Buying a Vehicle with Cash, Check or Credit Card

13

Comments

  • epineyepiney Member Posts: 462
    I suppose, at the end of the day, it's like isell says, negotiate a better one, finance somewhere else or pay cash. All that should matter is if the rate is better than you can get elsewhere.

    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.
  • cccompsoncccompson Member Posts: 2,388
    No, my comments were directly solely at the original question - why is it necessary to review credit history on a cash transaction.

    A check or money order deal is not a cash transaction.
  • stealthrtstealthrt Member Posts: 10
    You want the dealership to take your check without a credit check?

    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.
  • mackabeemackabee Member Posts: 4,709
    HuH? :confuse: You talking to me? Are you talking to me? How did my posts end up on this thread? :confuse: This is the first time I've been here. :confuse:
    Mackabee
  • tidestertidester Member Posts: 10,059
    This is the first time I've been here.

    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
  • joel0622joel0622 Member Posts: 3,299
    Depends on the state you are in. There is allot of verbiage now on contracts that state the rate is negotiable. Also when a customer ask you if that is the best rate they can get and if you reply "yes" when you are in fact making reserve you can get in hot water.

    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. :D
  • mattgg1mattgg1 Member Posts: 191
    nthe -

    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.
  • nthenthe Member Posts: 414
    "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. "

    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.
  • joel0622joel0622 Member Posts: 3,299
    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.

    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
  • nthenthe Member Posts: 414
    "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.
  • mattgg1mattgg1 Member Posts: 191
    nthe -

    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.
  • joel0622joel0622 Member Posts: 3,299
    If all information given by the customer is true and correct then you are guaranteed to get your money from a finance deal.

    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.
  • moparbadmoparbad Member Posts: 3,870
    quote-
    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.
  • greanpea68greanpea68 Member Posts: 1,996
    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.

    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.
  • greanpea68greanpea68 Member Posts: 1,996
    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.

    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. ;)
  • greanpea68greanpea68 Member Posts: 1,996
    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.


    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:
  • tidestertidester Member Posts: 10,059
    Most banks today won't disclose what you have in your bank account because of "Privacy Laws"

    I think it's been that way for a very long time.

    tidester, host
    SUVs and Smart Shopper
  • volvomaxvolvomax Member Posts: 5,238
    Some dealers just want to get the car on the street.
    They figure if they need to bump the customer later,the customer will pay rather than bring the car back.
    Not good business IMO.
  • steine13steine13 Member Posts: 2,834
    .. but on topic.

    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
  • greanpea68greanpea68 Member Posts: 1,996
    I think it's been that way for a very long time.

    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.
  • wlbrown9wlbrown9 Member Posts: 867
    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.

    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.
  • loungerlounger Member Posts: 32
    We bought a new car here in Florida with a personal check. The dealer must of used a check guarantee service. But in addition, they also had a software service that pulled public information about us that would be very difficult to know for an identity thief (multiple choice questions on old addresses, prior cars, divorce, land holdings, etc.) that they must have used as their due diligence in verifying our identity. If you think you have much privacy, you are dreaming. A ton of stuff is out there in the public record about you.

    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.
  • wilkens11wilkens11 Member Posts: 48
    There's an important point that maybe wasn't emphasized, regarding dealers pulling a customer's credit on a cash deal. An extremely important reason why customers don't want their credit pulled, is that they don't want to give their social security number. :mad: This has been mentioned again and again, by posters right here in this thread, but it keeps getting lost in the nonsense. :sick:

    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:
  • volvomaxvolvomax Member Posts: 5,238
    The problem is, is that the existing systems for dealer to readily satisfy both OFAC and their need to verify a customers identity are predicated on using the SSN.
    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.
  • joel0622joel0622 Member Posts: 3,299
    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? ). In the meantime, can you please listen to what your customers are telling you, instead of arguing with them?

    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.
  • exb0exb0 Member Posts: 539
    Giving a dealership your SSN is not a dangerous thing to do.

    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.
  • volvomaxvolvomax Member Posts: 5,238
    I would bet that the possibility of having your SSN compromised by the dealer is no better or worse than with any other entity that you give your SSN to.
    Any system can be hacked, any information can be acquired.
    Even so, there are times when your SSN is necessary
  • joel0622joel0622 Member Posts: 3,299
    If I am thief and want that info I can buy it for $1 along with your credit card number, mothers maiden name, and you zip code. May not be yours personaly but I can get as many as I want.
  • alamocityalamocity Member Posts: 680
    Recently at on of the largest dealerships it was discovered that quite a few of the car applications were found thrown away in a nearby dumpster, luckily they were discovered before they fell in the wrong hands but I'm curious how are these documents normally controlled? I know each time I visit a dealership the first thing they want is to fill one of these out, and after seeing this on the news it made me very uneasy. Having worked with data and records all of sorts while in the military I know all to well how important it is to control information, made me wonder what sort of safeguards dealerships use to control such sensitive information.
  • volvomaxvolvomax Member Posts: 5,238
    If they are dead deals,meaning a car wasn't purchased, they are generally kept in a special file and then shredded.
  • epineyepiney Member Posts: 462
    Ok, since I guess I sorta unknowingly started this topic, I'll post a follow-up. Two new car purchases, no credit checks. No trade, either time. Maxed out the allowable deposit on Amex and "cash" for the rest. First dealer asked for a bank draft. No problem. Second dealer took a personal check. Asked if I would do 5 liner. I said I preferred not to. No problem, deal completed.

    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. :D
  • joel0622joel0622 Member Posts: 3,299
    Beers are good, I think allot of the worlds problems could be solved over a cold beer and a dart board. Hell a cold beer is the reason I am married to best women in the world.

    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.
  • epineyepiney Member Posts: 462
    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?

    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. :D

    Cheers and happy holidays.
  • wilkens11wilkens11 Member Posts: 48
    If I am thief and want that info I can buy it for $1

    Let the thieves have the info of the people who buy on credit. Gotta pay to play.
    :D
  • wilkens11wilkens11 Member Posts: 48
    Two new car purchases, no credit checks.

    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.
  • wilkens11wilkens11 Member Posts: 48
    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.


    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.
  • joel0622joel0622 Member Posts: 3,299
    What in the world does the SOX act have to do with privacy issues? The SOX act has to do with keeping accounting firms in line. I think you are right, there is some fast talking at work here.
  • wilkens11wilkens11 Member Posts: 48
    You got me. :) Sarbanes-Oxley just means more paperwork for public companies, and it's probably counter-productive.
  • epineyepiney Member Posts: 462
    You must be much more respectable-looking than I am.

    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.
  • randyinalabamarandyinalabama Member Posts: 1
    I will soon be in the market for a new car. I was planning to write a check for the full amount. Will that hurt my negotiating with the salesperson? I hear they make money off new car loans. Will they be as interested in dealing with someone willing to pay cash?
  • isellhondasisellhondas Issaquah WashingtonMember Posts: 20,350
    Don't worry. They will be more than happy to take your personal check!
  • greenran02greenran02 Member Posts: 2
    Apparently all Honda dealers are NOT the same. I just bought an 08 Accord six days ago. I traded my last one and added in cash for the down payment. The balance was on a check against outside credit line (financing that I got via Internet lender).

    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.
  • joel0622joel0622 Member Posts: 3,299
    That has nothing to do with it being a Honda dealership. It is just a case of a sub standard employee. All lines of work have them, plumbers, painters, preachers, and prostitutes, you can find a slacker in every group.
  • greenran02greenran02 Member Posts: 2
    I don't believe that's the case. When I contacted the finance mgr this past weekend she said that the paperwork was in the accounting dept which was closed for the weekend.

    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?
  • m6vxm6vx Member Posts: 142
    Actually, even just ONE inquiry can knock your score down up to 5 points! Why get your credit slammed when it's not necessary?

    Uh...... excuse me for my ignorance, but why would an inquiry knock down your credit score? What's the logic?

    Thanks.
  • Kirstie_HKirstie_H EdmundsAdministrator Posts: 11,132
    5 points really isn't that much and should NOT make the difference in what financing you get. The idea is that if you get a bunch of inquiries, it will knock down your score to a level that may make a difference. Why? Because if you get a bunch of inquiries, it looks like you're shopping a lot for credit, meaning you're either having a hard time getting any (because of personal finance/job change) or that you are trying to overspend.

    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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  • joel0622joel0622 Member Posts: 3,299
    The 5 points per inquiry deal is a myth, it is not true.
  • isellitisellit Member Posts: 15
    Normally a cash buyer will pay more for a car as listed on the buyers order.

    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.
  • wlbrown9wlbrown9 Member Posts: 867
    Do your research first, shopping next. If I go in with good info that my credit union will finance me for rock bottom rate (say 3.99% .. it was 4 years ago) I'll give the dealer a chance to match that if they start off higher. If they can bump the bank quote .5-1% and still beat my rate, then I've saved money. If they can not at least match the rate, I'll run the paperwork around. Last time I financed the dealership had a bank that to quote them "did not want to lose any loans". I told him my deal from the credit union (3.99%, no loan fee) so he pulled out his book that showed current local deals and verified the details and matched it. If they paid him a few $$ to get the loan that is between them.

    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'.
  • carbuyerwacarbuyerwa Member Posts: 2
    Please help as this is a little worrying and don't know what to do

    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.
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