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Buying a Vehicle with Cash, Check or Credit Card
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Comments
The lease rate only mattered to me because I was comparing lease versus buy and I needed to break out the components. Monthly payment was meaningless to me, which is opposite for most buyers.
A check or money order deal is not a cash transaction.
The sure fire way is to tell them you will be back tomorrow with a bag of cash. They HATE to see you walk out the door without a deal, Especially if you have already indicated you are a buyer and have the money.
If they let you then just go get the cash and pay them or have the bank wire the cash into their bank.
No one has to accept a check on your terms. You submit a check on their terms.
Mackabee
Your messages were so full of wit and wisdom they we felt they should have more exposure in the appropriate topic! :shades:
tidester, host
SUVs and Smart Shopper
Here is my spiel on it when asked and I am making reserve.
No Sir that is not the best rate I have available. The rate you are paying includes a mark up from the dealer which is where I make our money for doing the loan. The contract you are signing is a simple interest contract with no penalty for early pay off. If you are able to secure better financing feel free to refinance with that company.
I do ask though that you do one of two things, either do it in the next couple of days prior to me sending your contract and title work in or please wait till your third payment. This gives the title time to be processed by the state and get to the bank so it is there when you pay it off, also that keeps me from being penalized for writing a loan that is serviced for less then 90 days. If you would do that I would thank you, my mortgage company would thank you, Bellsouth would thank you.
What good is verifying my bank account if there is no money in the account to pay for the car? So the dealer sees that I have a bank account...but it's only got $8.00 in it when I write the check and take the car!
Of course when a car is financed, the customer is allowed to take the car before the dealer officially receives the money. However, the dealer is getting paid from a bank that has approved the loan, and the dealer is 99.9% assured that they will get paid. It is just a matter of transferring funds to the dealer.
With a cash buyer however, the dealer has no assurance that I will come up with the money. They are just holding my check, hoping that it will clear when they cash it.
My point is, there is a hell of alot more security in getting your money from a bank vs. a holding a personal check from Joe Schmo -- knowing he does not currently have the money to pay for the car.
not true, i've seen plenty of deals where the once the bank got all the info, they decided they wanted more stuff from the customer, or they didn't like something they found.
"With a cash buyer however, the dealer has no assurance that I will come up with the money. They are just holding my check, hoping that it will clear when they cash it. "
we use a check guarantee service (like many other dealerships). if your check bounces, and we have all the info on the check that is required, then the check service company comes after you for the money, but they pay us first.
Thats the rare exception not the norm. If it is the norm at your dealer then your F&I office needs to tighten up ALLOT
well, its not normal (or at least i didn't mean to imply that it was). Most of the times its with credit challenged customers.
Your argument doesn't make much sense. You said...
"i've seen plenty of deals where the once the bank got all the info, they decided they wanted more stuff from the customer, or they didn't like something they found."
Yet when another poster says "Thats the rare exception not the norm", you agree with him and say "it's not normal".
Also, your reply mentions that the bank often wants more "stuff" or didn't "like" something. But you don't say those actions result in a dealer not receiving his money and having to repo the car.
Therefore, I assume you actually agree with me that the "dealer is 99.9% assured that they will get paid" when dealing with a bank.
The only time we run into trouble is when the customer is less then truthful with us. I.E over state there income, don't really have a job, write a bad check for down payment, etc.
In 14 years of selling, desking, and working in F&I I can count on 1 hand the number of contracts I have had not cash. Every time it was because the customer lied to us. Now allot of that has to do with the fact we don't spot stupid deals. There has to be a reason before we deliver it.
Dang if we had the doc fees cover everything you all think it should we would have to raise it to about $1000. Everytime we talk about the cost of doing business one of you say
"Shouldn't that be covered by those exorbitant document fees?"-end
No Doc Fees. Yep, several dealers in my area do not charge document fees. It is very refreshing.
There don't seem to be any complaints from customers and the dealers are thriving.
To share my own experience I purchased a new car and wrote a personal check in 2006 with no credit app. required.
I don'y have a problem letting someone do that. I just take a deposit for $1000. Put them thru F&I. That way if they buy anything when they come back with their check they will have the right amount of money. I'll have the car already to go. Take the rest of their money and transer plates. Win, win....
It's another thing if someone is going thru their bank for a note and don't give us a chance. We can ussualy beat any bank rate plus it is a quicker transaction which makes me happy so I can move on the next person.
Most banks today won't disclose what you have in your bank account because of "Privacy Laws"
If we are going to take a check for anything over $1500 we will do a credit check. If they are over a 700 then we will accept the check. Most people I know with that kind of score are not going risk their credit to try and steal a car.
That sounds like their were certain stips involved for the bank to approve the loan either more money or POI or POA.
If the dealer is spotting risky credit customers than that is crazy. The only way I can see that happening is if they clubbing baby seals and even then I wouldn't want to do that untill I got a approval :lemon:
I think it's been that way for a very long time.
tidester, host
SUVs and Smart Shopper
They figure if they need to bump the customer later,the customer will pay rather than bring the car back.
Not good business IMO.
I bought an '07 Vibe last week, for $17,5xx OTD. Since I have the GM Card, and since the dealer does not pay any fees when you use it, I was able to use the card to cover $13k of the total.
That's a six-week 0% loan, and now I'm waiting for 0% balance transfer offers to cover it. If not, I'll have to dig it up elsewhere, but it makes "financing" quite easy.
I just thought I'd mention it here. If anybody knows if the same game works with the Chase Subaru card; I'd love to know.
-Mathias
I've found it more of a problem in the last two years were evrywhere I call I can't verify. That's why we'll run credit checks now. If they don't have a 700 or higher they have to get a certified bank check.
So, if you use a check guarantee service, how much does that add to your cost on the deal? They don't guarantee checks for free. I remember a dealer years ago commenting how much it would cost him to run a $3000 or so check I was writing for additional down payment. But now I can't remember how much it was. So, I guess you have to weight the chances to save a few $$$ and not have the guarantee or spend the $$$ and get the guarantee. Almost less expensive for the dealer to write the loan at this point.
Of course these services must cost them something and they must pass the cost on to us, but I doubt the cost to them is all that high.
Dealers: Need to verify a customer's identity? Fine, go right ahead. Need to verify funds? Fine, go right ahead. Need to satisfy the Patriot Act? Fine, go right ahead. Taking the customer's SSN helps you do this. So it is sufficient along with DL. But it is not necessary. You don't need the social security number, and customers don't want to give it to you.
This isn't a privacy issue. It's a security issue. If you're trying to prevent others from opening your lock, there is a huge amount of value in keeping the key secret. The SSN is the key in this case. :shades: Of course, just like a real key, the SSN can be forged, and that sucks, but there is still a huge value in hiding the key! Once the key is out, it's like a video on the internet: you have no control over what others do with it. :surprise: Your only control is to keep it secret in the first place.
Dealers: the customers -- your customers -- are telling you they don't want to give you their SSN. Maybe, possibly, you could look into alternative ways of satisfying your very legitimate needs, so that an SSN is not required in this small percentage of cases (cash deals? who does that? :P ). In the meantime, can you please listen to what your customers are telling you, instead of arguing with them? :confuse: :sick:
For a dealer to spend time and money on an alternate system,that would only be used on a tiny fraction of car deals probably wouldn't be cost effective.
We probably do more cash deals than most dealers, yet it may be once a year,if that, that someone doesn't want to give out their SSN.
Giving a dealership your SSN is not a dangerous thing to do.
My customers are not telling me that. The only people who I have ever seen that have a problem with it are the people here.
On a daily basis I take a 5 liner and never have a problem. I have had approximately 5 people give me flack over it in the last few years and all of them were trying to pass me a bogus check.
So people can rant all they want about it and I guess that I will just never do business with them after normal business hours, if my signature is on the paper work as OKing the deal you are not leaving with my car till I know exactly who you are. If it cost me a deal now and again fine.
As we speak I am chasing $52K on 3 used cars that we let roll on a hold check because they were friends with the salesperson. No 5 liners, no nothing. the checks were written on a closed account by his mother in law, we have nothing on her.
Yes, it is. There was a story here in Washington DC where a salesman was selling his customers’ identities.
Also, where do you keep your customers’ information; on computer’s hard drive that is connected to the Internet, that any teenager can hack into? Or is it in a filing cabinet that any disgruntled employee has access to?
Most dealers know nothing about computer security. I bet $100 that 9 out 10 dealers that except credit applications online don’t have their connections SSL encrypted. Yes, I know, what the hack is SSL.
Any system can be hacked, any information can be acquired.
Even so, there are times when your SSN is necessary
This is topic where some customers will just disagree with the guys in the biz. I understand that all cash deals are a small part of your business and YOUR systems are set up to use SSN to verify identity and OFAC. If you are not willing to accommodate the customers that not comfortable with giving a SSN, then I guees you risk the business. But that's OK, because it's your choice.
As customers, we have a choice to find a dealer that will work us or give in and provide the information.
It was not much a problem to buy the cars without a credit app. Sure, they asked, but I guess they wanted to sell a car more than they wanted the app.
One final thing, just because someone does not want to provide a SSN, does not automatically make them a crook. Perhaps you come across many that are, but you know not all people dressed like bums are bad ups. So you can't always broad brush people.
Joel, I guess I will never buy a car from you, but I'll still go out for beers with you.
Do you happen to know if your bank allows "funds availability checks". meaning if I call your bank and say that I have a check in the amount of $25K written on account# 123456 will they tell me if the account is active and funds available?
All banks used to do it. Allot of them had a touch tone system where you could call, key in the account# and check amount and it would tell you if it was good. Some even would let you call and put a 24 funds hold on the check you have written
Now most wont due to the Privacy Act.
I guess I need to clarify one thing. I have no problem taking a check from you during normal business hours when I can verify funds and if my spidey senses are tingling have the check hammered before your car is out of detail.
Or if you are a previous customer we will take your check all day with no problems.
Where I have a problem is the with the folks who come in after normal business hours on a Friday night and don't want to give up the info and then get mad when I tell them they are welcome to do all the paper work to hold the car and they can pick it up at noon of the next business day.
I would rather error to the side of caution and miss the occasional sale then have a $40K piece of metal on the road with what turns out to be a bad check.
My boss tells me to treat every transaction like it is my money, and if I would hesitate to lend the customer $100 of my own money he sure as hell does not want me to let go of $1000's of his, and he will never question it.
Thats why he he is so hot about the guy I had riding w/3 used cars worth $52K on a closed account. :sick: We did get our cars back yesterday though.
Don't know, but I would have called the bank and let them them talk to them if they wanted.
It may have helped that I bought two cars that were not on the lot yet. Took them later right off the truck. I suppose there are easier cars to try to make off with.
Anyways, I stink at darts and would lose a lot of money to you. I'll stick to the beer.
Cheers and happy holidays.
Let the thieves have the info of the people who buy on credit. Gotta pay to play.
Thanks for the followup, that's really interesting. My situation was different; the dealer insisted on the 5-liner, and let me walk out and across the parking lot to help "explain it to me".
They did say they would accept a certified check with no credit check, though.
You must be much more respectable-looking than I am.
Now most wont due to the Privacy Act.
This was the discussion I had with the dealer when I bought my car. I asked, Why not just call up the bank and check for sufficient funds? They said that they can no longer do that because of recent privacy legislation, and they even mentioned Sarbanes-Oxley, and also said it had to do with the fact that the dealership is a public company (it's owned by Sonic Automotive). They didn't even want to try to call the bank.
Of course, I had called the bank the previous day asking if they would verify funds, and they said sure, dealers call in all the time.
So I think there's some fast talking at work here, but also probably some real confusion about what's possible and not possible, and why. No real harm done.
LOL! Hardly...I go shopping in jeans and T-shirts.
Both dealers asked, but I was firm and they relented. I think it's reasonable to ask for a certified check.
The dealer disregarded specific instructions to fax copies of certain documents pertaining to the sale. This was to be done BEFORE they deposited the check. The lender has repeatedly called the dealer's finance manager to no avail and now the check (which the dealer deposited anyway) is going to be returned unfunded.
Since this transaction is in excess of 20K what's holding the dealer up from getting their money? A simple fax of five minutes is all that's needed.
As of 3 PM today (Monday) no paperwork has been faxed. (How many employees does it take to fax 5 documents? BTW, I have three of them myself.)
What would possess a business to ignore pursuing funds due to them?
Uh...... excuse me for my ignorance, but why would an inquiry knock down your credit score? What's the logic?
Thanks.
One inquiry, related to a product that you're going to actually purchase? Not worth going nuts over. So I apply for an auto loan and it knocks my credit from 745 to 740... a couple of on-time payments on that loan and it's back up again.
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Car dealers have back door deals with banks to steer a customer to them for financing from any where from $150.00-250.00 for each approved loan. Multiple banks compete with the dealer to provide car loans. The more banks competing the higher the back door deal or kickback. Also the dealer will bump the interest rate the bank quotes up 1/2 to 1% to make an added profit off the loan.
Research beforehand and then you know if they are trying to screw you on the deal. Example, if I plan on going 5 years at best rate, 3.99% in this example, I check my financial calculator... $1000 @ 3.99% for 5 years is $18.41/month. So, if I decide on something that the total financed would be $20K then I know my payment should be $368.20 or at least within a couple $ of that. When the dealership starts claiming to be at those terms but is saying it will cost you $425/month then you know they are possibly packing mop & shine, or something else that you are not planning on. You also make sure they are not quoting you a 72 month payment to get down to that... Just don't let your guard down or it might not work out as 'planned'.
I bought a car yesterday by bank financing. I was already approved and did have a loan account number. The dealer whilst processing did a new loan application (i think) and now my account online shows two applications for a loan. The dealer was supposed to use the already approved loan that I had.
since i am doing this for the first time some questions-
-is this the norm? will my bank see this application from the dealership yesterday and basically consider this as the original application for auto loan that i had applied for or will it consider it as a new application?
the reason i ask is that my original application was all clean and good to go. this new application that came in yesterday from the dealer whom i bought the car from has one document required which i cannot provide.
Just to simplfy since i know this is a little confusing--
-on the 4th of this month i had applied for an auto loan with my bank. approved and all doc problems solved, i was good to go.
-went to dealership yesterday, told them i have bank approval, they said fine, fill in the paperwork, all went through
-i came home and logged online to my bank account and now see 2 applications
-wondering if now the new application is going to be a problem as the bank will void the old one that i had got and was clean
Thanks much for your responses, really worried here.