I’m pondering* buying a car. Now, supposing I had all the required money (let’s say, $35000) in my bank account, could I just write a normal cheque to pay for the car? How about a paying for a house?
I’m aware that the bank places limits on the amount of money I may withdraw by debit card or at the money machine, but that’s more related to the amount of money I typically have on hand.
Is there any size limit applied to the cheque process in general?
[sub]*Fantasizing about, actually. In real life, I won’t be buying a car for a long, long time.[/sub]
Not really. As long as you have the money in your account, you can write a check for any amount you have.
Now with a really big check, the bank would most likely check to see you have the funds before depositing it, and may prefer to have a personal check certified.
A fantasy question deserves a fantasy answer!
Just go ahead and write it out now and go to the car dealer and drive it out!
To be realistic:
As long as you have the funds on deposit and the recipient will accept a person check in that amount there is no impediment to doing so. The dealer will undoubtedly call the bank to verify that furnds are available while busying you with other matters.
If you were to withdraw the funds, close the account, or some other foolish ploy to defraud the dealer they would take legal steps to recover any loss.
Generally when buying real estate with a check, the seller will want a cashier’s check or something similar rather than a personal check. There’s no legal reason the seller couldn’t accept a personal check if he wanted to.
As for absolute limits on the value of checks, I vaguely recall a case from the mid- to late-1980s when a very large lawsuit award had to be made with two payments. I don’t remember if it was two checks or two electronic transfers. I believe this was due to a technical limit on the size of one payment, rather than a legal limit. If memory serves, it was a lawsuit award involving two oil companies. I don’t know if the technical limit is the same as it used to be.
As a practical matter, you’ll find that car dealerships are very accomodating when you’re purchasing a new car. They really want to sell you a car, they don’t want you walking off the lot without buying one, and as long as they’re reasonably sure that you’re on the up-and-up they’ll take your check and take the risk that it might bounce and that you’ll have to make good on it another way.
I’ve bought new cars and paid the dealer by writing a check for the full amount, and they’ve never complained.
In fact, I’ve even been in situations where I didn’t have the cash in the checking account yet (I had to move it there from another account and the two weren’t connected ATM-wise) and told the dealer that we’d have to wait a couple of days before completing the transaction and they told me that they’d just sell me the car right now and hold onto the check for a couple of days before cashing it.
Like I said, they really don’t want you walking off that lot without purchasing one of their cars…
In the days before electronic transfers, governments and large corporations routinely conducted business through the use of large checks. Governments still do, for that matter. (Yes, physical checks sent through the U.S. mail, up in the millions of dollars.) I wouldn’t be surprised to hear of a billion-dollar check, although I can’t cite one.
You’re probably thinking of the Penzoil v. Texaco litigation back in the mid-eighties, where a Texas jury awarded $13 billion (yes, with a “b”!) to Penzoil. I don’t know how much they eventually settled the case for, but I imagine a pretty large amount.
I suppose there might be a limit on how many places the bank’s system can hold, so that the software for personal checks might accept $999,999,999.99 but kick out a check for one cent more.
Our Fedwire wire transfer system has an upper limit of $9,999,999,999.99, so a $13bn payment would need to be split. For $10bn, they may do it in one wire and tape a penny to a postcard and mail it.
I think a far more interesting aspect of this “huge-dollar-amount check” hypothetical scenario is being ignored: What does the recipient’s bank do when it gets this huge check?
I mean, how do they know it’s on the up-and-up even if the recipient agreed to take it and the check-writer has sufficient funds to cover it? Surely they can’t trust a million dollar check based on a signature match, or can they? Or does, say, Donald Trump get a phone call from the recipient’s bank (or his own bank?) asking if it’s legit? Seems to me there have got to be some safeguards downstream of the writer-recipient transaction that no one has mentioned yet. Anyone?
Going back to the, “buying a car and just writing a check” thing by sunspace
We did that last year and what RealityChuck said about having the money in the bank is necessarily true. When we left the dealer asked us if we wanted him to hold the check for a day or two. I must say there was a surge of pride at the look of respect in his face when we told him, “Oh, no, no. Take care of it today.” As far as I know they never checked anything.
Of course they did have our fingerprints, copies of drivers licenses, credit report going back upteen years, and proof that we had owned a house in town for 6 years. Guess they figured they had us by the balls, except of course for Ms Hook who is notibly ballless.
I work in the livestock industry and writing checks that are larger than most normal people do is not uncommon. For example, buying 500 head of cattle with a value of $600 a head means I have to write a check for $300,000. In almost all cases I have either done past business with the seller and/or I have a line of credit established with the seller. Also in most cases I don’t have the funds in the checking account when I write the check but I do let my banker know ahead of time that I am going to be buying some cattle and have filled out the paperwork on a loan. Then all I have to do is call the bank and they will put enough money in the account to cover the check. They also want me to stop in within a few days so they can get copies of the bill of sale and etc.
I also farm and that can involve some big checks also, but the biggest ones are for livestock.
I asked David Feldman (of Imponderables - Hey, this was before I’d heard of the SDMB!) about his and he said that you could, theoretically, take such a check into your bank and they’d have to deposit it. BUT, those checks are just for show and the recipient is actually given a “real” check after the photo ops are over.
BTW, remember that scene in Happy Gilmore when he complained that he wanted a giant check like the first place winners get, even if he came in last? A later scene shows the back seat of his car filled with huge cardboard checks.
