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Is it safe to accept a bankers draft for my car?

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Tue, 08/17/2010 - 03:26
maha22
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Joined: 08/17/2010
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I have a guy comig to buy my car
this weekend and he wants to pay with a bankers draft so he can take the
car away the same day. I did exactly the same thing when I bought it
from a car dealer a couple of years ago.
Is it a safe thing to do, how does the draft work exactly?
Cheers.

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Tue, 08/17/2010 - 09:10
#1
Abrar
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Joined: 03/12/2009
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Bank draft

As opposed to a cheque, which is drawn by a debtor/buyer on a bank, instructing the bank to pay a third party, the beneficiary/seller, the bank draft is issued by a bank, and drawn on itself, so acts more like a promissory note and is a direct payment undertaking by the bank.

With a cheque, the bank will only honour on presentation if the drawer has sufficient funds on account. Under a bank draft, as the issuing bank would already have debited the client's account for issuing the draft, it would be bound to honour on presentation without any other consideration. The perceived value of it is as a financial instrument is only as good as the beneficiary's perception of the creditworthiness of the bank in question. 

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Thu, 08/19/2010 - 14:33
#2
terryprice
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Joined: 08/19/2010
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It is safe as long as the

It is safe as long as the bank draft is not a forgery. If you have any concerns i would advise verifying with the issueing band before accepting.

Terry Price CPA

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