Buying new car cash: Dealer wants a credit check/financing application?

[cerbomark]

you ask, "how much am I paying for the car?".... yes sir I may finance, what s the car price before any finance is added? Don t want my monthly payments, just the car price. Then the number is set!!! Then work out payment details, so the car is XXX dollars , I wire the money, my grandma decided to give me the $$$$. You should be around invoice or less for that car.

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[Oakley]

There's no real way for me to get the deal done without telling them I'm paying cash. I'll be buying this from an out-of-state dealer and having it shipped.

sure there is.

you negotiate the price, get it in writing, then talk about how you are paying after the deal is done.

its easy.

 

[PhillyMike]

I'm negotiating the purchase of a new 2023 GT. The dealer is in a neighboring state.

I told the dealer I'd be paying cash. He said he'd need to do a financing application. I asked why I'd need to do one if I am paying the entire price of the vehicle with cash.

His response was that he needed one to "prove that I'm the one spending the money." This sounds like BS to me....

How the hell would a financing application prove that "I'm the one spending the money"? Wouldn't the check from me be proof of that?

Is this just a ploy to talk to me into f&cking me with some dealer financing?

My points on merits of taking 0% vs. cash in todays market aside, for the OP:

If you want to pay cash and absolutely don't want financing then there is no reason to run a credit report, at least not in PA or GA. When I paid cash for my 2011 Infiniti (GA) and 2015 Durango (PA) there was no credit report needed.

I would guess there is some internal reason to want your credit run, perhaps to offer the 0% financing to seal the deal with you, perhaps to get internal benchmarks on credit applications run per month.

It is valid to say 'No I am not providing this, I will come with whatever check you want once I get an out-the-door price and sales agreement in writing'.

 

[monte87]

2 questions:
1. did they know that would happen from the get go?
2. did you pay several thousand under MSRP?

i suspect no is the answer to at least one of those questions.

Yes, i traded in a car (2016) and bought new stang 2021... This was in 2021. Yes i paid several thousand under MSRP.. But it was also during covid.. Dealers were desperate for used cars and wanted to sell new ones.. We had upper hand.
Anthony

 

[ShadesOfBloo]

...Is this just a ploy to talk to me into f&cking me with some dealer financing?

My first thought was that it could be a threat that they're going to **** with your credit rating because you're not doing things their way.

But after reading other comments, it also makes sense that the dealer believes (correctly or not) that good credit correlates to having the cash to pay. And they're covering themselves in case the check is fake.

Also, by disclosing you are paying cash you are potentially hurting yourself. Dealers make money on the financing. If they don't make it there, they'll make it on the price of the car. Don't ever tell a dealer you are paying cash. Negotiate the price down as low as you can get it, take their financing and immediately pay the loan off. Make sure the loan has no pre-payment penalties.

^ THIS. I've heard this several times. Dealers haven't liked cash since some time in the 1980s.

And it's not just any financing. They want you to use their financing and if you let on too early that you won't, they'll look for other ways to gouge you.

So, when I went to buy my Mustang in Feb 2021 I asked the dealer about financing, and let them think I was considering their terms. Their interest rate was even worse than I expected, but the price of the car was settled by then. So I was like "Okay, I guess I'm using my own financing, then."
I opened up the USAA app on my phone and it turns out you can apply for a car loan without talking to anybody! In minutes that dealer had documentation that said I was buying the car, and their interest rates were now irrelevant.

They kept trying to sell me an extended warranty and service plan and whatnot, and I said "no" to all of it.

Once I brought the car home, I went to the Experian web site and paid to lock my credit report and deny any further queries.
My credit rating has gone way up since then, and it helped when I refinanced my house.

 

[oguruma]

2 questions:
1. did they know that would happen from the get go?
2. did you pay several thousand under MSRP?

i suspect no is the answer to at least one of those questions.

I bought a car (new F-250) with a personal check from a dealer. They knew I was paying cash from the get-go. I paid within a few hundred dollars of MSRP.

The only stipulation was that the title wouldn't be released until the check cleared.

 

[YULQQKN4]

STEPPING IN HERE.....As a Ford Finance Manager, I have never ever ever run credit on someone who states they are paying cash for the car. When the car comes in you either bring the entire amount as stated or you don't get the car...lol. its just that simple....I have had plenty of customers switch to financing when the car comes in, but we only run their credit when they tell me and sign the application to do so.

On cash deals we require finds to either be a wire transfer, cashiers check, cash or combination of any of the 3. If you want to give us a personal check, then we wait 7 to 10 business weekdays for it to clear.

 

[cerbomark]

STEPPING IN HERE.....As a Ford Finance Manager, I have never ever ever run credit on someone who states they are paying cash for the car. When the car comes in you either bring the entire amount as stated or you don't get the car...lol. its just that simple....I have had plenty of customers switch to financing when the car comes in, but we only run their credit when they tell me and sign the application to do so.

On cash deals we require finds to either be a wire transfer, cashiers check, cash or combination of any of the 3. If you want to give us a personal check, then we wait 7 to 10 business weekdays for it to clear.

Thank you sir!!! So your back to the 2 choices.

 

[oguruma]

sure there is.

you negotiate the price, get it in writing, then talk about how you are paying after the deal is done.

its easy.

But what's stopping the dealer from saying "Oh, we see that you're not financing the car through us, we've decide not to sell it to you?"

 

[XFactor7889]

Lots of comments in here about the concern over a check bouncing or something of the sort. Just so we're clear, I don't think there are too many dealers that are going to allow anyone to leave with a $50k car having simply provided a personal check. It's either going to be a wire or a cashier's check, where the funds are officially supplied by a bank that has verified the funds prior to the transaction taking place. And for that reason, they don't need to run your credit for anything other than trying to sell you financing.

 

[cerbomark]

But what's stopping the dealer from saying "Oh, we see that you're not financing the car through us, we've decide not to sell it to you?"

Then you walk and wouldn't want to deal with them anyway. Theoretically you already have the price in writing .
BTW/. you buying this car site unseen and transporting. I d want to have some faith in the dealer I was using . If this is going to be a contentious deal I d be careful. After you beat them on one game they get you somewhere else.

 

[XFactor7889]

But what's stopping the dealer from saying "Oh, we see that you're not financing the car through us, we've decide not to sell it to you?"

Good business. Yes, they make more money on financing. But, they're still in the business of selling cars. Sure, they'll probably have a lower margin, but that cash just improved their working capital outlook a lot more quickly than financing the car would have.

 

[cerbomark]

2023 Ford Mustang MSRP and Invoice Price
Select a typeCoupeMach 1Convertible

Trims	MSRP	Invoice Price	Edmunds Suggested
EcoBoost Most Popular	$29,165	$28,054
EcoBoost Premium	$34,190	$32,510
GT	$39,740	$37,823
GT Premium	$44,760	$42,591

 

[PhillyMike]

But what's stopping the dealer from saying "Oh, we see that you're not financing the car through us, we've decide not to sell it to you?"

You: "I never said I'd definitely finance the car from you".

Same category as: can the dealer back off of a deal if another guy comes in and says 'I'll pay you more for that car' after you negotiated a price and have a verbal deal. Sure, no law says they can't do that (I think) but shitty for business.

BTW, in the 4 times I've bought a new vehicle, when negotiating a final vehicle price I never said how I was going to pay for it until after we agreed on price, and honestly none of the sales guys asked me during negotiations if I was going to finance or not.

 

[scregan]

Just bought a new GT Premium Convertible. Paid cash, didn't have to do any financing paperwork.

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