the purchaser paid by banker's draft, then I would want to wait until certainty of fate on the banker's draft before handing over the keys, just in case it was a forgery.

jambosans

jonesMUFCforever wrote: »

There is no guarantee if the draft offered is a forgery!

rb10 wrote:

Yes - but as JonesMUFC pointed out, it's the problem that if it's a forgery, then you don't get the money.

Ah, but this is easily combated by the seller contacting the issuing bank. As I've said, a banker's draft is a promise to pay by the bank, not the account holder, therefore there are little/ no DPA issues when the recipient contacts the bank (the payee). Depends on the bank, for example, you can confirm the validity of a draft issued by HBOS via Telephone Banking, I would imagine, a more common practice would be to call the issuing branch.

I agree that best practice would be to wait until certainty of fate, and so does the BBA:-

British_Bankers'_Association wrote:

Drafts go through the normal clearing process like any other cheque and if you are offered a bank draft in payment, don't release the goods until you are sure the draft is genuine and has been paid.

gaz_jones

Another question. I'm as sure as I can be that the seller is legitimate, but what with all this in the news about people being robbed for their money when going to buy a new car, you never can be sure really!

If I was paying with bankers draft, and the bankers draft was stolen, I am assuming it will be traceable?

Mikeyorks

gaz_jones wrote: »

I am assuming it will be traceable?

Yes. It's a standard cheque ..... but drawn on the funds of your Bank. As opposed to being drawn on your funds, via a current account.