going2tdc wrote:This is rather irritating. I applied for a loan through my local CU, to purchase a pre owned vehicle. Long story short the deal fell through and I am still shopping. I found another car tonight that I want to purchase. After we agreed on the price, I told the salesman I already had a loan approved through my CU. He said in order to buy the car I need to fill out a credit app. He said the owners of the dealership require this. I don't want any unnecessary inquires on my file. He stated that it would just show up as the name of the dealership. What is going to make my blood boil, is if I give them the info and they shop a bunch of loans. Im buying an older vehicle, and I doubt they can beat the rate I have. I feel confident enough that I don't even want them to try. Is this legit? Is there anyway I can authorize just one pull, or will they have free reign to submit my file to a bunch of banks?
There is a rule auto dealers must follow called the "red flags rule". It states that a dealer must check to make sure you do not appear on a terror watch list, money laundering watch list, OFAC, and others. This is normally cleared through a credit pull, however in the case of a cash buyer, many dealerships have a way to run your information through without a HP. I would say if you are concerned about the INQ, tell the dealer you will walk.
Starting Score: 650
As a car sales professional, I will tell you that any purchase over $9,999 a dealer is required to run the information on a credit app through OFAC(at least in cali). Pulling the credit does 2 things 1.) clear the OFAC requirement (buy seeing if their are any red flags and by asking out of wallet questions) and 2.) gives the dealership the ability to shop the rate. Now where as I can understand the adverse reaction to the hard pull I can honestly say that the majority of customers that I have had come in with financing already arranged have found we can find them a better rate. Good luck finding a credit union that will do 0% for 60 months. And as to somebody saying that the dealer makes most of its money in the financing, that is incorrect. Especially in California, there are strict regulations regarding how much a dealer can profit from the financing of a vehicle.
But worst case just tell them you will only let them run the OFAC and you dont authorize a hard pull. DONT SIGN THE CREDIT APP!!! fill it out but do not sign it. and tell them if they run it you will go to the DMV. they should back off at that point
dkicker07 wrote:As a car sales professional, I will tell you that any purchase over $9,999 a dealer is required to run the information on a credit app through OFAC(at least in cali). Pulling the credit does 2 things 1.) clear the OFAC requirement (buy seeing if their are any red flags and by asking out of wallet questions) and 2.) gives the dealership the ability to shop the rate. Now where as I can understand the adverse reaction to the hard pull I can honestly say that the majority of customers that I have had come in with financing already arranged have found we can find them a better rate. Good luck finding a credit union that will do 0% for 60 months. And as to somebody saying that the dealer makes most of its money in the financing, that is incorrect. Especially in California, there are strict regulations regarding how much a dealer can profit from the financing of a vehicle.
But worst case just tell them you will only let them run the OFAC and you dont authorize a hard pull. DONT SIGN THE CREDIT APP!!! fill it out but do not sign it. and tell them if they run it you will go to the DMV. they should back off at that point
This is completely wrong, regardless of what your bosses tell you. Show me the law (national or CA) that says a car dealership must run a credit check before selling a car. Link to it.
Also, regarding financing, they may not make most of their money, but they make plenty of profit on it, all over the country. Also, my CU may not be able to offer me 0% for 60 months, but that often isn't the best way to go. Many manufacturers will offer 0% OR cash back. More often, if you take the cash back and a low interest rate from your CU (let's say 2.49% like mine) you will pay less in the long run. Sometimes you won't, but you just need to do the math to figure it out.
Either way, it is absolutely incorrect that a credit check is required to verify your identity. I don't doubt for a second that many salesman believe this to be true, but that doesn't make it true. There is no such legal requirement. There are a ton of ways to verify someone's identity without a credit app and they are done every day by banks opening new accounts who must meet the same Patriot Act requirements.
myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.
>> About myFICO
