Paying cash for a new car... should I let them run my credit?

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cenvin
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Paying cash for a new car... should I let them run my credit?

Post by cenvin »

I'm planning on buying a new car with cash (cashier's check or personal check).

I'm not interested in dealership financing, or any of the high margin junk they try to sell you in F&I (such as "protection packages", extended warranties, VIN etching, etc) and I don't have a trade-in.

I'm also not terribly keen on playing the game of hiding the fact that I'm paying cash until the last minute so as to try to negotiate a better deal by giving them (false) hope that they might profit from all of the above (which I plan to decline).

Yes, amazingly, I “just want to buy a car”. But I fully realize that mission is 100% incompatible with their business model.

Some dealerships try to say they need a credit app (and my SSN) in order to satisfy “federal requirements/Patriot Act” (to my knowledge not true because there are no SSN's on OFAC SDN list) or for vehicle registration purposes (also not true to my knowledge because the DMV new vehicle registration form only requires my driver's license number, not my SSN), or because I'm paying “cash” and they must file IRS form 8300 (also not true to my knowledge because a cashiers check over $10k is not considered cash by the IRS, hence no need to file form 8300).

Those kinds of shenanigans aside, they can legitimately argue they need a backup form of funding in case my check bounces. But I'm paying with a cashiers check and I'm willing to let them hold the car at the dealership until they verify that the funds are in their account.

To my knowledge, all that is really required to buy a car is:
1. My full name and address
2. My driver's license
3. My proof of auto insurance
4. My payment for the car

I'm just trying to decide if being “cooperative” and letting the dealership run my credit anyway will make the process less stressful for me than fighting with them over this matter.
Last edited by cenvin on Wed Aug 05, 2020 6:08 pm, edited 1 time in total.
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samsoes
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Re: Paying cash for a new car... should I let them run my credit?

Post by samsoes »

Did they ask to run your credit, or are you anticipating that which might not happen?
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cenvin
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Re: Paying cash for a new car... should I let them run my credit?

Post by cenvin »

Based on experience...
My first dealership car purchase they ran my credit even though I paid cash (cashiers check from credit union). My second purchase (referred through a broker but at a dealership), I also paid with a cashier's check from a credit union but they had me partially fill out a credit application as a backup, though they never actually ran my credit. He insisted that their credit app was their purchase contract - that the two are one in the same - and that they had no other form or separate purchase contract I could fill out.
Last edited by cenvin on Fri Jul 31, 2020 8:18 pm, edited 1 time in total.
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Watty
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Re: Paying cash for a new car... should I let them run my credit?

Post by Watty »

I bought my last car with a personal check and they wanted my SSN and had me sign paperwork that would allow them to check my credit score to see if I was a deadbeat and to get a car loan for me if my check bounced. That was understandable to me and I did not worry about it since I was paying with a personal check.

In addition to that they also have a service from a credit bureau which allowed them to ask me several questions to verify my identity. They were very concerned about identity theft and it sounded like car dealers have gotten burned with that.

I actually failed that because the questions were so obscure. Later on I figured out that one of them was asking something like if I had ever lived 120th st, 128th street or 118th st. At the time I did not remember any of them so I selected "none of the above". Later on I realized that they were asking about an apartment I had lived in for six months over 25 years ago. The other questions were equally obscure. When I picked up the car a few days later I brought in my passport to verify my identity.

Anyway I am sure that they will still sell you a car without getting your SSN but you will likely have some more hoops to jump through. If you have a passport you might want to bring that with you.
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Re: Paying cash for a new car... should I let them run my credit?

Post by livesoft »

I negotiated a cash price for a used car and had my check book out. But they gave me a $0 money down, 0% interest rate loan, no payments for 60 days.

You might use this to your advantage: After all the negotiation and you have your cashier's check, ask them how much lower a price they will charge if you get a 0% loan from them. That is, a loan is not necessarily an evil thing to be avoided, is it? And you might as well make them pay you to "run my credit."
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Re: Paying cash for a new car... should I let them run my credit?

Post by RetiredCSProf »

I recently purchased a new car. The manufacturer was offering a $2,000 rebate on the condition that I lease the car or finance a loan through their financial services.

One dealership told me that I would receive the rebate if I borrowed at least $10,000 on the vehicle and made at least 4 payments (that is, keep the loan for least 5 months). I purchased through a different dealership who told me, as I was signing the papers, that I would need to make at least 5 payments (keep the loan at least 6 months).

I was planning to take a loan, anyway. What surprised me is that they did two credit checks: (1) the dealership and (2) the manufacturer's financial services. The hard inquiries dropped my credit score by 5 points.
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Re: Paying cash for a new car... should I let them run my credit?

Post by Raybo »

If you lock your credit before going to the dealership, they won’t be able to check your credit without you unlocking it first.
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Re: Paying cash for a new car... should I let them run my credit?

Post by beyou »

Just say no.
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Re: Paying cash for a new car... should I let them run my credit?

Post by UpperNwGuy »

The last time I bought a car they ran my credit and then gave me a pitch about why I should get a car loan instead of paying cash. I assumed that running my credit was a marketing gimmick to allow them to make that pitch.
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Re: Paying cash for a new car... should I let them run my credit?

Post by stan1 »

Raybo wrote: Fri Jul 31, 2020 9:24 pm If you lock your credit before going to the dealership, they won’t be able to check your credit without you unlocking it first.
Yes, this is what I do. I told sales guy I'd have to go home and figure out how to unlock it, which could take me a few days as I had never done it before. He said it wouldn't be necessary.
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Re: Paying cash for a new car... should I let them run my credit?

Post by JBTX »

In 2013 I bought a new car, with several factory incentives. One was a$1500 credit for financing. So I financed the minimum of about $7500, got the credit, and paid the loan off in about 3 months. If they want to give you money to take their money, by all means keep an open mind.
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cenvin
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Re: Paying cash for a new car... should I let them run my credit?

Post by cenvin »

stan1 wrote: Fri Jul 31, 2020 9:34 pm
Raybo wrote: Fri Jul 31, 2020 9:24 pm If you lock your credit before going to the dealership, they won’t be able to check your credit without you unlocking it first.
Yes, this is what I do. I told sales guy I'd have to go home and figure out how to unlock it, which could take me a few days as I had never done it before. He said it wouldn't be necessary.
Glad someone brought this up. I froze my credit reports after the Equifax breach. So, yeah, I'd need to unfreeze (thaw? :D ) and that's another inconvenience.

I prefer the least complex transaction possible. That's why I prefer no trade-in, no financing, no dealer add-ons, and no leases. Which is in exact opposition to what the dealership wants. They are seeking the most complex and time consuming transaction possible. It gives them more opportunities for wearing you down and manipulation and I want to deny them that. I don't want to play games, I just want to buy a car.
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cenvin
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Re: Paying cash for a new car... should I let them run my credit?

Post by cenvin »

JBTX wrote: Fri Jul 31, 2020 9:42 pm In 2013 I bought a new car, with several factory incentives. One was a$1500 credit for financing. So I financed the minimum of about $7500, got the credit, and paid the loan off in about 3 months. If they want to give you money to take their money, by all means keep an open mind.
I don't trust my contract reading skills well enough to be sure what I'm signing doesn't have some hidden early loan pay-off penalty. It's just not worth it to me.
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Re: Paying cash for a new car... should I let them run my credit?

Post by JBTX »

cenvin wrote: Fri Jul 31, 2020 9:54 pm
JBTX wrote: Fri Jul 31, 2020 9:42 pm In 2013 I bought a new car, with several factory incentives. One was a$1500 credit for financing. So I financed the minimum of about $7500, got the credit, and paid the loan off in about 3 months. If they want to give you money to take their money, by all means keep an open mind.
I don't trust my contract reading skills well enough to be sure what I'm signing doesn't have some hidden early loan pay-off penalty. It's just not worth it to me.
I don't recall it being that difficult. I probably just asked the question and perused the paperwork. For $1500 it was worth it.
runner3081
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Re: Paying cash for a new car... should I let them run my credit?

Post by runner3081 »

I bought a car on CC back in November. They said they "had" to run credit to take CC payment for the full amount.

Oh well, I let them.

No plans to buy a house and the CC cash back was worth the hard inquiry!
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Re: Paying cash for a new car... should I let them run my credit?

Post by jabberwockOG »

JBTX wrote: Fri Jul 31, 2020 9:42 pm In 2013 I bought a new car, with several factory incentives. One was a$1500 credit for financing. So I financed the minimum of about $7500, got the credit, and paid the loan off in about 3 months. If they want to give you money to take their money, by all means keep an open mind.
This is a good excuse to give. Another is to just say no, and let them know you may decide to pay cash or take a loan, but that decision will be made after a final drive out price has been accepted. If there is an incentive for a loan ask them to provide their best price on both cash and loan options. Let them know that any BS from them, and you hang up the phone and go do business with a more cooperative and transparent dealership.
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Re: Paying cash for a new car... should I let them run my credit?

Post by suemarkp »

How many trips do you want to make to the dealer? If they run your credit, you can leave with the car that visit even if you aren't financing. I've paid "cash" (cashiers check or personal check actually) for my last 3 cars. All let me leave that day once they knew my credit was good. I just had to get them a check within 3 business days.

I don't care about a credit inquiry. If my score drops from 820 to 815 for a month, it isn't a big deal to me.
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Re: Paying cash for a new car... should I let them run my credit?

Post by Normchad »

When I've done this, they also wanted to run a credit check. I asked about it, and they said they needed to be sure that my personal check wasn't bogus. (It doesn't actually do that, but I suppose I see their side of it).

My credit was locked, and I tried to unlock it at the dealers. It was a holiday weekend, I have zero idea what the password is, etc. So I just told them, I can't unlock it. (Also good to know that you can't unlock your credit by smooth talking people on the phone).

Finally, they accepted me just showing them my bank balance from a banking app on my phone.

So, yeah, I'd let them do it. I see their point; they don't want to give you a new car and get stuck with a fraudulent check. I don't like it, but I don't see a problem with letting them do it.
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Re: Paying cash for a new car... should I let them run my credit?

Post by eye.surgeon »

I've bought new and used cars for cash many times and never had my credit run. Don't undermine your negotiating power by telling them up front you are paying cash , but this doesn't mean you are playing a game. Simply answered their question as to whether I would finance with a simple "it depends on the cost of money". And don't let them run your credit, simply tell them your FICA score is 750+, they don't need to run it anyways until it's time to finance and by then you've stated you're paying cash.
Last edited by eye.surgeon on Fri Jul 31, 2020 11:24 pm, edited 1 time in total.
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eye.surgeon
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Re: Paying cash for a new car... should I let them run my credit?

Post by eye.surgeon »

suemarkp wrote: Fri Jul 31, 2020 11:12 pm How many trips do you want to make to the dealer? If they run your credit, you can leave with the car that visit even if you aren't financing. I've paid "cash" (cashiers check or personal check actually) for my last 3 cars. All let me leave that day once they knew my credit was good. I just had to get them a check within 3 business days.

I don't care about a credit inquiry. If my score drops from 820 to 815 for a month, it isn't a big deal to me.
While I would agree a credit drop is no big deal to most people here, a hard credit check stays on your credit report for 2 years, not a month. And for those with marginal credit, it can make a difference.
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Re: Paying cash for a new car... should I let them run my credit?

Post by investor4life »

Consider putting as much as possible (typically 2K-5K) of the payment on a credit card to avail of the points/miles/cash back. I have done this several times over the years and have always paid cash for the rest. And, no...never have had a credit check done.
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Re: Paying cash for a new car... should I let them run my credit?

Post by cenvin »

Normchad wrote: Fri Jul 31, 2020 11:16 pmI see their point; they don't want to give you a new car and get stuck with a fraudulent check.
I get that, but I already addressed this concern in my OP. If the dealership is worried at all, I'm happy to let them keep the car until the funds clear my account.
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Re: Paying cash for a new car... should I let them run my credit?

Post by Cyclesafe »

I paid cash for two cars at the same dealership five years apart. Both times they insisted on me providing credit info; both times I stuck with "no". The dealership spends every moment after closing a deal to extract more money from their customer. It can be confrontational at times to resist and you have to be willing to walk away without a car.

I agree that with cars that could be attractive to drug kingpins and other money launderers, there is perhaps a legitimate concern on the part of the dealer that there could be claw-back in the future.

BTW, beyond the salesman in the process, the employees I dealt with successively were downright hostile.
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Re: Paying cash for a new car... should I let them run my credit?

Post by anon_investor »

cenvin wrote: Sat Aug 01, 2020 3:50 am
Normchad wrote: Fri Jul 31, 2020 11:16 pmI see their point; they don't want to give you a new car and get stuck with a fraudulent check.
I get that, but I already addressed this concern in my OP. If the dealership is worried at all, I'm happy to let them keep the car until the funds clear my account.
No good reason to run your credit it you are paying cash. I would push back.
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Re: Paying cash for a new car... should I let them run my credit?

Post by skibummer »

By paying with a cashier's check the check is being taken out of the bank's account. Your bank verifies your funds and moves funds from your account to their account so no possibility of a cashier's check coming back as NSF. Have them verify with the bank and keep your credit frozen. I just did the same 2 weeks ago buying a Toyota and they insisted on running credit. I told them no, showed them the check and said I would walk out the door in 30 sec unless they stopped these shenanigans. They want to do this so they can push you over to finance. No legal obligation to do this and the Patriot Act can be verified with ID. The F&I guy is a joker who wants to extract back as much of the good deal you just negotiated. Stand firm. No credit check with a cashier's check.
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cenvin
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Re: Paying cash for a new car... should I let them run my credit?

Post by cenvin »

Cyclesafe wrote: Sat Aug 01, 2020 7:05 am you have to be willing to walk away without a car
I fully agree. This is the mindset required. I absolutely cannot be desperate to buy the car. I must keep in mind that I have other options and be perfectly happy to leave without a car.
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cenvin
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Re: Paying cash for a new car... should I let them run my credit?

Post by cenvin »

skibummer wrote: Sat Aug 01, 2020 8:05 am By paying with a cashier's check the check is being taken out of the bank's account. Your bank verifies your funds and moves funds from your account to their account so no possibility of a cashier's check coming back as NSF. Have them verify with the bank and keep your credit frozen. I just did the same 2 weeks ago buying a Toyota and they insisted on running credit. I told them no, showed them the check and said I would walk out the door in 30 sec unless they stopped these shenanigans. They want to do this so they can push you over to finance. No legal obligation to do this and the Patriot Act can be verified with ID. The F&I guy is a joker who wants to extract back as much of the good deal you just negotiated. Stand firm. No credit check with a cashier's check.
Thanks very much! That's exactly what I want to do.
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Re: Paying cash for a new car... should I let them run my credit?

Post by Superleaf444 »

*delete*
Last edited by Superleaf444 on Thu Aug 27, 2020 9:42 am, edited 1 time in total.
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Re: Paying cash for a new car... should I let them run my credit?

Post by Lafder »

We bought a car with a check last September so almost a year ago and they insisted on a credit check. They said it was a rule to prove we are who we say we are and we are not laundering money or something like that.

We had arranged ahead to buy the car and asked if they needed a cashier's check and they said no, a personal check was fine.

Perhaps if we got up to go they would have backed down. I did argue against it and they insisted it was part of the banking/money rules or something...........

I will be curious to hear your experience if you refuse.

lafder
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Re: Paying cash for a new car... should I let them run my credit?

Post by michaeljc70 »

Sure, let them run it if you want a hit to your credit score and want them to try and sell you all kinds of financing options. Locking all 3 credit reports seems harder than just telling them no.
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cenvin
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Re: Paying cash for a new car... should I let them run my credit?

Post by cenvin »

Lafder wrote: Sat Aug 01, 2020 6:09 pm We bought a car with a check last September so almost a year ago and they insisted on a credit check. They said it was a rule to prove we are who we say we are and we are not laundering money or something like that.
To my knowledge, the money laundering issue is addressed by the IRS form 8300 rules, not by requiring a consumer credit application...

Copied and pasted from IRS Form 8300 instructions below:
Cash. The term “cash” means the following.

• U.S. and foreign coin and currency received in any transaction; or

• A cashier’s check, money order, bank draft, or traveler’s check having a face amount of $10,000 or less that is received in a designated reporting transaction (defined below), or that is received in any transaction in which the recipient knows that the instrument is being used in an attempt to avoid the reporting of the transaction under either section 6050I or 31 U.S.C. 5331.

Note. Cash does not include a check drawn on the payer’s own account, such as a personal check, regardless of the amount.

Also, from IRS Publication 1544:
A cashier's check, bank draft, traveler's check, or money order with a face amount of more than $10,000 is not treated as cash. These items are not defined as cash and you do not have to file Form 8300 when you receive them because, if they were bought with currency, the bank or other financial institution that issued them must file a report on FinCEN Report 112.

Based on this information, it seems to me if I am paying with a personal check (of any amount), or a cashiers check of more than $10k, they don't need to file IRS Form 8300, and therefore they don't need my SSN (or a credit application) for that purpose.
Last edited by cenvin on Sat Aug 01, 2020 7:06 pm, edited 1 time in total.
Normchad
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Re: Paying cash for a new car... should I let them run my credit?

Post by Normchad »

Do you want to buy a car or not? If you don't like this dealer, go to another one and see what they say.

I don't know why people would get bent out of shape over having their credit checked.

I'm trying to sign up for FiOS right now, and they require a credit check as well. I don't see this as any big deal....
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Re: Paying cash for a new car... should I let them run my credit?

Post by BionicBillWalsh »

Buy a Tesla online. You can pay without any of the dealer BS.
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Re: Paying cash for a new car... should I let them run my credit?

Post by stoptothink »

Normchad wrote: Sat Aug 01, 2020 7:03 pm Do you want to buy a car or not? If you don't like this dealer, go to another one and see what they say.

I don't know why people would get bent out of shape over having their credit checked.

I'm trying to sign up for FiOS right now, and they require a credit check as well. I don't see this as any big deal....
+1. There are a million things to be annoyed about with the current car-buying paradigm, IMO this isn't one of them. I walked in with a check to purchase our last car in cash, they immediately asked to run my credit. Big deal.
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Re: Paying cash for a new car... should I let them run my credit?

Post by illumination »

I had the same thing happen to me, in fact, I couldn't take the car home because they needed to run my credit despite paying cash (check that they could verify). They cited money laundering type laws, I just went along, it was a good deal and I didn't want to blow it up over that. Never really understood why, but I have to think dealers aren't going to do unnecessary paperwork and slow a deal down unless they have to.
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Re: Paying cash for a new car... should I let them run my credit?

Post by cenvin »

illumination wrote: Sat Aug 01, 2020 8:28 pm I had the same thing happen to me, in fact, I couldn't take the car home because they needed to run my credit despite paying cash (check that they could verify). They cited money laundering type laws, I just went along, it was a good deal and I didn't want to blow it up over that.
The way I see this is, it is not you the consumer, but rather the car dealer who is trying to "blow it up" by dishonestly and manipulatively conflating two totally unrelated things, those being your credit score and your status as a non-money launderer, and attempting to get away with it! They don't need your credit app to bounce your name off the OFAC SDN list.
illumination wrote: Sat Aug 01, 2020 8:28 pm Never really understood why, but I have to think dealers aren't going to do unnecessary paperwork and slow a deal down unless they have to.
On the contrary, my understanding is that their entire business model is based on attempting to slow the deal down as much as possible and introduce as much complexity into the paperwork as possible. Why make things simple and easy to understand for the consumer? There is no possibility of profit in that! :)
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Re: Paying cash for a new car... should I let them run my credit?

Post by denovo »

cenvin wrote: Fri Jul 31, 2020 7:43 pm I'm planning on buying a new car with cash (cashier's check).

I'm not interested in dealership financing, or any of the high margin junk they try to sell you in F&I (such as "protection packages", extended warranties, VIN etching, etc) and I don't have a trade-in.

I'm also not terribly keen on playing the game of hiding the fact that I'm paying cash until the last minute so as to try to negotiate a better deal by giving them (false) hope that they might profit from all of the above (which I plan to decline).

Yes, amazingly, I “just want to buy a car”. But I fully realize that mission is 100% incompatible with their business model.

Some dealerships try to say they need a credit app (and my SSN) in order to satisfy “federal requirements/Patriot Act” (to my knowledge not true because there are no SSN's on OFAC SDN list) or for vehicle registration purposes (also not true to my knowledge because the DMV new vehicle registration form only requires my driver's license number, not my SSN), or because I'm paying “cash” and they must file IRS form 8300 (also not true to my knowledge because a cashiers check over $10k is not considered cash by the IRS, hence no need to file form 8300).

Those kinds of shenanigans aside, they can legitimately argue they need a backup form of funding in case my check bounces. But I'm paying with a cashiers check and I'm willing to let them hold the car at the dealership until they verify that the funds are in their account.

To my knowledge, all that is really required to buy a car is:
1. My full name and address
2. My driver's license
3. My proof of auto insurance
4. My payment for the car

I'm just trying to decide if being “cooperative” and letting the dealership run my credit anyway will make the process less stressful for me than fighting with them over this matter.
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Re: Paying cash for a new car... should I let them run my credit?

Post by Swansea »

I paid cash by writing a check from my Vanguard Money Market. There was no problem and no discussion of a credit check.
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Re: Paying cash for a new car... should I let them run my credit?

Post by Mr. Rumples »

If you can pay cash, I don't see any reason to run your credit report. If the say the law requires it, they should be able to provide the statute. If they say it's company policy, the policy is not law and should refer to the statute. Giving someone your social security number is giving them the keys to your life. Just this week I got a letter from TCW that they were hacked. Now if TCW which manages over $200 billion can get hacked does anyone think the local car dealership is more secure?
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Re: Paying cash for a new car... should I let them run my credit?

Post by BeachPerson »

Watch this from a former car salesman

Kevin Hunter - Do not say paying cash!!!!

Dealers make more $$ with financing than the car sale, trade in, and service. They hate cash buyers. They cannot get the other add ins if you pay cash.

Watch all of Kevin's videos. They are super!!!
Last edited by BeachPerson on Sun Aug 02, 2020 6:49 am, edited 1 time in total.
From Jack Brennan's "Straight Talk on Investing", page 23 "Living below your means is the ultimate financial strategy"
hudson
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Re: Paying cash for a new car... should I let them run my credit?

Post by hudson »

Cenvin,
If I didn't want them to run my credit, I would seek out the final best "out the door" (OTD) deals from say 2-3 dealers. Then I'd call the dealer with the best deal and tell them that I'm ready to buy if the conditions are right. See if they'll agree to your terms before you make a deal. If dealer one doesn't go along, go to the next dealer.
I only negotiate by phone....or email...or text....not in person.

Off the subject: The next time that I buy a new vehicle, after I get that final OTD price, I'm going to specify that they don't try to sell me any loans or extended warranties, etc....before I make a deal.

I don't care if they check my credit or not; I want their best OTD price. I've only been asked for my social security number after making a deal.
Last edited by hudson on Sun Aug 02, 2020 10:08 am, edited 3 times in total.
hdcd
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Re: Paying cash for a new car... should I let them run my credit?

Post by hdcd »

My son was buying a car and put down a 2k deposit as it was a holiday weekend and he really wanted the car. He was already approved for the loan through the credit union and they were set to send over a certified check after the holiday. The entire process, the dealer insisted they run his credit. Told us it would take 2 weeks to process the DMV, The credit union check wasn't a guaranteed payment, etc. They threw every excuse in the book at us to run his credit. We kept saying no. Come Monday, he got his car, the DMV title was handled in a timely fashion, and no issues once they got their check. Just say no. In our state, if you don't agree to the credit check, and they run it anyways, they open themselves up to a lawsuit.
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ClevrChico
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Re: Paying cash for a new car... should I let them run my credit?

Post by ClevrChico »

beyou wrote: Fri Jul 31, 2020 9:27 pmJust say no.
+1 to this. I believe this is simply a way to qualify you as a buyer, and unnecessary if you're paying cash. This avoids getting to the 11th hour of negotiations and then learning the customer can't pay for the car. (They hate that!) By confirming good credit, they now have the opportunity to upsell you on everything. It dings your credit a bit at the benefit of the dealer.

I walked out of the last dealer that tried this. (When I was dumb and didn't go the online route.)
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beyou
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Re: Paying cash for a new car... should I let them run my credit?

Post by beyou »

hdcd wrote: Sun Aug 02, 2020 8:18 am My son was buying a car and put down a 2k deposit as it was a holiday weekend and he really wanted the car. He was already approved for the loan through the credit union and they were set to send over a certified check after the holiday. The entire process, the dealer insisted they run his credit. Told us it would take 2 weeks to process the DMV, The credit union check wasn't a guaranteed payment, etc. They threw every excuse in the book at us to run his credit. We kept saying no. Come Monday, he got his car, the DMV title was handled in a timely fashion, and no issues once they got their check. Just say no. In our state, if you don't agree to the credit check, and they run it anyways, they open themselves up to a lawsuit.
If you freeze your credit reports as you should, then you don’t give them the opportunity to break that law.
hdcd
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Re: Paying cash for a new car... should I let them run my credit?

Post by hdcd »

beyou wrote: Sun Aug 02, 2020 10:43 am
hdcd wrote: Sun Aug 02, 2020 8:18 am My son was buying a car and put down a 2k deposit as it was a holiday weekend and he really wanted the car. He was already approved for the loan through the credit union and they were set to send over a certified check after the holiday. The entire process, the dealer insisted they run his credit. Told us it would take 2 weeks to process the DMV, The credit union check wasn't a guaranteed payment, etc. They threw every excuse in the book at us to run his credit. We kept saying no. Come Monday, he got his car, the DMV title was handled in a timely fashion, and no issues once they got their check. Just say no. In our state, if you don't agree to the credit check, and they run it anyways, they open themselves up to a lawsuit.
If you freeze your credit reports as you should, then you don’t give them the opportunity to break that law.
They are frozen. Would love to give them the opportunity to break the law.
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whodidntante
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Re: Paying cash for a new car... should I let them run my credit?

Post by whodidntante »

Soft pulls are sometimes done for identity verification purposes. I don't think there is any legal requirement they do that, but it might be reasonable in an area with lots of fraud and money laundering like Florida. Hard pulls are done if you are asking for credit.

I bought a car four years ago. I got a cashier's check from a local credit union and paid $2,500 with a credit card. I was upfront that I would be financing elsewhere. I probably had to tell them twice, but then they accepted my answer. They never asked to run my credit. If they had asked me to do a credit pull, it would not have impacted my credit score regardless because I had recently applied for a loan, so I would have allowed it. But I would probably have disputed a hard pull just for entertainment purposes because I had not applied for credit through them.
illumination
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Re: Paying cash for a new car... should I let them run my credit?

Post by illumination »

cenvin wrote: Sun Aug 02, 2020 4:06 am
illumination wrote: Sat Aug 01, 2020 8:28 pm I had the same thing happen to me, in fact, I couldn't take the car home because they needed to run my credit despite paying cash (check that they could verify). They cited money laundering type laws, I just went along, it was a good deal and I didn't want to blow it up over that.
The way I see this is, it is not you the consumer, but rather the car dealer who is trying to "blow it up" by dishonestly and manipulatively conflating two totally unrelated things, those being your credit score and your status as a non-money launderer, and attempting to get away with it! They don't need your credit app to bounce your name off the OFAC SDN list.
illumination wrote: Sat Aug 01, 2020 8:28 pm Never really understood why, but I have to think dealers aren't going to do unnecessary paperwork and slow a deal down unless they have to.
On the contrary, my understanding is that their entire business model is based on attempting to slow the deal down as much as possible and introduce as much complexity into the paperwork as possible. Why make things simple and easy to understand for the consumer? There is no possibility of profit in that! :)

I think the problem is, I don't really know the law. There are all sorts of laws that have been passed regarding money laundering in the last few years, and for me to blow up a deal when perhaps there is some rule, either state, federal or internal to the dealership, I just don't know. I don't want to be tilting against windmills when in fact the dealership may just be following what they are required to do and it's nothing nefarious.

Usually salesman want a deal closed ASAP, most don't want to give you the time of day unless you are going to buy TODAY, so to slow down a deal where I walk out without closing (even though I can) it would seem really contrary to their interests.

Regardless, I paid cash for car with no loan and got it around $5,000 less than other ones I had looked at. I just had to wait a day. I never really understood why it was done that way. I could sort of understand if I came in literally with $100 bills, but not a check.
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AAA
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Re: Paying cash for a new car... should I let them run my credit?

Post by AAA »

A while back, we were at a dealership on a Friday and agreed on a car and price. We were paying cash and I said we'd be back on Monday with the check. They told us to take the car anyhow, which we did, and we returned Monday with the check. I thought at the time that was quite unusual.

More recently, we were buying another car and paying cash. In doing the paperwork, the dealer asked for our Soc. Sec. numbers, saying it was required for DMV papers. We reluctantly gave them (something I wouldn't do today) and later found out by calling the DMV that they were not necessary. If you are paying cash there should be no reason for doing a credit check, especially, as you say, you are willing to wait until the check clears. Are they willing to lose the deal over this?

By the way, I am in total agreement with you about just paying cash and getting out of there as quickly as possible. The last car we bought they led us into another room where the guy tried to push all sorts of extras on us. If we buy another car at the same dealer (which would be our fourth from them), I will simply refuse to discuss any further offers.
hudson
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How bad are credit checks?

Post by hudson »

How big of a deal is it when a dealer checks your credit? It doesn't dip down that bad does it?
I've seen my drop say 20 points in a month where I put too much on one credit card. It came back to where it was the next month.
My credit score according to my Amazon Chase Card web page was still OK. From what I've read, if I got a loan, the rates would be OK.
As a retiree, I'm probably done with credit except for credit cards.
I think insurance companies check credit when they issue or re-issue a policy. I've heard that they don't use the big 3 credit agencies.

Bottom Line, Are credit scores over-rated?
Boglegirl81
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Re: Paying cash for a new car... should I let them run my credit?

Post by Boglegirl81 »

RetiredCSProf wrote: Fri Jul 31, 2020 8:47 pm I recently purchased a new car. The manufacturer was offering a $2,000 rebate on the condition that I lease the car or finance a loan through their financial services.

One dealership told me that I would receive the rebate if I borrowed at least $10,000 on the vehicle and made at least 4 payments (that is, keep the loan for least 5 months). I purchased through a different dealership who told me, as I was signing the papers, that I would need to make at least 5 payments (keep the loan at least 6 months).
My boyfriend did this recently too - it was ~$3200 rebate so he financed $10k and then paid it off right away. I don’t think he was even required to make a certain number of payments. $3200 is a lot of money...
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