Does Dealer have to check credit if you pay by check?
#31
Moderator
iTrader: (16)
The reason is that your personal check may bounce, or you can stop payment on it after you have taken delivery of the car. Thats why they want to do a credit app when paying for a personal check, to make sure you're for real but mostly so they can track you down if your check winds up being no good.
I don't really blame them with a personal check. This happened to me once. I worked out a deal to buy a car over email/phone and drove 50 miles to pick it up. Cash purchase.
When I got there they wanted to pull my credit since I was paying with a check. I'm very sensitive to inquiries on my credit report, so I refused. They would up letting me take delivery without it because I told them that had they told me this would be an issue I would have gotten a certified check before heading out there, but if I left I wouldn't be driving back out, I would do the deal closer to home.
With a certified check though, or the CapitalOne blank check...I would refuse the credit app for sure.
I don't really blame them with a personal check. This happened to me once. I worked out a deal to buy a car over email/phone and drove 50 miles to pick it up. Cash purchase.
When I got there they wanted to pull my credit since I was paying with a check. I'm very sensitive to inquiries on my credit report, so I refused. They would up letting me take delivery without it because I told them that had they told me this would be an issue I would have gotten a certified check before heading out there, but if I left I wouldn't be driving back out, I would do the deal closer to home.
With a certified check though, or the CapitalOne blank check...I would refuse the credit app for sure.
#32
Everyone on this thread seems to have it correct, it's an ID check not a Credit Check.
A related comment on the original question has to do with the Capitol One "check". What is being presented to the dealer is really a "draft". Subtle difference to the consumer but it is somewhat more difficult and time consuming to get funded than a personal or Cashier's Check.
A related comment on the original question has to do with the Capitol One "check". What is being presented to the dealer is really a "draft". Subtle difference to the consumer but it is somewhat more difficult and time consuming to get funded than a personal or Cashier's Check.
#33
Lexus Champion
that's why i didn't bother and just let them check my credit? unless i am in the middle of a big mortgage loan or so where credit check can be sensitive, i don't have a lot of problem with big institute checking mine (under my reasonable basis). i was only asking because i was curious why they had to check when i was paying cash
#34
exclusive matchup
iTrader: (4)
I'm not sure most people are aware of this point--each request for credit reports, especially for something like a car purchase, can negatively affect your credit rating. Someone going in to buy a car with cash (maybe buying a second car moving out to the suburbs when buying a house), and gets "assurances" from the car dealer that it's "routine", then a few days before their home closing, the mortgage lender does a follow up credit check and sees an inquiry from a car dealer--not a good thing. The car dealer doesn't give a damn about this.
#35
Lexus Fanatic
I'm not sure most people are aware of this point--each request for credit reports, especially for something like a car purchase, can negatively affect your credit rating. Someone going in to buy a car with cash (maybe buying a second car moving out to the suburbs when buying a house), and gets "assurances" from the car dealer that it's "routine", then a few days before their home closing, the mortgage lender does a follow up credit check and sees an inquiry from a car dealer--not a good thing. The car dealer doesn't give a damn about this.
Nowadays especially any inquiry will require a written statement from you and the entity that submitted the inquiry stating the purpose of the inquiry, and that no new credit was extended or established as a result of that inquiry. Getting the letter from you is easy...getting it from the entity that pulled the credit takes time. Then your loan has to go back through underwriting which depending on the lender might take 2 hours...or 2 weeks.
Since in the process of your mortgage loan the final credit refresh happens right before settlement, this can and will delay your settlement. Depending on the situation that can be a very expensive delay.
Even more troubling can be the change in score. Its only a couple points, 1-5 depending on your overall credit profile. BUT...nowadays interest rates are tiered very high. If you have say a 781 and it reduces it to a 779...you could wind up loosing your rate. Its no longer the case that everyone over 700 or 720 gets top rates. I've seen lenders who's top tier is 800.
So...don't let anybody pull your credit unless you have to...and if you're in the middle of buying a house or refi-ing...don't period.
You are so right that dealers don't care. I had this discussion with a know-it-all finance guy when we bought the Jeep, he was saying how people tell him all the time how they can't buy a car because their mortgage loan is in process to buy their new house and he tells them "Oh as long as the payment is similar it will be fine". I literally put my hand up and said "Stop" and set him straight.
Last edited by SW17LS; 03-05-14 at 03:26 PM.
#37
Lexus Fanatic
Actually, that's a good point...and something that got past me earlier which I, of course, knew about, but had forgotten in the meantime. But a stop payment on a check isn't necessarily a free lunch.....banks typically charge around $35 or so (and some tedious paperwork) for a stop-payment action. Of course, IMO, only an idiot would try and do a stop payment on a Certified Check...he would essentially be paying two fees for nothing (one for the Certified Check itself; the other to stop it). Not only the dealership but also the bank would think he was nuts. That's the kind of reasoning you usually only see in big-city governments.
Last edited by mmarshall; 03-05-14 at 05:20 PM.
#38
Lexus Fanatic
I can stop payment on checks online. No paperwork.
Stopping payment on a certified check is MUCH harder. We're not talking about that, we're talking about a personal check.
he would essentially be paying two fees for nothing (one for the Certified Check itself; the other to stop it). Not only the dealership but also the bank would think he was nuts.
#39
Lexus Fanatic
Originally Posted by SW13GS
A $35 fee charged to an account which would be bogus to begin with. Remember...we're talking about people who would perpetuate fraud here. Someone doesn't decide not to steal a $50,000 car because of a $35 stop payment fee they would have no intention of paying either LOL
I can stop payment on checks online. No paperwork.
Stopping payment on a certified check is MUCH harder. We're not talking about that, we're talking about a personal check.
I can only assume this is supposed to be in jest...I would hope you would realize that people who would commit fraud to steal a car are not concerned with the cost of checks and stopping payment on checks...
I can stop payment on checks online. No paperwork.
Stopping payment on a certified check is MUCH harder. We're not talking about that, we're talking about a personal check.
I can only assume this is supposed to be in jest...I would hope you would realize that people who would commit fraud to steal a car are not concerned with the cost of checks and stopping payment on checks...
#40
Lexus Fanatic
All you have to do is look at Hoovey's post to see these things DO happen. Someone asked why the dealer wanted to check their credit if they were paying by check and we responded.
#41
Lexus Fanatic
Yup it happens. On several occasions we've had to report a deal to the local PD and have a collection agency search for the guy. This last instance, the manager and I got a call that the guy was in custody after assaulting a collection officer and fleeing. We arrived to find him in cuffs and when we repo'd the car (2014 IS) it was trashed inside, garbage everywhere, childs car seat, and some beer bottles on the floor
Last edited by mmarshall; 03-05-14 at 06:10 PM.
#42
Moderator
iTrader: (16)
Have you have ever watched the Tru-TV shows on auto towing/repo'ing (Lizard Lick Towing, Operation Repo, and South Beach Tow)? Those shows, though obviously scripted and sometimes involving acted-out sequences, DO give you an idea of the things (even involving violence) that people will sometimes resort to when they have neglected their monthly payments and it comes time to turn over those car keys.
#43
Lexus Fanatic
All you have to do is look at Hoovey's post to see these things DO happen. Someone asked why the dealer wanted to check their credit if they were paying by check and we responded.
#44
Lexus Fanatic
I hope you have never had to deal with one of the really bonko ones personally. Some people get more desperate trying to stop a car repo than they would an actual foreclosure on their house, which would be far more important to their lives and families. And, of course, on the other hand, some people who have lost their homes end up living in their vehicle.
Last edited by mmarshall; 03-05-14 at 06:34 PM.