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Buying a Vehicle with Cash, Check or Credit Card

Kirstie_HKirstie_H Posts: 10,902
What are the requirements, especially under the Patriot Act? And will a dealer take a credit card for the entire purchase, or just a portion?

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  • epineyepiney Posts: 462
    Why do you ask to sign a credit app for a cash purchase? So far I have refused until I get an answer that makes sense.
  • Why do you ask to sign a credit app for a cash purchase? So far I have refused until I get an answer that makes sense.

    To confirm that you are who you claim you are.

    If the car you bought is involved in a fatal accident or a criminal activity - dealership will be held responsible for who they give cars to.
    We had cops come and go through specific customer's files, apparently the car he bought was involved in drugs trafficking.

    Also buying and selling cars could be used for money laundering, so we need to have accurate records for the IRS.
  • lrguy44lrguy44 Posts: 2,197
    We had a lady buy a $80,000 Range Rover then stop payment on the check. The car was on the East Coast with about 5000 miles on it when found. Later learned she had done this to several dealers. We now do a credit app and backup contract on all deals except previous customers, wire transfers, or verifiable cashiers checks.
  • joel0622joel0622 Posts: 3,302
    Why do you ask to sign a credit app for a cash purchase? So far I have refused until I get an answer that makes sense.

    If you come in to write me a check for say $30K and I am unable to verify your check is good becuase your bank is closed then I get what is called a "5 liner" just enough info to pull your credit. If in your credit I see a 580 credit score with 5 bounced checks then guess what, you are not leaving with my car until I can go to a bank in the morning and hammer your check. If you are a citizen then I will let you take the car.
  • epineyepiney Posts: 462
    OK, but what about a driver's license or even a passport as ID. Good enough for Homeland Security, should be good enough for a car dealer, no? So I bring a bank draft, no possibility to run away with the car.
  • isellhondasisellhondas Issaquah WashingtonPosts: 17,782
    Exactly. That check is worth nothing if we can't cash it.
  • epineyepiney Posts: 462
    Exactly. That check is worth nothing if we can't cash it.

    Ok, so I offer to bring a bank draft and/or let them authorize my Amex for the full amount of the car. Why do they still need a credit app?
  • joel0622joel0622 Posts: 3,302
    Bank Draft scams are as rampant as anything now days, they really are no better then a check in my mind, just harder to verify.

    Amex, bring it on, I have no problem with that other then the fee they charge. I have had deals blow out when we have asked payment type up front and they tell us cash then whip a Amex or other CC out with there fee. It would cost us $455 to put $35K on a Amex.
  • tidestertidester Posts: 10,109
    It would cost us $455 to put $35K on a Amex.

    Just curious - would you take Visa or Mastercard? How much would they charge?

    tidester, host
    SUVs and Smart Shopper
  • epineyepiney Posts: 462
    Amex, bring it on, I have no problem with that other then the fee they charge. I have had deals blow out when we have asked payment type up front and they tell us cash then whip a Amex or other CC out with there fee. It would cost us $455 to put $35K on a Amex.

    Yes, but the authorization on the Amex is only a back stop against the unlikely event of a bank draft fraud. See, I would make $400 on the purchase with Amex. As an aside, the last dealer allowed me to charge $40K. I was amazed.

    I still have not heard a legitimate reason why a credit app is necessary for a cash purchase.
  • Most I will put on a CC is 2,000 dollars. I will do that twice, once for a deposit and again at delivery, but I can't put a whole car on the CC.

    We get people all the time with Black AMEXs that want to put the whole car on the AMEX car and we have to tell them no. I actually think that in the the state of CT it is illegal to put an entire car purchase on a CC.
  • joel0622joel0622 Posts: 3,302
    If the deal is right we will take Russian rubles, two pigs and goat :D

    Amex has the highest fees they are like 1.3% higher if you don't swipe the card and have to manually enter the account # Visa and Master Card are lower but I don't know how much.

    I have actually only lost one deal due to credit card fees. It was a $62K transaction on a Plan Customer who told us he was going to finance with his bank. After we looked at his trade and agreed he informed us his bank was his Amex Card. Its bad enough selling Crew Cab Diesel trucks to plan customer, be be darned if we were going to lose $800-$900 doing it.
  • fezofezo Posts: 9,388
    Years ago I was going to do exactly that on a deal (though not for the full amount of the car)and the sales manager had a fit. Now we had waited weeks on the car and had multiple conversations with the salesman and the idea that it had to be cash or certified check never came up.

    In the end the sales manager relented no doubt because he might have lost the sale without it. There was a situation where I'd have $5K in three weeks but didn't have it at that moment.
  • lrguy44lrguy44 Posts: 2,197
    I still have not heard a legitimate reason why a credit app is necessary for a cash purchase

    If fraud, grand theft auto and other reasons brought forth here are not enough, I don't know what to say. I guess just do not buy here. I had a couple who would not sign a credit app or back up contract. We took the check the next day to their bank, cashed it, and delivered the car. Would you let a 20-80k asset go without a verification of funds? I don't think so.
  • joel0622joel0622 Posts: 3,302
    I still have not heard a legitimate reason why a credit app is necessary for a cash purchase

    Well we have given you two or three, you just keep changing the conversation and adding bank drafts and CC's to be able to continue this crazy debate.

    I want an app to see if you are an identity stealing no good thief
  • lrguy44lrguy44 Posts: 2,197
    Also, we have to run a OFAC on every customer as part of the Patriot act.
  • I still have not heard a legitimate reason why a credit app is necessary for a cash purchase

    If you are paying me with pictures of dead presidents, no app needed. If not, get your pen ready because youre filling out an app at my dealership. I have never lost a deal that way and if someone has that hard of a time giving up their information, which I will safeguard, then I wonder what they are hiding. I will be glad to destroy their info when the check clears...
  • epineyepiney Posts: 462
    Well we have given you two or three, you just keep changing the conversation and adding bank drafts and CC's to be able to continue this crazy debate.

    I want an app to see if you are an identity stealing no good thief


    No you haven't given me any really. You say you need it to confirm identity and feel secure about payment which are valid reasons. So I offer alternative ways for you to confirm identity and to make sure you get paid. Heck, I'll wire the money if you are that worried. Why isn't that good enough?
  • Almost lost a similar deal once when a guy wanted to put a 100,000 dollar with tax Range Rover on his black AMEX.
  • lrguy44lrguy44 Posts: 2,197
    We have already said that if money is wired, check is hammered at your bank or you use cash (IRS form required) then I do not need an app. Also asked if you would let a $20-100k asset go without verification of funds and you failed to answer.
  • fezofezo Posts: 9,388
    Pardon my ignorance but what's an OFAC?

    Meanwhile, I can see all of those as legitimate reasons for taking a credit app. I would guess if I walk in, buy the car and pay by check and agree not to take actual possession of the car until the check clears you'd be OK with that?

    I wouldn't do that, mind you. Take the credit app. The last thing I am worried about is a legitimate inquiry on my credit. I'm certainly not concerned about what you'd find out.
  • lrguy44lrguy44 Posts: 2,197
    I can't remember what the term OFAC stands for, but it is a list of names of "suspected" terrorist. I get the report when I pull a bureau. I can also pull an OFAC without pulling credit. Technically, anyone on this list cannot even buy a McDonalds hamburger.
  • epineyepiney Posts: 462
    We have already said that if money is wired, check is hammered at your bank or you use cash (IRS form required) then I do not need an app. Also asked if you would let a $20-100k asset go without verification of funds and you failed to answer.

    Thank you. So they don't need the app after all if I satisfy a reasonable security of payment. And no I would not let the asset go, without verification, that wasn't my point. My question and point was the former which you answered.
  • lrguy44lrguy44 Posts: 2,197
    Why do you ask to sign a credit app for a cash purchase? So far I have refused until I get an answer that makes sense

    Your original post did not ask for exceptions. In 95% of our cash transactions to non previous customers a credit app and back up contract are required. You did not indicate haw you were conducting the cash transaction and the exceptions are just that, not the rule.
  • fezofezo Posts: 9,388
    Ah! Got it!

    You wouldn't have wanted me in the place last week. Had this medical test which involves wearing this belt with a small computer on it to monitor things. Had it on all day. Made me look like a suicide bomber. They told me I could go to work like that. Um, I don't think that's such a good idea.
  • isellhondasisellhondas Issaquah WashingtonPosts: 17,782
    You better be careful taking AMEX on car purchases! You may have to double the warranty in some cases and in case of ANY dispute, the merchant is automatically WRONG and they WILL charge you back and make your life miserable!

    They REALLY protect their customers!
  • epineyepiney Posts: 462
    Your original post did not ask for exceptions. In 95% of our cash transactions to non previous customers a credit app and back up contract are required. You did not indicate haw you were conducting the cash transaction and the exceptions are just that, not the rule.

    OK, fair point, but when I asked at the dealer why, all I got was it's always done, identity etc. If you are wondering why I am bit sensitive to this stuff, I got an email last week from my online broker saying they had exposed databases, but my social wasn't released (this time)
  • "...two pigs and a goat..."

    SOLD! :)

    2009 PT Cruiser, 2008 Eclipse, 1995 Mark VIII, 1988 GMC Van

  • rob87rob87 Posts: 10
    I have purchased 2 new vehicles this year. Both times I paid with a personal check - no credit app. 2 different dealers in 2 states.
  • mackabeemackabee Posts: 4,709
    Not good enough. Driver's licenses can be faked and so can passports. I don't know why people are so paranoid to have their credit pulled when buying a car at a reputable dealer. If they don't have anything to hide what's the big deal? I don't have any qualms. If I went into a Lexus dealer and wanted to pay cash for my IS350 that you were supposed to get me ;) and they asked for a credit app to verify who I say I am I would tell them to be my guest.
    :)
    Mackabee
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