How Bank Draft Payment Works When You Sell a Car in Alberta

A bank draft is how we pay for nearly every car we buy, and it is also the single thing sellers are most nervous about. A forged draft is the most common way a private seller loses a car, and the way banks treat a deposited draft changed in the last two years without anybody announcing it.

Here is the straight answer on whether a draft is safe, what makes it safe, and what happens in the days after you deposit it.

Is a bank draft safe when you sell a car privately?

Yes, with one condition attached. You have to be there when it is issued.

A bank draft is drawn on the bank's own funds rather than on somebody's personal account. The money leaves the buyer at the moment the draft is printed, which is why a genuine draft cannot bounce. It also leaves a paper trail: a record of who paid whom, for how much, and when. That is the reason it stays the default in this trade instead of a bag of cash.

What none of that tells you is anything about a piece of paper somebody hands you in a driveway. The guarantee belongs to the bank, not to the printing. The fake drafts sellers get caught by arrive the same way, brought to the appointment already made out, by a buyer who will not go to a branch.

So the rule is short. Go to the bank with the buyer and watch the teller issue it.

• Meet at a branch, not at your house and not in a parking lot
• Watch the draft being issued, then deposit it into your own account before the car goes anywhere
• Check your name is printed on it and spelled correctly, because a draft can only be paid into an account in the name it names
• Accept the exact agreed amount and nothing more

A buyer who will not walk into a branch with you has told you everything you needed to know, and it cost you nothing to find out.

Why can't you just phone the bank and check it?

Banks used to phone each other about it. The bank taking your deposit would call the bank that issued the draft and confirm it was real. They stopped doing that about a year ago, because calling around to get drafts verified was too much of a hassle and there was too much fraud.

That is the channel the old advice leans on, the advice that tells you to look the issuing bank's number up yourself and call it. The check that has not gone anywhere is the simpler one. Be in the room when the draft is created, and there is nothing left to confirm afterwards.

Why do the funds sit on hold after you deposit it?

This is the part that catches almost everybody, including people who have sold a car before.

Two years ago a draft could be issued in the morning and deposited in the afternoon and the whole amount was yours immediately. Forty thousand dollars deposited meant forty thousand dollars you could spend. That is no longer how it works. As of 2026, in every transaction we do, the receiving bank holds the funds for about four to five business days.

Nothing about that hold suggests the draft is suspect. It gets applied to every draft that comes through the door. The money was set aside when the draft was printed. What you are waiting on is your own bank's policy, not the buyer's solvency.

Two things follow from it. Business days means business days, so a Friday deposit is not a Monday balance, and it is the reason we do not buy cars on Sundays at all: the banks are shut, so there is nothing to go to. And if you are selling this car in order to buy another one, the hold sits between the two. That is much easier to plan around than to discover.

Is there any way around the four to five day hold?

One, and it is worth arranging before the appointment rather than at it. A draft deposited at the same bank it was drawn on is an internal transfer, and it will usually clear right away. Ours are drawn on RBC, so a seller who banks with RBC is typically spending the money that afternoon. Anything crossing between two institutions gets held.

So the question to ask any buyer in advance is which bank the draft will be drawn on. If it matches yours, meet at that branch. If it does not, plan for the better part of a week, and decide whether that timing matters to you while the car is still in your driveway.

Can a buyer cancel a bank draft after handing it over?

Not once you have deposited it. In every deal we have done, pulling money back out of an account it has already landed in means the bank opening an investigation, and it is very hard to do even while the funds are still sitting on hold.

Before you deposit it, treat the paper like cash, because that is exactly what it is. Lose a thirty thousand dollar draft on the way home and you have lost thirty thousand dollars. The one protection built into it is that in practice it can only be paid into an account in the name printed on it, which makes it worthless to anybody who picks it up. That is also why a sensible buyer offers to drive to your branch with you rather than hand it over at your door. The right place for a draft to exist is inside your account, not in your jacket pocket.

What if you do not want the car to leave before the money clears?

Then say so. Sellers do ask for this, and it is not an unreasonable request.

A seller in Calgary selling us a Toyota Highlander for thirty thousand dollars did not want the car going anywhere while the funds were on hold, so it stayed in his own garage until they cleared. The only condition was that the mileage stayed where it was. It sat there a week and two days, we picked it up afterwards, and he came back to us wanting to sell a second vehicle.

Another seller was uneasy about the draft itself rather than the timing. She banked with the same institution we do, so instead of handing her a draft we moved the money into her own account, and she issued the draft from there to pay out her loan and kept the remainder. Not one thing about the money changed. Only the order of it did.

Neither of those is a favour and neither is a standing policy, and the second one only worked because the banks matched. They are both just versions of the same idea, which is letting somebody watch the money land before the keys move. Ask for the version that removes whatever part of this worries you. If a draft is simply not something you will accept, say that too. We have paid cash and sent e-transfers for sellers who wanted it that way.

How does DriveOffer pay you?

We pay by bank draft at the pickup, drawn on our own bank, and we go to the branch with you rather than handing you anything at the curb. If there is a loan on the car, the lender is paid out first and your draft is issued for whatever equity is left over.

We tell you about the hold before you are standing in a bank rather than after, because it is the rule now and pretending otherwise only makes your following week worse. If that timing is a problem for you, say so when we book. There is almost always a way to shape the money around the part that worries you.