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Do auto dealers need to check my credit if paying in cash?

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savingmoney87
Regular Contributor

Re: Do auto dealers need to check my credit if paying in cash?

I learned my lesson the previous car purchase I had. They said they "needed my SSN for IRS reporting." Come to find out they had shopped my rate for me through different vendors. This past January I went to a dealership preapproved through PenFed and they were like we just need to do an application even if your not financing through us. I was like well, guess I won't be purchasing a car through you guys then. It took the floor manager to approve the deal because I was ready to walk. Nope, I know how this works. So.. If your preapproved and don't want to rate shop don't let them run your credit or provide them with a SSN. Your ID is more then enough verification. My issue is that I understand when rate shopping for a car the inquiries don't hurt your score but dealers like to shop XXX amount of companies and 10-15 inquiries for a car regardless of the score does damage when your shopping for other things. So nope, PenFed offers great deals so unless the dealer is offering some sort of zero percent and will only run 1 time. The deal is off. That's shady business practices for me. 





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Message 11 of 15
jim44
Established Contributor

Re: Do auto dealers need to check my credit if paying in cash?


@mitchblue wrote:

Thanks for the responses fellas. My CR's are froze anyway so I guess if they try they won't succeed. I was just concerned if they have a right to it..Thanks again...


From what I understood you are asking if a dealer MUST pull your credit report in order for you to purchase a car.  As others have stated, if you are paying cash, they are not required.  Also too, as others have stated if they tell you anything different that this it is not in your best interest to do business with that dealer.

However, if you pay cash over a certain amount, dealers are required to report to the IRS using the 8300 form with your SS#. (because of money laundering)  A dealer MUST have your permission to pull your credit plain and simple..  it is the law. It's as easy as not signing a credit application or volunteering your SS#

 

Contrary to what others have posted NOT ALL DEALER'S LIE.  You can certainly tell if a sales person lies by them telling you that your SS # is required when it is not in any situation other than obtaining a car loan or paying over a certain amount with cash.

 

So now you know and happy car buying!  May it be a pleasurable experience.

Message 12 of 15
Anonymous
Not applicable

Re: Do auto dealers need to check my credit if paying in cash?

Being in F&I at dealerships for years....they 100% do not need to run a bureau issued credit check!  Many dealers will ask you for information similiar to that of a credit check.  This is mainly for compliance issues and to run your information against OFAC.  What this basically means is that they are checking your information against a national database for fraud and terrorism.  When you fill out the information and they have you sign...make sure and put next to your signature that they do not have your authority to run a credit check for financing and that this only for verification purposes.  When it comes to IRS reporting most people here are correct but that should never be put on a credit application to start with.  I hope this helps with anyones future dealings with dealership F&I.

Message 13 of 15
Anonymous
Not applicable

Re: Do auto dealers need to check my credit if paying in cash?

Funny story about this and why it is important!  I had a good friend of mine at a High Line Dealership in New York, he did his part by running an OFAC on a customer that was paying cash in the amount of $127,000.  After verifying funds and having that come back validated he ran an OFAC on this customer.  It was the son of a Known Wanted Terrorist from 9/11!!!  So when you think a dealer is just trying to get your information for financial reasons there are actually much more important issues at stake.  This one time is all it took for FBI agents and Homeland Security to be at the dealership within minutes for questioning!  Sometimes they really are just doing their job and doing it very well I might add!

Message 14 of 15
mitchblue
Valued Contributor

Re: Do auto dealers need to check my credit if paying in cash?


@bstone wrote:

You got played.  Why would running your credit prove who you are but not your state issued ID?

 

They wanted to get you 0% interest and talk you into financing and keeping the cash in the bank, IMO.


I didn't get played..haven't even been to a dealership yet. I was just curious because I read different things elsewhere..

FICO® 8 Scores 821 FICO® 9 Equifax 826 (Updated 02-7-23)
Message 15 of 15
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