SW17LS

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.

rominl

iTrader: (4)

i agree with this

gengar

I asked a sales manager at a Lexus dealership why dealerships would do credit checks even on payments in full. He said that 1) his dealership doesn't have that policy, and 2) the only reason a dealership would ever do a credit check is to try to convince the buyer to do a lease so that the dealership and the car company can make more money.

There are tons of ways to verify someone's identity without doing a credit check. I would never submit to a credit check when paying in full for a car - even with a personal check.

FWIW, I paid with personal check in full for both my IS-F's and no credit check was requested.

IS350jet

Yes, we're speaking of different laws, here. I'm referring to the one that was passed and signed into law by G.W. Bush in 2001. it is called the "International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001"
This is the law that required dealerships (all businesses, actually) to report cash transactions of $10,000 or more. It's spelled out in the link I posted.

tex2670

You can have stellar credit, and put a stop payment order on a personal check the minute you walk out of the dealer--I didn't think dealers accepted personal checks for amounts over $1,000. I bought my car with cash a few years ago, and had to get a bank check.

SW17LS

I'm not saying its right or wrong or if its the only way or not, I'm just saying thats why they want to do it. I've experienced this policy myself, and I've seen many posts about it on forums from a wide variety of makes.

In my circumstance nobody tried to sell me any financing, nor did they in the instances here, nor have they in the instances I've read on other forums.

Did you have a prior relationship with that dealer? And as you said your dealer doesn't do that...but that doesn't mean no dealer does.

BUT-I can tell you as someone who works in an industry where we deal with people's credit, people with good credit in general are less likely to do things like that...it shows an overall level of responsibility, and any liens or judgements for breaches of leases or contracts that have been granted against the person will show up. Plus, once they have your SSN and your credit profile they have more weapons to use against you if you default.

Its not a perfect solution, but its the solution that these dealers we're talking about have chosen to use. Your dealer requires a bank check for anything over $1,000...and thats another solution that can be used. Thats what I would prefer both as a consumer and if I were a dealer.

mmarshall

True, the FBI probably doesn't care if you are a deadbeat. Heck, for that matter, they probably have enough deadbeats on their OWN payroll. They are obviously interested in where (possible) drug deals or money-laundering may be taking place. And, of course, if you are like me (which you probably are), then you have nothing to hide....they can report all they want.

mmarshall

OR it can show that they are just good hackers and know how to break into files and steal someone else's good credit. Since you work in an industry that deals with credit, surely you know that hackers can, and often and do, strike anytime, anywhere. Even sensitive government agencies aren't always safe.

mcomer

Everyone seems to have the right information regarding the ID check involved here, it's not a Credit Check.

Related comment however is the original question referenced the "check" as issued by CapitolOne. The actual instrument that resembles a check is actually a "draft". It takes a bit longer to process the funds than either a personal or Cashiers Check.

SW17LS

Huh?! So the car dealership is an elaborate front just to steal peoples credit? I'm not sure what your point is.

mmarshall

No, that wasn't what I was referring to. Sorry if that was unclear...perhaps I could have worded it different. Perhaps a better way to decribe it is that a person with an impeccable financial history (or someone like me, who is never in debt and cleanly pays all of his bills off each month), could suddenly find himeslf/herself with a bad score on paper because some low-life managed to get his or her (good) data and either manipulate to his benefit or somehow exchange it with his own low credit-score. I'm not enough of a computer-geek or engineer to know exactly how that hacking is done out in detail (and a lot of those attacks, BTW, have been traced by investigators to Russian Mafia/organized crime which is outside our reach). But we both know that it happens regularly, whether the Russian Mafia is behind it or not.

In fact, about a year after I retired (2007) from my Government agency, I got a letter from them stating that hackers had broken into their personnel files and stolen data from a large alphabetical block of names...and it could have included mine as well. I was given a free one-year pass to one of the three major credit-monitoring companies (normally, one has to pay for that), that I could check regularly, just in case I noticed anything out of the ordinary. Fortunately, nothing adverse ever showed up in my own file. But, an ex-co-worker of mine that I went auto-shopping with for a new Honda Civic (he had requested my asstance in helping him find one and through the deal-making) found that, when the dealership actually checked his credit rating, it was lower then expected, and he may have been one of the ones that had actually gotten hacked. Fortunately, it didn't break the deal...he took home a new Civic EX coupe that very afternoon.

rominl

iTrader: (4)

agreed again. bottom line is if someone wants to scam, you can do all the checks you want and they still scam and drive the car away. dealerships are just doing what they can to possibly / potentially protect themselves. i asked why they ran credit as well when we were doing cash, they also said it's not absolutely but for another layer of protection

mmarshall

I really don't see where it's that big an issue on the part of the average car-buyer. The real question is whether you actually get the new car you want or not. The way I see it, if you can, without cheating or writing a bad check, take the car home that day with all of the financial hurdles cleared, and you aren't dealing with anyone crooked at the dealership itself (which, unfortunately, sometimes happens), then whether they actually check your credit or not is a minor issue at most.

rominl

iTrader: (4)

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

sphy1005

iTrader: (3)

I'll see how the Lexus Dealer goes about it and let you guys know. Thanks for all the info. When I financed the Van last time all they asked me after the "Soft" credit check was would I like to see if they could get a better rate for me. I said no thanks and that was the end of it. He wasn't pushy or anything.

I don't see it as a deal breaker but wanted to see if it is total bs or not.