Buying a Vehicle with Cash, Check or Credit Card

Kirstie_HKirstie_H EdmundsAdministrator Posts: 11,132
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?

MODERATOR

Need help navigating? [email protected] - or send a private message by clicking on my name.

Share your vehicle reviews

«134

Comments

  • epineyepiney Member 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.
  • micosilvermicosilver Member Posts: 212
    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 Member 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 Member Posts: 3,299
    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 Member 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 WashingtonMember Posts: 20,350
    Exactly. That check is worth nothing if we can't cash it.
  • epineyepiney Member 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 Member Posts: 3,299
    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 Member Posts: 10,059
    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 Member 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.
  • british_roverbritish_rover Member Posts: 8,457
    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 Member Posts: 3,299
    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 Manahawkin, NJMember Posts: 10,379
    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.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • lrguy44lrguy44 Member 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 Member Posts: 3,299
    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 Member Posts: 2,197
    Also, we have to run a OFAC on every customer as part of the Patriot act.
  • carhag2000carhag2000 Member Posts: 207
    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 Member 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?
  • british_roverbritish_rover Member Posts: 8,457
    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 Member 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 Manahawkin, NJMember Posts: 10,379
    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.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • lrguy44lrguy44 Member 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 Member 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 Member 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 Manahawkin, NJMember Posts: 10,379
    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.
    2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
  • isellhondasisellhondas Issaquah WashingtonMember Posts: 20,350
    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 Member 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)
  • oldfarmer50oldfarmer50 Member Posts: 18,878
    "...two pigs and a goat..."

    SOLD! :)

    2019 Kia Soul+, 2015 Mustang GT, 2004 Chevy Van, 2000 Chrysler Sebring convertible

  • rob87rob87 Member 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 Member 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
  • mackabeemackabee Member Posts: 4,709
    I'm sure they verified the funds were in your account before letting you drive away.
    :)
    Mack
  • cdnpinheadcdnpinhead Forest Lakes, AZMember Posts: 5,164
    "If the deal is right we will take Russian rubles, two pigs and goat."

    This line, among others, is why I wish you were local, though I wouldn't wish living in this hellhole on anyone. We're a growing area (for reasons I can't begin to understand) & have tremendous turnover of both stores and those who inhabit them.

    Thanks for helping those of us on the other side of the table keep the faith that the store might be trustworthy.

    Seriously, if all dealerships did business as you describe it, life would be much better for many of us.
    '08 Acura TSX, '17 Subaru Forester
  • micosilvermicosilver Member Posts: 212
    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.

    Homeland security can scan your passport, pull your photo on the computer screen, and compare the two.
    Dealers do not have access to this database. We cannot confirm if your DL is real, or you bought it for $5 to buy beer when you were 12.
  • jmonroejmonroe Pittsburgh areaMember Posts: 8,989
    I'm sure they verified the funds were in your account before letting you drive away.

    I had similar situations as ‘rob87’ mentioned in post 17887.

    I bought in 2005 and 2006, two different dealers, both in the state of PA. I told each one that I was going to write a check and neither one asked to run a credit app. I have to admit I was surprised but if they didn’t care why should I ? In fact, in 2005 I didn’t have the funds transferred to my checking account at the time of sale so I said, “I guess I’ll have to come back tomorrow after the transfer and he said don’t worry about it, I’ll hold the check for a couple days just to give you some time”. :surprise:

    So my question is, why in 2005 when they knew I didn’t have the money in my account did they let me take the car? In 2006 I had the money in my checking account but how could they verify that.

    Both of these purchases surprised me, do I sound that trustworthy to you.? :)

    jmonroe

    '15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl

  • snakeweaselsnakeweasel a Certified Edmunds Poster.Member Posts: 17,975
    Not good enough. Driver's licenses can be faked and so can passports.

    But then again you could also be giving someone elses information for the credit application.

    2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D

  • kiawahkiawah Member Posts: 3,666
    Just bought a Suburban last week. Negotiated the deal on a handshake as I had to leave to pick up one of the kids. They prepped the vehicle the next morning, I came back in the afternoon with my old Suburban (the trade) and a personal check.

    Have the paperwork in front of me. Only things signed were the bill of sale, 2 state odometer disclosure statements, 1 state damage disclosure statement, the title to the trade, and the check. Cleanest simplest deal I've ever done. Hadn't stepped foot into the dealership before that purchase.

    My prior purchase was a Toyota with a certified bank check draw as cash and no trade, I thought I was at a house closing. I had more ridiculous forms to sign than I could even think were needed.

    Both had a copy of drivers license, insurance card, and in the case of my trade the owners card.

    No idea why the difference.
  • jmonroejmonroe Pittsburgh areaMember Posts: 8,989
    My prior purchase was a Toyota with a certified bank check draw as cash and no trade, I thought I was at a house closing. I had more ridiculous forms to sign than I could even think were needed.

    No idea why the difference.


    Haven't you been paying attention to anything that was said here today...IT'S THE LAW, remember? :confuse:

    jmonroe

    '15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl

  • kiawahkiawah Member Posts: 3,666
    Well my gut tells me it's not the "Law" .....it's the "lawyers" setting the rules that they want to do business under.

    But then, I am in NC (moon shine country)
  • mackabeemackabee Member Posts: 4,709
    Yep, and if you pay with dead presidents then we have to report to the IRS any amounts over 10k. Just to make sure we're keeping you honest and you're not laundering money.
    ::
    :)
    ( $ )
    Mackabee
  • mackabeemackabee Member Posts: 4,709
    Yeah, but can you pull an OFAC when you're pulling PUD?
    :blush:
    Mackabee
  • epineyepiney Member Posts: 462
    C'mon Mack. This is almost as bad as us labeling all of you guys dishonest and cheats. Just because I am leary of spread of personal information and privacy does not mean that I have anything to hide. I have no problem providing information that is necessary. But do I have complete faith that my personal information will be protected? Sorry I don't. All of those banks swore up and down they protect personal data. What happened?

    The issues of identity and payment are red herrings. Of course you need reasonable verification of identity and surety of payment, that's obvious. If you want to verify funds in the bank or use other means, I'm OK with that.

    But I think we have probably beat this horse to death :P Just because we careful with our personal information and privacy, does not mean we are terrorists or deadbeat thieves ; just like all cars sales folks aren't liars and cheats ;)

    BTW: Mack, the Lexus dealer canceled the IS350 sale; your credit bounced and the doc fee was $1000 :blush:
  • im_brentwoodim_brentwood Member Posts: 4,883
    I have never owned a store in NC.. so I have no idea. I'm sure the law varies from state to state, hence my gving FL as an example.
  • jmonroejmonroe Pittsburgh areaMember Posts: 8,989
    Yeah, but can you pull an OFAC when you're pulling PUD?

    With that I'm going to bed...with a smile on my face. :)

    See you guys in the morning, if that ain't against the law. :P

    jmonroe

    '15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl

  • mackabeemackabee Member Posts: 4,709
    Jeez Louise! are you and delta related??
    :mad:
    Mack
  • mackabeemackabee Member Posts: 4,709
    You are right. Maybe we should have defined the word "Cash"
    To us in the biz we deal with customers all the time that tell us they are paying cash when in reality they have a draft from their credit union or check from their bank or personal check and not cash as in the green paper with pictures on it. Like LR said, we sell cars when banks are closed and no way to verify funds.
    BTW: my credit does not "bounce" it's Tier 1 or Tier 1 + Thank you very much. :)
    They told me they would subtract the doc fee from the price of the car so go back and get it before they change their mind. ;)
    Mack
  • user777user777 Member Posts: 3,341
    No, AMEX's program excludes automobile purchases. :cry:
  • snakeweaselsnakeweasel a Certified Edmunds Poster.Member Posts: 17,975
    Jeez Louise! are you and delta related??

    Pardon?

    All I am saying that yes drivers licenses and passports can be forged. But you can also walk in with someone elses name address and SSN. Just because I say my name is Joe Smith I live at 123 Fake street in Springfield and my SSN is 123-45-6789 doesn't mean that I am them.

    2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D

  • dino001dino001 Tampa, FLMember Posts: 6,009
    I don't know why people are so paranoid to have their credit pulled when buying a car at a reputable dealer.

    Because each inquiry impacts the person's score. Do it once or twice, doesn't matter; do it five or ten times, suddenly 750 score slides down.

    So there is no problem in pulling record when already buying a car, but I see no reason of having to give up your SSN just to get a price and trade offers and even good faith payment estimate with clear disclosure that it is WAC.

    2018 430i Gran Coupe

  • lrguy44lrguy44 Member Posts: 2,197
    The discussion was not about doing a credit app to get a price. It was about doing a credit app when paying cash. At that point the deal is done - one inquiry and over. However, I have seen people (usually credit challenged to begin with) that have 15 inquiries from dealers and banks over a 2 week period. That tells me something as well.
  • dino001dino001 Tampa, FLMember Posts: 6,009
    Yeah, I see. Well - it's kind of strange asking for credit application when paying by cash.

    When withdrawing large amounts of money, bank teller asks you for two IDs. Similar when getting driver's license, biometric readings for immigration, getting to a high-stake exam and many other functions where identification is important. If it's enough to get 20K out of your account and perform all other functions, shouldn't that be enough to buy a car?

    It sounds to me like a classic CYA case. Pointless, unnecessary, but it doesn't really hurt, so why not do it, just in case...

    Everything could be forged and checking somebody's credit would not change that.

    2018 430i Gran Coupe

This discussion has been closed.