sphy1005

iTrader: (3)

Ok, So when I bought my Odyssey about 6 years ago I financed thru Capitalone. Brought a blank check and closed the deal. As we were doing paper work the guy said they had to run a "soft" credit check just to verify identity. I didn't think anything of it and did it. No problems I guess. Now its time to buy another car for the wife (RX). So again I am going with Capitalone for financing with their blank check. I googled this and people were saying it was BS and the dealers would claim its part of the Patriot Act when its not and really just wanted to see if they could get us to finance with them?

So do I decline a "soft" credit check? Is this legit? Do they "have" to do it for identity purposes. Anybody else experience this?. Thanks

bagwell

BS - tell them hell NO!
they're just trying to match or beat your Cap1 rate and finance it for you.

rominl

iTrader: (4)

when we bought our car cash, as in our own check from our bank (not finance) and they still had to check our credit

swajames

I almost walked away from a deal when the dealer wanted to run a check for a deal where I was paying for the car with a check, but happened every time since and I think it's generally legit. The application is generally just a very quick four or five line thing, I've never had to fill in the complete form. Logically, it makes sense in that the dealer needs to know that your check is probably good and you are who you say you are. If you want to wait for the check to clear before you take deliver you may be able to drive a different outcome, but if you want to write a check and drive off with the car there and then you're probably going to have to agree to the verification.

FrankReynoldsCPA

It is required by the Patriot Act for purchases over 10 grand.

Sent from my Nexus 4 using IB AutoGroup

JDR76

Maybe this helps.

http://www.edmunds.com/car-buying/ca...triot-act.html

bagwell

mmarshall

Cashier's (Certified) checks often avoid that problem. With a Certified Check, that's as good as cash, because it is, in effect, a legal document from the bank verifing that you have at least enough funds in the account to cover the withdrawl, and a guarantee that the check will NOT bounce. But a Certified Check can also be a PITA when you are shopping for a car. First, there is often a fee for actually having one filled out...though the bank may sometimes waive that fee if you have been a good or longtime customer. Second, you usually don't know what the exact amount needed will be until the dealer sale/paperwork is over and you have the final figure. It obviously helps if a local branch of your bank is nearby the dealeship...you can quickly go to the bank when the sales-deal is done, get the Certified Check, return to the dealership, pay off, and drive the new car home.

Keep one thing in mind, though...although it will not negatively affect you if, like me, you are honest and have nothing to hide. By Federal law, ANY cash sale (including any type of check), over $10,000 is reported to the FBI. The dealership has no choice.....it must do it. That law stems from the case of a big-name dealership in Tyson's Corner, VA (just a couple of miles from my house), where FBI agents posed as drug dealers and offered what they said was drug money for cash sales of cars on the lot (in effect, a sting). The dealership accepted (their view was they didn't care where the money came from), and a couple of the salespeople and a sales-manager went to prison. Congress, in the aftermath, created the new law requiring the $10,000 notification. .

IS350jet

You may be thinking of a different law. The $10k cash that dealers must report is part of the US Patriot Act, title 3. It's all done in the name of money laundering and Anti-terrorism.
http://en.wikipedia.org/wiki/Patriot...vent_terrorism

mmarshall

The 10K reporting requirement It may have been included with the Patroit Act (or reinforced by it), but was actually started some years before 9-11 happened and the Patriot Act came along. It dates, as I mentioned above, to the aftermath of an 80s-or 90s era FBI sting at a local D.C.-area dealership (I don't remember the exact date) where the sales staff and management were willing to take what was presented to them as drug money.

Lil4X

Mike's right. Unless you present a cashier's check, the payee should clear it with your bank - usually for an figure larger than the amount you made the check for. This is done to ensure you don't have outstanding checks that will hit the bank before theirs does.

When you present a check your credit rating won't be much of a help to verifying its validity.

gengar

FWIW, the dealership didn't check my credit when I bought the LFA. I honestly don't understand why any dealership would actually check credit to be honest. Someone's credit can be terrible and still have enough money for a car, just like someone's credit can be great and still try to scam the dealership.


The 10k cash reporting requirement came about as part of the much larger Tax Reform Act of 1984. Not sure that any specific event triggered the specific legislation.

mmarshall

The sting at a local (Tyson's Corner, VA) dealership also set the stage for it. The dealership was large, well, known, and had done a lot of TV advertising. So, even in those pre-Internet days, many local people (including members of Congress just across the river in D.C.) knew of the place. In fact, my brother was at the dealership checking out a (possible) new car when it happened...I was just getting ready to go up there (without drug money, of course) and help him check out the car. He watched the FBI guys swarm the place like wasps. The sting/bust and the subsequent trial/conviction of several of the dealership personnel was notable local news, and Congress itself took notice.

Also, don't forget, the Tax Reform Act of 1984 primarily dealt with the IRS and Federal taxes, not state and local sales-taxes, which are the predominent ones involves in local auto purchases. When you plunk down cash for a new car, regardless of whether it is less or more then 10K, you're probably not going to pay any Federal tax on the sale...but you WILL pay part of that bill in state and local sales tax.

tex2670

The Patriot Act has nothing to do with whether you are creditworthy -- it has to do whether you are laundering money. Credit checks have nothing to do with this.

tex2670

They can go report my $10k payment to whatever government agency they want--they are not checking my credit if I'm not getting credit from them. The FBI doesn't care if I'm a deadbeat.