# cashier's check vs. bank draft



## chaslee (Dec 13, 2002)

I need a little help with this. I would like to go with Penfed for financing my ED car. I was informed by the dealership that they will only accept a cashier's check or a personal check and not a pre-approved check or a bank draft. Is this reasonable? They claim that with the bank draft, there is still the opportunity for the bank to pull their money out after the transaction has been completed. Any thoughts? I don't know if Penfed will issue a cashier's check, but I will ask. Thanks.


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## DavidNY (Feb 18, 2006)

Why not give them a personal check and have the loan funded to your bank acct?


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## chaslee (Dec 13, 2002)

I always wonder whether that was legal given that the bank is expecting to pay a dealership. The tags would come to me wouldn't it? What then would the bank have as a lien? Thanks for the suggestion.


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## Just Bryce (Sep 23, 2005)

chaslee said:


> I always wonder whether that was legal given that the bank is expecting to pay a dealership. The tags would come to me wouldn't it? What then would the bank have as a lien? Thanks for the suggestion.


It's called the title


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## IrvRobinson (May 10, 2006)

We don't take any Internet checks or drafts,it's next to impossible to collect.It's really up to the individual dealers if they want to or not,but no one wants their money tied up for 90 days or longer.


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## JSpira (Oct 21, 2002)

IrvRobinson said:


> We don't take any Internet checks or drafts,it's next to impossible to collect.


Please explain. When is a check not a check? It would be fraudulent for a bank to issue a payment and then withdraw it.


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## Northcar (Sep 21, 2005)

Jspira said:


> Please explain. When is a check not a check? It would be fraudulent for a bank to issue a payment and then withdraw it.


Good question. I'm a lawyer, not a banker, but in my state it is illegal for an insurance company to pay a claim with a bank draft rather than a check which unlike the draft is payable on demand. I suspect you would have to sue to collect on the draft if it was not paid which like Irv noted would add at least 6 months to the collection effort. Getting back to the OP's question though, I don't know any reason why the subject credit union would not be willing to write the funds in a cashier's check. Unfortunately though even that is not enough for some transactions now because of the ease of printing forged cashiers checks with today's technology. The last time I purchased property in another state the escrow company insisted upon a wire transfer and would not even take a cashier's check.


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## Bill-SD (Feb 18, 2002)

I had the same issue with my PCFU check draft. They were very hesitant to take it. I've used them on several other cars with no problem. The draft says that they guaranty pay right on it. My dealer took it but I had to agree to finance through BMW (at some crazy rate) if it wasn't funded within 5 days. Of course it did (PCFU are good people), and everything worked out fine. I'm not sure if they would have given me something other than a draft if it hadn't worked out.


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## JSpira (Oct 21, 2002)

Northcar said:


> Unfortunately though even that is not enough for some transactions now because of the ease of printing forged cashiers checks with today's technology.


It´s easier now but was always doable. Ever hear of Frank Abagnale?


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## chaslee (Dec 13, 2002)

Thanks for everyone's comments. I can see now why almost everyone finances through BMWFS and then refinance after they get back. I will try to get PenFed to get them a cashier's check even if I have to pay extra for it and hope for the best. Worst come to worst, I will follow what others have done.


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## VIZSLA (Mar 16, 2007)

It would seem to be at the dealer's option. I used a personal check and one from Pen. Fed. with no problems at all. In fact the dealer didn't even notice that the Pen Fed check had the wrong vin # until I pointed it out. A quick call to PF assured me that the check could be used and that new docs w/ correct vins would be mailed to me. So go figure.


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## AZ-BMW (Dec 16, 2006)

chaslee said:


> Thanks for everyone's comments. I can see now why almost everyone finances through BMWFS and then refinance after they get back. I will try to get PenFed to get them a cashier's check even if I have to pay extra for it and hope for the best. Worst come to worst, I will follow what others have done.


Paid for my ED delivery 1.5 weeks before picking up the car in Munich. Used a Wells Fargo personal check and $5K on a credit card (wanted some freq flyer miles). No problems with my dealer and they didn't require a BMWFS application. BTW, I noticed the check cleared my account in ~3 days.


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## SignHere (Apr 26, 2006)

It isn't an issue with 'real checks', personal or otherwise, at least with us. It is those 'checks' (Read:drafts) that require the dealer to perfect a lein on the car to be paid. (E-Loans, Capital One, USAA, etc.) It doesn't matter which bank or credit union it is, they want the actual title in hand to pay us, and that can take forever on a Euro Delivery.


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## Bill-SD (Feb 18, 2002)

SignHere said:


> It isn't an issue with 'real checks', personal or otherwise, at least with us. It is those 'checks' (Read:drafts) that require the dealer to perfect a lein on the car to be paid. (E-Loans, Capital One, USAA, etc.) It doesn't matter which bank or credit union it is, they want the actual title in hand to pay us, and that can take forever on a Euro Delivery.


I understand your point and that makes sense. I thought it was just me, but I guess others have gone through this also. My dealer had a list of, what I believe, were institutions they accept drafts from. Pen Fed wasn't on it. My Pen Fed draft did clear within the 5 day period, and everyone was happy.


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