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  1. #1
    Join Date
    Feb 2007
    Location
    North Country, New York State

    Why does Auto Dealer need Credit App for me to buy with cash?

    I'm active duty military currently stationed overseas. Will return in June and, on my behalf, my sister is trying to buy a used car from a well established Ford dealer in DC area.

    Dealer wants a power of attorney; makes sense. Dealer also says that despite my intention to buy in cash (~$10K) they still need to take a credit application. Cites 9/11.

    I've done some googling to read up on the why. However, I've found no mention of the requirement, nor any scams that seem to fit this scenario.

    Anybody have any insight?

    Thanks,
    BlueTeuf

  2. #2
    He probably doesn't care about your credit history or score - he just needs the information that the app will give him. I do recall there being an extensive amount of personal data needed from folks who make large cash purchasses or deposits - probably the credit app is a handy way for him to get the info he has to have all in one place. I bet he will find another way to do so if you show up at his dealership with cash and get up to leave when he can't be more flexible with the way you provide the data.

  3. #3
    Join Date
    Feb 2007
    Location
    Greenville, NC
    When I bought my car last summer, I paid cash. The dealer made me fill out a credit application, too, even though I had a certified check in hand.

  4. #4
    Join Date
    Feb 2007
    Location
    Lompoc, West Carolina
    They can always hope, can't they?

  5. #5
    Join Date
    Feb 2007
    Location
    North Country, New York State

    Just an application?

    Quote Originally Posted by CathyCA View Post
    When I bought my car last summer, I paid cash. The dealer made me fill out a credit application, too, even though I had a certified check in hand.
    Thanks - do you know if they actually ran a credit check? Or was it just information gathering?

  6. #6
    Join Date
    Feb 2008
    Location
    New Bern, NC unless it's a home football game then I'm grilling on Devil's Alley
    I thought that for any purchase for cash over $10K, the dealer had to report it too the government. This goes back to a tool the government uses to fight drug dealers. As stated above, the credit application probably includes all the info the dealer has to submit. Go buy a car for $9K, and see if it still applies. I bought one for $7K, and didn't have to fill out squat.
    Q "Why do you like Duke, you didn't even go there." A "Because my art school didn't have a basketball team."

  7. #7
    The dealer can do what he wants, but I don't believe there's anything in the Patriot Act that requires a credit check. After all, two private parties can transact a car in cash, and the guberment finds out about it anyway when the new owner registers the car. (OK, state guberment, but the feds can still get this info. *I* can get this info using Carfax if I know the VIN.)

    He probably wants some protection against the check being forged. Which happens.

    There are threads on creditboards.com about this. You might want to search there.

  8. #8
    Quote Originally Posted by CameronBornAndBred View Post
    I thought that for any purchase for cash over $10K, the dealer had to report it too the government.
    Yes, but "cash" means currency (paper with pictures of dead presidents in black and green ink), not anything already traceable such as cashier's checks.

  9. #9
    Join Date
    Feb 2007
    Location
    Clearwater, FL
    I bought my current car for cash about a year ago and they wanted a credit app. I refused (becasue it struck me as stupid) they made noises about not being able to sell the car without it, but when they thought I was going to leave they suddenlty decided to make an exception.
    Windsor (aka Loni)

    a wasted youth is better by far than a wise and productive old age

  10. #10
    Join Date
    Aug 2007
    Location
    Indiana
    Quote Originally Posted by BlueTeuf View Post
    I'm active duty military currently stationed overseas. Will return in June and, on my behalf, my sister is trying to buy a used car from a well established Ford dealer in DC area.

    Dealer wants a power of attorney; makes sense. Dealer also says that despite my intention to buy in cash (~$10K) they still need to take a credit application. Cites 9/11.

    I've done some googling to read up on the why. However, I've found no mention of the requirement, nor any scams that seem to fit this scenario.

    Anybody have any insight?

    Thanks,
    BlueTeuf
    Over the past couple years, I purchased two vehicles for around $20K each from different dealers. I paid for them in full with personal checks. Credit applications were never mentioned. I live in Indiana.

  11. #11
    Join Date
    Aug 2007
    Location
    Indiana

  12. #12
    Join Date
    Feb 2008
    Location
    New Bern, NC unless it's a home football game then I'm grilling on Devil's Alley
    Very cool find. Answers that question. I like the last line the best.
    Q "Why do you like Duke, you didn't even go there." A "Because my art school didn't have a basketball team."

  13. #13
    Join Date
    Feb 2007
    Location
    Greenville, NC
    Quote Originally Posted by BlueTeuf View Post
    Thanks - do you know if they actually ran a credit check? Or was it just information gathering?
    They ran a credit check and were shocked at my score. I don't think they'd seen one that high in a long time.

  14. #14
    How does it benefit the retailer to have you fill out a credit application if you have already stated ou intend to pay with cash? I can understand that if you were buying with credit they might want you to fill out an application at the start, so they would know what you will and will not qualify for, etc.

    I'm not doubting they do it, I'm just wondering why (assuming they are not trying to use your info for identity theft purposes, etc.).

  15. #15
    Join Date
    Feb 2007
    Location
    Greenville, NC
    Quote Originally Posted by allenmurray View Post
    How does it benefit the retailer to have you fill out a credit application if you have already stated ou intend to pay with cash? I can understand that if you were buying with credit they might want you to fill out an application at the start, so they would know what you will and will not qualify for, etc.

    I'm not doubting they do it, I'm just wondering why.

    I don't know why they do it, but they do. And some of us go right along with them.

  16. #16
    Join Date
    Feb 2007
    Location
    Watching carolina Go To HELL!
    Quote Originally Posted by allenmurray View Post
    How does it benefit the retailer to have you fill out a credit application if you have already stated ou intend to pay with cash? I can understand that if you were buying with credit they might want you to fill out an application at the start, so they would know what you will and will not qualify for, etc.

    I'm not doubting they do it, I'm just wondering why (assuming they are not trying to use your info for identity theft purposes, etc.).
    Well, some where along the process you might decide to finance part of the purchase, and dealers, especially the finance manager (who is the one who actually writes up the deal and gets the financing, as well as offering you the extended warranty and gap insurance (if you finance)) makes a lot of money if you do finance through them. That's why they want you to fill out the credit ap. If you've got a 720 plus score, they salivate. If you have a >550 score, they'll just let you pay cash (very quickly).
    Ozzie, your paradigm of optimism!

    Go To Hell carolina, Go To Hell!
    9F 9F 9F
    https://ecogreen.greentechaffiliate.com

  17. #17
    Quote Originally Posted by OZZIE4DUKE View Post
    Well, some where along the process you might decide to finance part of the purchase, and dealers, especially the finance manager (who is the one who actually writes up the deal and gets the financing, as well as offering you the extended warranty and gap insurance (if you finance)) makes a lot of money if you do finance through them. That's why they want you to fill out the credit ap. If you've got a 720 plus score, they salivate. If you have a >550 score, they'll just let you pay cash (very quickly).
    My wife and I are members of two different credit unions. When I have fnanced a car I told them that at the start and said, "this is the rate at which they are offerring me money - can you beat it?" Twice the person said, "no" and never talked to me about financing again, except to be quite helpful in faxing things over to the credit union. Once the person said, "actually, yes", and did (it was the same person all three times). On the other hand, I am one of the few people I know who actually likes the car dealership I deal with - or should I say dealt with. As a loyal and satisifed Saturn customer I hope all of the executives at GM go to an outdoor chilli festival on a day where the temperature reaches 110 degrees, and where the only restroom facilities are port-a-potties - then fall in and get stuck. It is what they deserve. http://www.businessweek.com/ap/finan.../D96FIDV80.htm

  18. #18
    Join Date
    Mar 2008
    Location
    raleigh
    personal checks and cashiers checks are not the same as cash. They must report to the IRS anytime they get 10K / year or more in CASH from the same client.

    the only other thing i could think of was, as car dealers do, is get you settled into one deal, and then try to super-size your order. Your credit check could give him the ballpark number for him to try to switch you up..




    i once picketed a car dealership for an entire week, when the owner himself came out to the sidewalk and said he wanted to get me in my car right away at the price agreed upon.

  19. #19
    Join Date
    Feb 2007
    Location
    Los Angeles
    Legally, I don't think that they can run a credit check without your express permission. I purchased a car about a year ago using a personal check and ran into this same issue, although I refused to let them run a credit check as too many pings hurt your credit score. I explained my reasoning to them, and after effectively promising to walk away (wish I had...the car market soon tanked) they agreed to skip the credit check. This was in CA.

  20. #20
    Join Date
    Feb 2007
    Location
    Lompoc, West Carolina
    Quote Originally Posted by Clipsfan View Post
    Legally, I don't think that they can run a credit check without your express permission. I purchased a car about a year ago using a personal check and ran into this same issue, although I refused to let them run a credit check as too many pings hurt your credit score. I explained my reasoning to them, and after effectively promising to walk away (wish I had...the car market soon tanked) they agreed to skip the credit check. This was in CA.
    Signing that application gives them permission for inquiry.

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