Carnet Bank Guarantee
 

Hi
Im in the UK and trying to get a Carnet sorted for Australia. Ive just been down my local building society to get a guarantee and spent about an hour in there trying to explain what one was to them as they had never heard of it before. I have also spent ages trying to get hold of the RAC to finalize it, but just found out the whole department is shut for 11 days!!

Is it easier to go to a 'bank' rather than a building society to get it sorted and do you need an account with said bank??

By the look of the RAC 'bank Guarantee' form i thought this was going to be easy:confused1:

Thanks

Is a Building Society the same as a Credit Union? FWIW, we were planning on using funds in our Credit Union account to be held for the carnet, however the CAA won't recognize a Credit Union and it had to be a Canadian Bank.
Daryll

I had the same problem last year with my bank who denied all knowledge of carnet bonds despite Paul Gowen's help so I ended up putting my money from the same bank as a bond wih the RAC. Shortly before my departure, (1 day) the bank apologized and said that they would put up the bond (with my money), public service or what. They are a bunch of dipsticks, i.e. they do not understand what they are there for, only what they do, make money, and only at the cost of their customers. Ride safe.

Ha - interesting to hear that. Natwest screwed me around: denying all knowledge, trying to help me and just wasting my time and almost making me late for setting off on the trip. In the end I just put the money up with the RAC figuring I'd get it back when I leave Iran and post the carnet back to them.

Barclays Bank PLC (UK) know all about it once you ask someone in branch to check their computer.

I ended up paying £160 TOTAL for them Bank Guarantee to guarantee an £8000 carnet value.

To get a bank guarantee though, I think it really helps to be a long standing customer without history of bad debts and a decent amount of collateral/savings etc.

I put all my travel budget in my current account so it looked like I had plenty of cash and then applied.

The fallacy of believing that high street banks care about how long you've been a customer. Evidence on HUBB is that people are not being refused guarantees, it's just that the banks either don't know (on the retail side - i.e. You), don't expect you to want one and therefore class them as commercial products or worse still, they just can't be bothered because I suspect the fees are too small for them to feel it's worth training their staff to do them.
£160 seems alot of money to pay for them to guarantee YOUR money to someone else. They often lower your credit facilities to make sure you can't spend the money they're guaranteeing.

The truth with carnets is to have a bank that understands what a carnet is. It's as simple as that.

Oh I know they don't care about loyalty. But being a long standing customer means they can assess you as a risk a lot easier.... So they said anyway !!

£160 was by far the cheapest way to guarantee £8000. The insurance route would of cost £500 for the policy and I certainly didn't have a spare £8000 for the RAC to look after.

Even if I took a 12 month £8000 loan, the interest and set up fees would of been significantly higher too.

I've not found a cheaper way... Please tell me if you have !! :)


P.S. I know of plenty of people being knocked back for Bank guarantees even when their partners, friends at the same bank/branch were issued them.. They DO credit rate you on it, I'm almost certain of it...

I have had to give up with 'Nationwide'. They wont do it! I dealt with Paul Gowan at RAC too 'maja'. He was helpful and said they rarely deal with Building societys, Mainly HSBC and Lloyds. I will have to do a full cash deposit, a pain as i wont have the money there in my account in case of emergency but at least it wont actually cost me anything in the end. Its all a pain in the arse and overpriced!
Oh well, you cant temper the blade without putting it in the forge.

Ted, presumably you must have been drawing on the deposit account from time-to-time to pay for the trip's running costs.

When (or if) the balance dropped below the required deposit guarantee amount - of £8K in your case - did this cause a problem?

I ask because I spoke to Paul Gowen this afternoon, and I've got to make decision whether to go down the insured route or go for the bank guarantee method within the next few days.

I can put up the money with my bank - NatWest, with whom I have an inpeccable banking record (I think!) - by transferring some Building Society money, but I will definitely need to draw on this within a few weeks after I'm on back on the road (starting in four weeks' time).

Thanks

KEITH

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Nope, no problem at all...

Once the bank issues you that guarantee and AFTER you have your Carnet, you can take the whole lot out if you like. However, I guess it won't look great on your account.

My advice would be to have as much cash as you can in your account before applying. My adviser told me it makes a big difference when a computer decides on your request a few months later.

I had £7000 in my account before applying for my £8000 carnet... Two weeks after I was issued with the guarantee and AFTER my carnet had been issued, I withdrew £5000 straight away and into an other account.

My bank, nor the RAC ever even mentioned it.

You have it easy
 

Last year the two banks with whom I have (between them) business account, savings account, credit card, investment loans would not give me a bank guarantee for my carnet. Had to pay cash to motoring organisation, 1 1/2 times bike value (BMW) for the duration of the trip.

The esteemed institutions are Commonwealth Bank of Australia and National Australia Bank, for future reference. 20 years business with CBA and about 7 with NAB.

That's brilliant Ted... and good to know: a great little work-around!

I had a look around how to do it in Australia and it's pretty simple. You dont even have to be a costumer of that bank. They ask you to open a Term deposit account with them for the full amount of money you want them to guarantee. They will then issue the bank guarantee and you will not be able to touch that money for the time the guarantuee is going for. But at least you earn some good interest on it which actually exceeds the bank fees. Maybe it's just a matter of asking your bank in the UK if something similar would be possible there too?

Anyone using Natwest should avoid mentioning Iran if they are looking for a bank guarantee (Leeds handle carnet guarantees, your local branch won't have a clue). I made the mistake of doing that last year and having originally agreed they turned me down on the grounds that they would be breaking sanctions against Iran!!!

It's a good plan to earn some interest if you have the cash to leave with the bank for the duration of the trip, but I for one don't have that much spare cash. For Aus I wouldn't bother going the bank guarantee route anyway when they offer the insurance indemnity option.

Don't rely on being able to withdraw the money. We have a bank guarantee from HSBC. Despite having worked for them in fairly senior positions for many years before doing this trip and having several times the value of the bond deposited in various accounts with them they have ringfenced these funds and we can't touch them. I suspect where people have been able to this may be down to incompetence on the bank's part - especially if they have removed the funds fairly quickly. Don't rely on being able to move funds 3 months on. You should check this with the bank before you go down that route.

Banks issue guarantees all the time but 99% + will be in a commercial context which is why your average representative in a retail branch/customer service centre won't have a clue. Ask the person you are dealing with to find you a contact within the "Guarantees Department". Or failing that ask to speak to someone who deals with business banking.

I went to HSBC in London today, asked about a guarantee for a carnet and they issued me with this form to fill out. However I'm in a very similar situation to what Ted described in a previous post where I have enough money now to apply for the guarantee but will gradually (maybe rapidly!) be spending money after I have set off. I won't actually need to use the carnet until about Jan/Feb 13 although I leave in about a month. If HSBC ringfence that cash until I send the carnet back to the RAC then I don't see what the advantage is in getting a bank guarantee over just giving the RAC the money directly?

I think the difference will be you won't earn interest on a deposit with the RAC whereas you will with a bank (though probably not much nowadays). Still our guarantee was for 28K for three years so interest came to around 2K and therefore worth going the bank route.

There also used to be a limit (10K?) on the size of deposit the RAC would accept if I remember correctly so at the time it wasn't an option for us. May no longer be an issue or you may be within the limit.

That makes sense, thanks for that. In the mean time I did fire off a short email to the HSBC trade client services people (who seem to be the ones who normally deal with bank gaurantees?) and they pretty much confirmed what you said in your previous post:

"The funds will probably have to stay in your account while the guarantee is in place but your branch will be able to confirm this. The charge for a guarantee would normally be 2.2% of the value of the guarantee per annum but again your branch will be able to advise you accordingly."

That statement combined with your experiences and the fact my branch has no idea about bank guarantees (for reasons you stated in post 16) is enough for me to know not to bother. I'm under 10k so will probably go down the route of making a deposit to the RAC. How I will get those funds I'll worry about nearer the time! (I'd imagine a combination borrowing off interest free credit cards, borrowing off family members and whatever I can stump up with from my own account at the time will be the answer!)

Cheers

Basically i have recently traveld to pakistan from UK and i didnt take a Carnet, but the problem starts from Turkey to Iran border, you need a carnet for iran, so i spent 13 hours on iran border i met lots of agents selling me carnets on the border for 1000euros, i finally haggled one agent down to 650euros and i went straight thru trouble free, Carnet is very important otherwise you will have the world of trouble which will ruin your mood to continue the trip, now theirs a way around it, if anyone can get a hold of hungarian or polish carnets dummys ofcourse you got your self a ticket to heaven, i met three european guys at the border of iran they had ''FAKE'' Carnets and they swimmed thru with no hassle unfortunatly i lost their contact numbers as i lost my phones in pakistan, wounder.... hope this helps....

Carnet Bank Guarantee for Carnet - We used First Direct
 

We did Africa for 1 year in a 4x4 (Land Rover) and used a Bank Guarentee from First Direct.

RAC have a lot of experience of dealing with the department in FD that issues Bank Guarentees for RAC Carnet and the bank seemed to know all about it and was very easy to set up. Probably helped that we had been with FD for a few years but we were not what I call land standing customers.

Cost for the year to cover £5250 valuation of the car including 150% multiple for our trip was paid in 4x quarterly payments of £70 = £280 it total. Obviously you have to add on the costs for getting the Carnet from RAC but that was that.

I hear paul Gowan has moved on from RAC (true?) so unless they get someone of Paul's calibre on the job, things will be slower. He is (was) a legend and helped us a lot back end of 2009 / early 2010.

HTH

Nick

Definately Paul was a legend in his own right.

We always use the bank to place the bond for our carnet and last time it only cost us £75 plus the cost of the document. We are with Lloyds TSB and once we had explained everything in triplicate to our branch manager and put him in touch with the banks securities office there was no more problems. It is certainly the cheapest way to go.

Margaret