What is the point of a Banker's Draft?

[Ruprect]

Buying a new (used) car. Got a banker's draft to pay for it. HSBC told me when I paid it in that it won't appear in the recipient's account until tomorrow, and won't clear to draw until thursday. Despite my protestations that it was as good as cash they wouldn't change the record. I might as well have written a cheque. Idiots.

[chris79]

I think it works the same as a cheque, only it's 'guaranteed' funds, so it won't bounce.

[Clippy]

I think it works the same as a cheque, only it's 'guaranteed' funds, so it won't bounce.

WHs but I think there have been cases of forged ones doing the rounds in the last few years so car sellers are wary of them - those that have heard about the dodgy drafts.

[Svalbaard]

I think the only difference between a bankers draft and a cheque is that the draft is guaranteed by the bank so it cannot bounce* which is why people release goods sooner when paid by that method.

* - This obviously does not apply to drafts issued by Northern Rock or RBS.

[expat]

Buying a new (used) car. Got a banker's draft to pay for it. HSBC told me when I paid it in that it won't appear in the recipient's account until tomorrow, and won't clear to draw until thursday. Despite my protestations that it was as good as cash they wouldn't change the record. I might as well have written a cheque. Idiots.

BUT: a cheque never clears in the sense that we all think of "clearing". It may be available to draw on in 3 days, but 6 months later it can be uncleared.

Maybe a W@nk*r's Draught doesn't have that risk? What Svalbaard said.

[BrianSnail]

I've read that you can cancel bankers draft in the event of losing it, it being destroyed etc, and this was being used by ganstas* as a way of car thievery.

As in...you advertise your nice shiny motor privately, the gansta test drives said shiny motor at the weekend and offers you the full asking price by a bankers draft. You scoot along to the bank on Monday morning to deposit the cheque, but the slimy bugger got there before you and cancelled it.

* I haven't actually tried this as IANAG.

[thelace]

When I offered to get a bankers draught when buying my last car, the salesman asked if the money was already in my account? Daft question I said. So he said, in that case if you pay using your debit card, you can take it away today

Bonus, and it saved me a trip.

[Moscow Mule]

When I offered to get a bankers draught when buying my last car, the salesman asked if the money was already in my account? Daft question I said. So he said, in that case if you pay using your debit card, you can take it away today

Bonus, and it saved me a trip.

Only works if you're buying from a garage though...

Bought my last car on my debit card.

[Ruprect]

private sale. Puts all the settlement risk onto me though which is what I'm not happy about. Perhaps I should have done cash but here was me thinking a bankers draft was as good as...

[Cyberman]

A bankers draft is effectively cash, but there are so many crooks around that banks are obviously taking no chances nowadays.