Physically paying the dealer for your new car?

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cdb2

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Odd question really, so be patient!

When I ordered the Sportback, I enquired about payment. The dealer said they no longer accepted bankers drafts or building society cheques, only cleared funds. He said I'd need to arrange to transfer the funds the day before from my bank to the dealership. He mentioned something called a TT transfer or may have even been an EFT transfer?????

Anyone know whether it is a TT transfer or an EFT transfer so I can ask the bank as presumably they'll charge for it?
 
I think EFT stands for Electronic Funds Transfer. This is where the money is transfered from your account to theirs electronically.

When I collected my new A3 I paid using my bank Debit Card. Not sure if this would still be acceptable because if the dealer is not set up to use Chip and Pin and you have a Chip and Pin card, if there was any problem the dealer rather than the bank would take the loss. Mind you they were also happy to accept my own personal cheque, but I have been dealing with the same dealer for many years.

If you have a Debit Card and the necessary funds in your current account it may be worth asking if they would accept that as a method of payment.

I tried to pay my using my Barclaycard so I would get a load of Nectar points but they would not accept a credit card.
 
Yep, I paid using my debit card as well. But the chip and pin fraud issue is an interesting one. The last time I was in my local dealer (last week) they didn't have it.

Banks also call EFT a CHAPS payment - Clearing House Automated Payment Service, I think - which costs £10-20 per transaction, depending on the bank. I think these go through the same day (next day at the latest), so you could do it on the day that you pick up the car.
 
If you pay with your debit card be prepared for your bank to put a block on the transaction, might require you to ring up and give some security details....

Could delay you getting your hands on your new toy /ubbthreads/images/graemlins/burningmad.gif
 
Yes agreed, it will be an unusual transaction for a lot of dosh. If it is Barc***s, they may well ring you as a security check.
 
I've paid for my last couploe of cards with a debit card and each time they have asked a shed load of security questions even though I pphoned thme in advance to say what was going on.

J.
 
I wonder whether it's something to do with that loophole in the UK banking system which allows for a bankers draft to be cancelled and the cash returned even after it has cleared into the recipient's bank account.

On the security aspects of debit card, I was amazed that mine went through without the having to speak to the bank. Several year's ago I bought an a camera for a couple of hundred quid at Argos and they had to ring up the bank for me to answer some questions before letting the transaction through. So for £23k I was sure I would have to do the same, but no.
 
You sure it wasn't that your bank were wondering why you were spending a couple of hundred quid on a camera from Argos /ubbthreads/images/graemlins/smile.gif

Seriously. I would never complain if my bank/credit card company called me up to question a transaction.
When i was in london i found out through my cousins never to use your card in a petrol station as this was the prime place for cloning. Happened to my mum when she moved down.

But strange they won't accept bank draft. Especially a big company. I paid for my car privately that way.
I think the bank has to honour the draft if the person with the draft cashes it. Because you can only get a draft with funds in your account.
Plus its proof that you intended to pay for the goods so you couldn't cancel it and not pay. This is the same with personal cheques. If you have a personal cheque which bounces you can claim the money from the person by using the cheque as proof of intent to pay. Its a pain in the bum process.
But if you are buying a 25k car, i'm sure the dealer can be a bit more trusting with a draft.
Strange one. But hope you are having fun with your new toy /ubbthreads/images/graemlins/smile.gif
 
audi upgrades
HI I pays mine a couple of days after a get it! I took the car then he send me a bill that I pay the week after... I was wery suprised that they agreed with this... but I was his idea...
 
A banker's draft is effectively as good as cash because the bank have taken the funds from your account, and then by issuing the draft they enter into a separate arrangement with the payee using those funds. I've never heard of a bank not honouring a draft they have issued because they would have had the money already!

The problem is, a banker's draft looks like a normal cheque, and so can be forged without difficulty. Some companies will only accept drafts during the daytime so that they can phone up the issuing bank to check (no pun intended..) that the draft has been validly issued.
 
I paid for my last 3 cars with an ordinary cheque.. but then again, I know the dealership well so I think it can be up to them on the day!..
 
I paid by cheque also! Funny old thing, when the dealer's delivery transporter driver left he forgot to take the cheque with him! I had to send it up by post. Not only that he nearly went without the Golf GT Tdi that was going in part exchange. Takes all sorts!
 
[ QUOTE ]
Eeef said:
last time i raised a bankers draft they took the money from my account immediately...

[/ QUOTE ]

Dead right! The money is debited when it is issued.
I work in vehicle finance and have yet to come across a dealer that rejects a draft on collection of a vehicle. Paying by card is a pain in the *** due to authorisations taking ages.
If you pay by CHAPS transfer it will have to be done the day before collection as it could be done at any time of the day and it might not be done by the time you go to collect your car.
 
[ QUOTE ]
spiider said:
If the customer removes all the dosh from his account before the cheque is cleared then the bank will not honour it. Therefore the bankers draft doesn't provide 100% guarantee. The bank advised me to get the money wire transfered and it can be done within a few hours.

[/ QUOTE ]

spiider, are you sure your bank was not talking about a normal cheque - there is certainly no guarantee that a normal cheque has cleared after 3 working days, as my bank informed me when I sold a car and accepted a normal cheque once. So I waited for 6 days before handing over the car!

But a banker's draft is actually a cheque from the bank which they only issue to, say, your dealer, if you have cleared funds in your account, so I don't see why they would not always honour it. I can see that there may be a risk for the bank if they issue a draft against uncleared funds. E.g., you pay in a cheque from Aunty Betty for £10k and it shows up as a credit on your account a day or two later, so you ask the bank to issue a draft, which they do, and then on the third day Aunty Betty's cheque bounces. But I thought the bank would only issue the draft against cleared funds..?

I am surprised that your bank suggesed wiring the money as I thought they made a profit out of banker's drafts because they debit the money on, say, Day 0, and then only pay out on the draft when it is paid into a bank, which may be Day 4 or 5 by the time you've handed it to the dealer and they have gone to their bank. Hence they get to keep the money for a few days. With a wire transfer, its gone that day so the bank can't make any money by placing it in the market!

Can anyone in the banking industry shed any light on this...? /ubbthreads/images/graemlins/smile.gif
 
Steve,

I was refering to a banker's draft too... as I have read all the scams where the bankers draft were fake, etc... I decided to call my bank to double check what was the best way to collect money.

I agree with your thinking it makes sense. A bank * should * take responsability about their own issued cheques !

May be what they meant is that the draft can be fake so that way you have no 100% guarantee, unless you wait for it to clear and it might take several day by that time it is too late.

 
Yes, I suspect the banks are trying to be careful about giving any form of guarantee as they may incur liability that way!

It is a difficult issue especially with private car sales as one party is just going to have to trust the other to some extent on any handover of cash/car. Asking for id so you know who you are dealing with is also a good idea, but can of course be faked...



 
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