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Went to a dealership to buy a new car after being approved by Capital One auto finance.

They wouldn't accept the Capital One check unless they ran my credit. I refused and they wouldn't budge. So I left.

Went to another dealership and same thing happened. I agreed to this time cause I needed a car immediately and the price was incredibly low. Also they claimed it would be to just verify my identity and would be a soft pull.

After everything was verified, I was taken to the finance office and he had me sign a finance contract. To my suspicion, it included APR %, monthly payments, total finance charges, etc. all higher than Capital One. The guy claimed it was just procedural and that they meant nothing and that they were accepting the Capital One check as payment. But I was still suspicious because I paid cash for a car before and the APR/payment/total finance charges were left blank.

So did they scam me or am I being paranoid?

If it's a scam, what happens now? Will they just not cash the Capital One check or claim it bounced and shop my contract around to their banks? I did have the guy change the APR to a lower rate than my Capital One.... maybe I should have had him change it to 0% then if he refused, it would've been a huge clue.

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I bought a used car a few days ago. My plan was to use my pre-approved PenFed check (2.49% for 5 years) to pay for the ... (more)

McDealio (Nov. 01, 2011 @ 9:28a) |

Are you opening a financial account, or just buying a car from that dealer?

taxmantoo (Nov. 01, 2011 @ 9:55a) |

Interesting to see how you can get the banks to lower their rates with a little bit of competition.

axiom (Nov. 01, 2011 @ 10:22a) |

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It is not unusual for the dealership to run a credit check even when paying by check. They want to know you're worthy and not going to bounce a check.

As far as the other stuff, that isn't customary, but there is no reason to be paranoid. Just take a look at your purchase contract. Everything should be in there.

If you get screwed, which probably won't happen, come on back for the best way to stick it back to the dealer.

Can't you cash the Capital One check for cash and give that to the car dealer? If they won't take your cash without a credit check, tell 'em to stuff it.

tyrone3971 said:   It is not unusual for the dealership to run a credit check even when paying by check. They want to know you're worthy and not going to bounce a check.

As far as the other stuff, that isn't customary, but there is no reason to be paranoid. Just take a look at your purchase contract. Everything should be in there.

If you get screwed, which probably won't happen, come on back for the best way to stick it back to the dealer.



It's not my check. It's Capital One's check, as they are the guarantor, so shouldn't they be doing a credit check on them instead?

But shouldn't the contract be absent of the APR, finance charges, etc. since it's the same as a cash deal????

I think they pulled a fast one and will be doing something underhanded soon.

xerty said:   Can't you cash the Capital One check for cash and give that to the car dealer? If they won't take your cash without a credit check, tell 'em to stuff it.


No, it's not a cash advance check, it's specifically for new cars and payable to dealers only.

It's standard operating procedure for dealer, since no checks, bank or otherwise are 100% safe these days.

Just ask nicely to see if you can opt out but there's nothing unusual about it.

But then again, are you going to listen to people here or you are looking for certain answer?

maydepot said:    ... So did they scam me or am I being paranoid? ....

Don't ever sign anything you don't understand. Next time tell them that you need to bring the contract home to read it. Never back down. If they are pressuring you, there is only one explanation. They are not good people.

ZenNUTS said:   It's standard operating procedure for dealer, since no checks, bank or otherwise are 100% safe these days.

Just ask nicely to see if you can opt out but there's nothing unusual about it.

But then again, are you going to listen to people here or you are looking for certain answer?



I'm just curious if it's unusual that a "cash deal" included APR, payments, finance charges in the contract and judging by the answers, it seems that it's very unusual.

I don't want to opt out. I love the deal and want to keep the car which is awesome. I just want them to deposit the check I gave them and not try to pull something.

Also if it's a scam, how does it work?

They may have been willing to forgo checking credit if you allowed 7-10 days for check to clear they just want know you don't have history of bad credit\ bad checks

You aren't going to get "scammed "
as in they are going to steal your money. They may try to shop the deal and find you a better lebder where they make a few hundred bucks selling the loan.

Personally if they find you a lower rate I'd take it. If they find a higher rate and won't take your cap one check , tell them to come get the car with a tow truck bc you just ran into the curb. Watch how fast they cash that check!!!

maydepot said:   Went to a dealership to buy a new car after being approved by Capital One auto finance.

They wouldn't accept the Capital One check unless they ran my credit. I refused and they wouldn't budge. So I left.

Went to another dealership and same thing happened. I agreed to this time cause I needed a car immediately and the price was incredibly low. Also they claimed it would be to just verify my identity and would be a soft pull.

After everything was verified, I was taken to the finance office and he had me sign a finance contract. To my suspicion, it included APR %, monthly payments, total finance charges, etc. all higher than Capital One. The guy claimed it was just procedural and that they meant nothing and that they were accepting the Capital One check as payment. But I was still suspicious because I paid cash for a car before and the APR/payment/total finance charges were left blank.

So did they scam me or am I being paranoid?

If it's a scam, what happens now? Will they just not cash the Capital One check or claim it bounced and shop my contract around to their banks? I did have the guy change the APR to a lower rate than my Capital One.... maybe I should have had him change it to 0% then if he refused, it would've been a huge clue.

maydepot said:    To my suspicion, it included APR %, monthly payments, total finance charges, etc. all higher than Capital One.

Asking the finacial guy to cross out this portion of the contract since it is not applicable and have both him and you initial it.

its misleading for a dealership to want to run your credit to shop around for a better financing deal without telling you and gaining your consent.

I've had dealerships attempt to do that as well and I refuse to provide them with SSN or DL info. I try to keep financing and car purchase as separate as possible. The dealership is trying to maximize their profit and the more info they have on you the better position they are in to do so. I only share SSN info with my bank and CU. the finance department is not the enemy but they are an extension to the sales department. they are trained and quite skillful at telling you the benefits of doing the deal the way they suggest.

I purchased a car or so I thought recently but the finance guy refused to give me a copy of the paperwork I signed. I gave him a personal check. He told me that I would receive a copy of the paperwork when I picked up the car. I returned on Saturday to pick up the car. The car did not have the extra features we agreed to and the finance guy refused to give me a copy of the paperwork I signed. I didn't feel comfortable at all. I don't understand what type of games they were playing but I told them enough and got my personal check returned. I find it strange that they didn't deposit the check.

I've heard from friends that another way to avoid this type of situation is to purchase the car via a program with the CU or Costco. These programs layout the code of conduct. They also follow up with you later to see how your purchase experience went.

I recently went through this exact same thing. I was paying with a personal check, they wouldn't even finalize the deal until I signed a "five liner" saying it was a requirement of the Patriot Act. I told them the Patriot Act merely requires them to verify my identity and that pulling my credit was simply the easiest way for them to do so, but it wasn't the only way. We argued, they promised it would be a soft, I knew it wouldn't be. It finally came down to allowing them a hard pull if I wanted the truck.

When they drew up the sales contract I noticed APR language and agreeing to whatever finance terms they dream up etc. I told them to change the contract to reflect no financing. They did, I signed, gave them a check and drove off the lot in my new vehicle then and there. One thing that protects them if my check bounced was they don't issue the Dealer Report of Sale (required to register the vehicle) until the funds clear.

maydepot said:   ZenNUTS said:   It's standard operating procedure for dealer, since no checks, bank or otherwise are 100% safe these days.

Just ask nicely to see if you can opt out but there's nothing unusual about it.

But then again, are you going to listen to people here or you are looking for certain answer?



I'm just curious if it's unusual that a "cash deal" included APR, payments, finance charges in the contract and judging by the answers, it seems that it's very unusual.

I don't want to opt out. I love the deal and want to keep the car which is awesome. I just want them to deposit the check I gave them and not try to pull something.

Also if it's a scam, how does it work?


do some research of car financing deals. you will see some articles written that talk about some of the interesting tricks that dealership financing companies play perhaps in the name of getting you a better rate and also making a few extra bucks. some articles that I've read talk about agreeing to specific terms and then days later being asked to return to the dealership to sign new paperwork at higher interest rates. people feel under pressure to have that car to they cave. one of the best responses I read stated that a woman told the dealership she would be right in to "return" the car. she said there was a long pause on the phone and she was serious about returning the car. they worked something out and she didn't have to resign paperwork.

Why would you sign a finance contract when you were not financing anything?

Went to a dealership to buy a new car after being approved by Capital One auto finance.

They wouldn't accept the Capital One check unless they ran my credit. I refused and they wouldn't budge. So I left.

Went to another dealership and same thing happened. I agreed to this time cause I needed a car immediately and the price was incredibly low. Also they claimed it would be to just verify my identity and would be a soft pull.


When you're buying something for big money, you not only agree on the price, but also on the terms of sale and form of payment. Real estate, new cars, and yachts are all in this category -- you should nail down all the specifics of the transaction before you proceed.

Why does the dealer want to run a credit check? Believe it or not, it is to verify your identiy. Paper checks can easily be faked. Or the account closed, or payment stopped. Someone with skill at Photoshop and a laser printer can gin up almost any kind of check. So the dealer (or anyone, for that matter) needs to be careful before accepting a check as payment.

I used the Capital One check years ago for convenience sake (paid off loan shortly after). I just wanted to avoid any finance discussion at the dealership. I also used one of the Ford purchase plans. Finance person spent some time on the phone with Capitol One to make sure everything checked out. They didn't hassle me with alternative financing. Now that I think about it, I might go back there again for another purchase.

so if you show up with a personal check they run your credit?
what if you show up with a certified check made out to the dealership -- do they still need to run your credit?

xit said:   so if you show up with a personal check they run your credit?
what if you show up with a certified check made out to the dealership -- do they still need to run your credit?


Cashiers checks are commonly used for fraud and I would be more worried about them than I would be about a personal check, but I would not accept either payment method for a car.

chimeer said:   xit said:   so if you show up with a personal check they run your credit?
what if you show up with a certified check made out to the dealership -- do they still need to run your credit?


Cashiers checks are commonly used for fraud and I would be more worried about them than I would be about a personal check, but I would not accept either payment method for a car.


what form of payment then is appropriate for buying a car when you do not want a credit check performed?

A credit check is never required to verify funds to clear a check. The dealer isn't trying to scam you. They are just trying to make money off you by trying to get you a better deal.

Here's the rule. If you ask a direct question and you do not get a direct answer, you start walking away.

The only thing the dealer needs to do is call the bank to verify the availability of funds.

chimeer said:   xit said:   so if you show up with a personal check they run your credit?
what if you show up with a certified check made out to the dealership -- do they still need to run your credit?


Cashiers checks are commonly used for fraud and I would be more worried about them than I would be about a personal check, but I would not accept either payment method for a car.


Yeah with all the fake checks out there, lately I've seen attorney's request a wire from the bank. Maybe if you walk in there and tell them you need their bank information so you can wire them funds, then they don't have to worry about a check bouncing. I've seen a local bank take forever (well 10-15 minutes, which is forever when you're waiting in line) to cash their own check as they had to scroll through the system to make sure that the check was valid and hadn't been cashed.

xit said:   chimeer said:   xit said:   so if you show up with a personal check they run your credit?
what if you show up with a certified check made out to the dealership -- do they still need to run your credit?


Cashiers checks are commonly used for fraud and I would be more worried about them than I would be about a personal check, but I would not accept either payment method for a car.


what form of payment then is appropriate for buying a car when you do not want a credit check performed?


Wire transfer

BS - Dealers don't need to write up financing contracts or run credit checks for cash purchases. Stick to your guns. My last two purchases were made with personal checks. When I got to the part of the form which asked for my SSN and authorized them to run my credit, I just crossed it out and said, "you won't need this." It wasn't a question; it was a statement. They looked at me like they didn't know what to say, but that was the end of that.

Too many people forget who's in charge here.

You should be able to buy the car with cash without a credit check. Tell them to get their cash/counterfeit marker and check the bills if they want. Maybe be viewed by the dealer like you are a drug dealer but at least they won't ask for your SSN.

If they won't let you buy with CASH, they are crazy.

SuperOcean said:   You should be able to buy the car with cash without a credit check. Tell them to get their cash/counterfeit marker and check the bills if they want. Maybe be viewed by the dealer like you are a drug dealer but at least they won't ask for your SSN.Um, actually they will ask for your SSN, since they will have to fill out an IRS 8300.

the problem is OP did not have cash on hand but have a check from chase autoloan. my dealer did the same thing when I bought my car. they said it is because the finance company could bounce the check and the dealer would have no recourse accept report the car stolen.

With cashiers check I had to supply SS# & submit to credit check. It's post 09/11 security. And also some cars Honda & Toyota for sure are worth at least 90% of purchase price after driving off dealer lot. So money laundering, fraud & 09/11 security are all factors.

clutchcargo777 said:   I recently went through this exact same thing. I was paying with a personal check, they wouldn't even finalize the deal until I signed a "five liner" saying it was a requirement of the Patriot Act. I told them the Patriot Act merely requires them to verify my identity and that pulling my credit was simply the easiest way for them to do so, but it wasn't the only way. We argued, they promised it would be a soft, I knew it wouldn't be. It finally came down to allowing them a hard pull if I wanted the truck.

When they drew up the sales contract I noticed APR language and agreeing to whatever finance terms they dream up etc. I told them to change the contract to reflect no financing. They did, I signed, gave them a check and drove off the lot in my new vehicle then and there. One thing that protects them if my check bounced was they don't issue the Dealer Report of Sale (required to register the vehicle) until the funds clear.


This is exactly right. We are required by law to verify that you are who you say you are - this involves us getting the five-line credit app and running your credit, then if things don't match (like because you've moved recently and the new address isn't on your report), we have to ask "out of pocket questions" - which are those that are like "Which county were you born in," or "which of these companies has NOT loaned you money."

Every state's different but the red flag things are standard operating procedure. What they did was definitely legit.

dcwilbur said:   SuperOcean said:   ...Maybe be viewed by the dealer like you are a drug dealer but at least they won't ask for your SSN.Um, actually they will ask for your SSN, since they will have to fill out an IRS 8300.

If it's a check from Capital One, like OP said, no, the dealership would not have to fill out the 8300, since the OP is not actually paying with cash.

axiom said:   A credit check is never required to verify funds to clear a check. The dealer isn't trying to scam you. They are just trying to make money off you by trying to get you a better deal.

Here's the rule. If you ask a direct question and you do not get a direct answer, you start walking away.

The only thing the dealer needs to do is call the bank to verify the availability of funds.


Dealerships are required by law to get a five line credit app to verify identity. That part, at least, had nothing to do with funding.

akiri423 said:   axiom said:   A credit check is never required to verify funds to clear a check. The dealer isn't trying to scam you. They are just trying to make money off you by trying to get you a better deal.

Here's the rule. If you ask a direct question and you do not get a direct answer, you start walking away.

The only thing the dealer needs to do is call the bank to verify the availability of funds.


Dealerships are required by law to get a five line credit app to verify identity. That part, at least, had nothing to do with funding.


They're not required by law to verify identity via credit report. These are company procedures, typically for loss prevention. The patriot act has some dealership stuff required though, but usually a copy of a drivers license is all that is required and collecting sales tax. It's also very loosely enforced. Any other "requirements" are primarily driven by policy set by dealerships.

EDIT: Here is some patriot act info. Basically dealerships want to cover their asses as best they can in case they have to respond to a government inquiry.
http://www.patriotdealer.com/faqs.cfm
http://www.niada.com/PDFs/Publications/USAPatriotAct.pdf

akiri423 said:   dcwilbur said:   SuperOcean said:   ...Maybe be viewed by the dealer like you are a drug dealer but at least they won't ask for your SSN.Um, actually they will ask for your SSN, since they will have to fill out an IRS 8300.

If it's a check from Capital One, like OP said, no, the dealership would not have to fill out the 8300, since the OP is not actually paying with cash.
Hey genius - I quoted SuperOcean who specifically said CASH. Read much?

akiri423 said:   Dealerships are required by law to get a five line credit app to verify identity. That part, at least, had nothing to do with funding.Really?

Show me where: Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act) Act of 2001.

arvinz said:   the problem is OP did not have cash on hand but have a check from chase autoloan. my dealer did the same thing when I bought my car. they said it is because the finance company could bounce the check and the dealer would have no recourse accept report the car stolen.Did they ask for your wife's pap smear too?

What they saw was that you were not willing to walk away. What they did was to attempt to get something for it.

akiri423 said:   clutchcargo777 said:   I recently went through this exact same thing. I was paying with a personal check, they wouldn't even finalize the deal until I signed a "five liner" saying it was a requirement of the Patriot Act. I told them the Patriot Act merely requires them to verify my identity and that pulling my credit was simply the easiest way for them to do so, but it wasn't the only way. We argued, they promised it would be a soft, I knew it wouldn't be. It finally came down to allowing them a hard pull if I wanted the truck.

When they drew up the sales contract I noticed APR language and agreeing to whatever finance terms they dream up etc. I told them to change the contract to reflect no financing. They did, I signed, gave them a check and drove off the lot in my new vehicle then and there. One thing that protects them if my check bounced was they don't issue the Dealer Report of Sale (required to register the vehicle) until the funds clear.


This is exactly right. We are required by law to verify that you are who you say you are - this involves us getting the five-line credit app and running your credit, then if things don't match (like because you've moved recently and the new address isn't on your report), we have to ask "out of pocket questions" - which are those that are like "Which county were you born in," or "which of these companies has NOT loaned you money."

Every state's different but the red flag things are standard operating procedure. What they did was definitely legit.


Wrong. Let me introduce you to a concept of "My attorney did it for me".

EvilCapitalist said:   akiri423 said:   clutchcargo777 said:   I recently went through this exact same thing. I was paying with a personal check, they wouldn't even finalize the deal until I signed a "five liner" saying it was a requirement of the Patriot Act. I told them the Patriot Act merely requires them to verify my identity and that pulling my credit was simply the easiest way for them to do so, but it wasn't the only way. We argued, they promised it would be a soft, I knew it wouldn't be. It finally came down to allowing them a hard pull if I wanted the truck.

When they drew up the sales contract I noticed APR language and agreeing to whatever finance terms they dream up etc. I told them to change the contract to reflect no financing. They did, I signed, gave them a check and drove off the lot in my new vehicle then and there. One thing that protects them if my check bounced was they don't issue the Dealer Report of Sale (required to register the vehicle) until the funds clear.


This is exactly right. We are required by law to verify that you are who you say you are - this involves us getting the five-line credit app and running your credit, then if things don't match (like because you've moved recently and the new address isn't on your report), we have to ask "out of pocket questions" - which are those that are like "Which county were you born in," or "which of these companies has NOT loaned you money."

Every state's different but the red flag things are standard operating procedure. What they did was definitely legit.


Wrong. Let me introduce you to a concept of "My attorney did it for me".


I've checked with an attorney before. The attorney told me there are no state or federal laws requiring me to provide a copy of my drivers license or SSN. The dealership business policies may require it but it is not a law. In fact, the business policies of the dealership open us up to potential identity theft. The dealership often misinterprets the laws such as the patriot act and red flag rule to justify their need for this info. They are required to validate who you say you are but that does not require a credit check or keeping a copy of your DL. The thing to ask anyone requesting this info from you is "why do you need it?" and "what are you doing to do with this info?" (including once the transaction is completed.

someone has already provided a link to the patriot act. below is the FAQs that addresses one of the questions for red flag rule

http://www.ftc.gov/bcp/edu/microsites/redflagsrule/faqs.shtm

Does the Red Flags Rule require me to check photo IDs of my customers? If I check photo IDs, should I keep copies? The Rule doesn't specifically require you to check customers' photo IDs. Of course, for some businesses, checking photo IDs is one way to verify that customers are who they claim to be. But if you decide to ask for a photo ID, keeping a copy often is unnecessary and can raise privacy and data security concerns, especially if you're collecting other personal information like date of birth, address, or Social Security number.

--edit to include the SSN portion --

Does the Red Flags Rule require that I use Social Security numbers to verify my customers' identity?

No, the Red Flags Rule does not require that you use Social Security numbers or any other specific identifying information. Whether you collect Social Security numbers or other information to verify a customer's identity depends on the nature of your business and the risks you face. Actually, collecting a Social Security number by itself is not a reliable way to verify someone's identity because the numbers are widely available and do not prove a person is who he or she claims to be. However, Social Security numbers can be helpful as part of a more comprehensive identity verification process for example, as a way to check against information from other sources or as a way to get other information, like a credit report, which can be used to verify a person's identity.

It's a good data security practice not to collect more information than you need. If you are asking for a Social Security number, but not actually using it as part of a more comprehensive authentication process, reconsider whether your business really needs to collect and maintain it.

DEid you consider first paying for car and have them clear the check and pick up car in 3 or 4 days?

Skipping 22 Messages...
McDealio said:   SUCKISSTAPLES said:   You aren't going to get "scammed "
as in they are going to steal your money. They may try to shop the deal and find you a better lebder where they make a few hundred bucks selling the loan.

Personally if they find you a lower rate I'd take it. If they find a higher rate and won't take your cap one check , tell them to come get the car with a tow truck bc you just ran into the curb. Watch how fast they cash that check!!!

I bought a used car a few days ago. My plan was to use my pre-approved PenFed check (2.49% for 5 years) to pay for the car. I had negotiated the out the door price ahead of time before I came into the dealer. As I was completing the paperwork, they asked if I wanted to fill out a credit form to see if they could beat my rate. At first, I said no and that I thought they couldn't do better than what I had. Eventually, I did agree and filled out a short form (double and triple checking what I was signing). They came back with a Bank of America offer for 1.99% for 5 years. I took that deal instead (knowing the dealer would get some money back from the lender for pointing me to them).

Of course, they did try to upsell me on overpriced GAP insurance and a warranty at the end of the deal, but it wasn't a really hard sell. I politely declined. Overall, it was a surpisingly pleasant buying experience.

My point is to agree with what SIS is saying in they they are trying to make some extra money by pointing you to one of their lenders. It is possible to come up with a deal that benefits both parties.
Interesting to see how you can get the banks to lower their rates with a little bit of competition.



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