Writing a Personal Check for a Car, Credit Check?

plainjane0415

Has anyone heard of this, FI and I are buying a car this weekend, and we are paying cash for it, (writing a personal check for it).  The dealership advised us that they would accept our personal check, but that they would have to do a credit check.  This makes no sense to me, as we are not financing the vehicle.  We would be fine with them calling our bank to verify funds, but we aren't thrilled about our credit having to be pulled for nothing. Has anyone heard of this before? It just doesn't seem right to me.

loveislouder

That sounds a little fishy. I would pay the 10 bucks to get the cheque certified at the bank instead.

princessleia22

I've never heard of it, but I've never paid cash for a car either. 

What about getting a cashiers check from the bank, instead of paying with personal check?  My bank will do cashiers checks free if you have an account.  Then the cashiers check should be accepted same as cash.

southernbelle0915

I've never heard of that. 

Just tell them no - they can call the bank to verify the funds if they want or you could pay with a cashiers check, but you're not giving them your SSN and other personal info so that they can check your credit. It's unnecessary. If they want your business, they should simply accept your payment. 

plainjane0415

A cashier's check would be easy, but we haven't seen or test drove the vehicle.  We want to do that before we agree to the purchase price.  I wonder if we could get a letter from the bank or something.

huskypuppy14

plainjane0415 said:

A cashier's check would be easy, but we haven't seen or test drove the vehicle.  We want to do that before we agree to the purchase price.  I wonder if we could get a letter from the bank or something.

You can get a cashier's check written out in your name. Then you can sign it over to the dealer. This way if you don't want to go through with the sale, then you can deposit the money back into your account.

This is what we did for the down payment on our house. It's what the lawyer recommended.

Also, some dealers won't even accept a personal check. The fact that they are even allowing you to write one is rare. Your check could bounce, and they would be out a car. That's why they want to run a credit check. Though, you're right, a letter from the bank should be sufficient.

plainjane0415

huskypuppy14 said:

plainjane0415 said:

A cashier's check would be easy, but we haven't seen or test drove the vehicle.  We want to do that before we agree to the purchase price.  I wonder if we could get a letter from the bank or something.

You can get a cashier's check written out in your name. Then you can sign it over to the dealer. This way if you don't want to go through with the sale, then you can deposit the money back into your account.

This is what we did for the down payment on our house. It's what the lawyer recommended.

Also, some dealers won't even accept a personal check. The fact that they are even allowing you to write one is rare. Your check could bounce, and they would be out a car. That's why they want to run a credit check. Though, you're right, a letter from the bank should be sufficient.

Ok I think I will just check with the bank to see what they can draw up. I would write a cashier's check, but it's complicated because FI wants to leave the door for negotiating open, so we aren't exactly sure what we would be paying, because it might be less than the sale price.  If that makes sense.  That's why getting a cashier's check is tough :-/

plainjane0415

huskypuppy14 said:

plainjane0415 said:

A cashier's check would be easy, but we haven't seen or test drove the vehicle.  We want to do that before we agree to the purchase price.  I wonder if we could get a letter from the bank or something.

You can get a cashier's check written out in your name. Then you can sign it over to the dealer. This way if you don't want to go through with the sale, then you can deposit the money back into your account.

This is what we did for the down payment on our house. It's what the lawyer recommended.

Also, some dealers won't even accept a personal check. The fact that they are even allowing you to write one is rare. Your check could bounce, and they would be out a car. That's why they want to run a credit check. Though, you're right, a letter from the bank should be sufficient.

I'm still confused as to what a credit check has to do with how much money is in your bank account.  I know people who have good credit, but probably wouldn't be able to write a check for a large amount of money and not have it bounce.  That's why I feel that they should be able to verify with the bank, as opposed to a credit check because ultimately they aren't really correlated. Well, I guess they are in some ways, but not as a means to check and see if a check will bounce or not.

wandajune6

I wouldn't agree to the credit check either. A cashier's check would be ideal but allowing them to call the bank to verify funds seems perfectly reasonable as well.

lyndausvi

plainjane0415 said:

huskypuppy14 said:

plainjane0415 said:

A cashier's check would be easy, but we haven't seen or test drove the vehicle.  We want to do that before we agree to the purchase price.  I wonder if we could get a letter from the bank or something.

You can get a cashier's check written out in your name. Then you can sign it over to the dealer. This way if you don't want to go through with the sale, then you can deposit the money back into your account.

This is what we did for the down payment on our house. It's what the lawyer recommended.

Also, some dealers won't even accept a personal check. The fact that they are even allowing you to write one is rare. Your check could bounce, and they would be out a car. That's why they want to run a credit check. Though, you're right, a letter from the bank should be sufficient.

I'm still confused as to what a credit check has to do with how much money is in your bank account.  I know people who have good credit, but probably wouldn't be able to write a check for a large amount of money and not have it bounce.  That's why I feel that they should be able to verify with the bank, as opposed to a credit check because ultimately they aren't really correlated. Well, I guess they are in some ways, but not as a means to check and see if a check will bounce or not.

credit ratings are all about risks.  Even someone with a 850 credit score can default, but it's worth the risk to a dealer.    I'm wondering if they are thinking in those terms?  Someone with a higher credit rating is a better risk of accepting a check then someone who has credit in the 500's.  In theory that is.

My parents always pay cash for cars, I'm not sure if they had their credit pulled or not.  They have excellent credit so I'm not sure if they cared or not.

Then again, dealers make money on financing, so they could be doing a back door sales pitch to get you to finance instead?

I don't know, it's weird.    Can you just write a personal check for a deposit, then return with a cashier's check for the balance?

plainjane0415

lyndausvi said:

plainjane0415 said:

huskypuppy14 said:

plainjane0415 said:

A cashier's check would be easy, but we haven't seen or test drove the vehicle.  We want to do that before we agree to the purchase price.  I wonder if we could get a letter from the bank or something.

You can get a cashier's check written out in your name. Then you can sign it over to the dealer. This way if you don't want to go through with the sale, then you can deposit the money back into your account.

This is what we did for the down payment on our house. It's what the lawyer recommended.

Also, some dealers won't even accept a personal check. The fact that they are even allowing you to write one is rare. Your check could bounce, and they would be out a car. That's why they want to run a credit check. Though, you're right, a letter from the bank should be sufficient.

I'm still confused as to what a credit check has to do with how much money is in your bank account.  I know people who have good credit, but probably wouldn't be able to write a check for a large amount of money and not have it bounce.  That's why I feel that they should be able to verify with the bank, as opposed to a credit check because ultimately they aren't really correlated. Well, I guess they are in some ways, but not as a means to check and see if a check will bounce or not.

credit ratings are all about risks.  Even someone with a 850 credit score can default, but it's worth the risk to a dealer.    I'm wondering if they are thinking in those terms?  Someone with a higher credit rating is a better risk of accepting a check then someone who has credit in the 500's.  In theory that is.

My parents always pay cash for cars, I'm not sure if they had their credit pulled or not.  They have excellent credit so I'm not sure if they cared or not.

Then again, dealers make money on financing, so they could be doing a back door sales pitch to get you to finance instead?

I don't know, it's weird.    Can you just write a personal check for a deposit, then return with a cashier's check for the balance?

I agree I think it's strange.

I think what we are going to do is get a letter from our Bank or have them call to verify funds. We both have very good credit, and I know a credit inquiry can lower your score 1-5 points, which isn't a huge deal,  but it's just principle, and the fact that we don't really want them to have our personal info if they won't actually be using it for anything.

AprilH81

I would go test drive the car, make sure it is what you want and then negotiate a price you are happy with.  

THEN go to the bank and get a certified check for the total amount due and return to the sales office to pay for the car and sign the papers.

No need to pull a credit report if you are paying in cash with verified funds.

theartistformerlyknownas

AprilH81 said:

I would go test drive the car, make sure it is what you want and then negotiate a price you are happy with.  

THEN go to the bank and get a certified check for the total amount due and return to the sales office to pay for the car and sign the papers.

No need to pull a credit report if you are paying in cash with verified funds.

I would do this as well, or get a certified check/MO for an amount lower than the sticker price and cash to make up the rest, so you can still negotiate an amount in between.

A call to the bank or a letter to verify funds isn't really reliable, since you could still have other checks outstanding that the bank wouldn't know about, or could withdraw cash between the time you hand the check over and it actually clears the bank. I wouldn't expect them to honor this. 

Liatris2010

AprilH81 said:

I would go test drive the car, make sure it is what you want and then negotiate a price you are happy with.  

THEN go to the bank and get a certified check for the total amount due and return to the sales office to pay for the car and sign the papers.

No need to pull a credit report if you are paying in cash with verified funds.

Ding, ding, ding!!

This is the right answer!

beethery

AprilH81 said:

I would go test drive the car, make sure it is what you want and then negotiate a price you are happy with.  

THEN go to the bank and get a certified check for the total amount due and return to the sales office to pay for the car and sign the papers.

No need to pull a credit report if you are paying in cash with verified funds.

I agree with this as well. Test drive the vehicle, and have a cashier's check either ready or let them know you'll go get one from the bank.

We do this for our company when we get new vehicles and it's never been an issue.

KatWAG

Totally normal. We have bought 3 cars in cash. And they have pulled credit reportss each time. I dont get the logic and think its a waste of time but they do.

I dont want to be a debbie downer, but I dont think you are going to get the dealership to change their policy on this.

plainjane0415

beethery said:

AprilH81 said:

I would go test drive the car, make sure it is what you want and then negotiate a price you are happy with.  

THEN go to the bank and get a certified check for the total amount due and return to the sales office to pay for the car and sign the papers.

No need to pull a credit report if you are paying in cash with verified funds.

I agree with this as well. Test drive the vehicle, and have a cashier's check either ready or let them know you'll go get one from the bank.

We do this for our company when we get new vehicles and it's never been an issue.

This is what we want to do, but the dealership is 2.5 hours away.  If we didn't want to negotiate a little, then it wouldn't be a problem.  We could just take a cashier's check down there and be done with it.  But the distance is the problem.  I guess we should end up just looking at the vehicle, coming back home and then getting a cashier's check. The pulling of credit isn't the issue, because our credit scores are very good, we just don't see the point in it. I feel like I'm being whiny.... But it just keeps nagging at me! Ugh!

plainjane0415

KatWAG said:

Totally normal. We have bought 3 cars in cash. And they have pulled credit reportss each time. I dont get the logic and think its a waste of time but they do.

I dont want to be a debbie downer, but I dont think you are going to get the dealership to change their policy on this.

Yeah, I'm sure they would give us a hard time about it.. I just didn't know if anyone had the same experience or not... blah.. I'll have to talk to FI and see what he thinks.. he may not think it's worth the trouble and just have them pull our credit...

jenna8984

I think @lolo883 had a perfect idea. Get a cashier's check for say $20k then if it ends up being $21,859 just write a personal check for the difference. I can't see them needed to do a credit check on a personal check that's a small amount.

STARMOON44

Your bank doesn't have a branch near the dealer? I think it's completely unreasonable to expect to walk out with a car leaving them with a piece of paper without even getting to check if say your credit shows you never pay your bills.

plainjane0415

STARMOON44 said:

Your bank doesn't have a branch near the dealer? I think it's completely unreasonable to expect to walk out with a car leaving them with a piece of paper without even getting to check if say your credit shows you never pay your bills.

No there isn't one, I'm from a small town, and the only bank options we have are small town banks. As I said before, checking my credit isn't the problem, them having my personal information and supposedly "not doing anything with it" is weird to me.

FiancB

I wrote a personal check for a truck and they just took it. 

theartistformerlyknownas

plainjane0415 said:

STARMOON44 said:

Your bank doesn't have a branch near the dealer? I think it's completely unreasonable to expect to walk out with a car leaving them with a piece of paper without even getting to check if say your credit shows you never pay your bills.

No there isn't one, I'm from a small town, and the only bank options we have are small town banks. As I said before, checking my credit isn't the problem, them having my personal information and supposedly "not doing anything with it" is weird to me.

Then just let them pull your credit. I don't think it's that strange, and one request won't affect your score. It's multiple pulls that cause a problem.

plainjane0415

 

lolo883 said:

plainjane0415 said:

STARMOON44 said:

Your bank doesn't have a branch near the dealer? I think it's completely unreasonable to expect to walk out with a car leaving them with a piece of paper without even getting to check if say your credit shows you never pay your bills.

No there isn't one, I'm from a small town, and the only bank options we have are small town banks. As I said before, checking my credit isn't the problem, them having my personal information and supposedly "not doing anything with it" is weird to me.

Then just let them pull your credit. I don't think it's that strange, and one request won't affect your score. It's multiple pulls that cause a problem.

I think that's what we will have to end up doing.  I don't see FI wanting to have to come back a second time with a cashier's check.

relliotts

It's not just a matter of the funds being available in the bank. As another poster pointed out, it's about risk. It will take a while for that check to clear your account. Many things could potentially happen: you could place a stop payment, your bank could flag it as potential fraud and hold up processing, or you may have outstanding debt which would mean that creditors could potentially come in and garnish your bank account which would means the funds would NOT be available when their check was presented for clearing. They want to assure themselves as much as possible that there will be minimal risk of your check not being honored.

Can they take a credit card, and is your purchase within their credit card limits? They may be willing to run your debit card as payment and consider it as guaranteed funds as these transactions clear more quickly than a check.

plainjane0415

relliotts said:

It's not just a matter of the funds being available in the bank. As another poster pointed out, it's about risk. It will take a while for that check to clear your account. Many things could potentially happen: you could place a stop payment, your bank could flag it as potential fraud and hold up processing, or you may have outstanding debt which would mean that creditors could potentially come in and garnish your bank account which would means the funds would NOT be available when their check was presented for clearing. They want to assure themselves as much as possible that there will be minimal risk of your check not being honored.

Can they take a credit card, and is your purchase within their credit card limits? They may be willing to run your debit card as payment and consider it as guaranteed funds as these transactions clear more quickly than a check.

This is a great suggestion.  I know the dealership will take a card.  I know with our bank if you are going to make a purchase over a certain limit as long as they know about it before hand it should go through without a problem.

wandajune6

My parents usually charge as much of a car as the dealership will allow. Their favorite will only allow $10K on a card so they'll do that then pay the rest with a check. When I bought my car, they only allowed $6K.

My parents are pretty hardcore about their rewards programs.