Blank check financing

[Anonymous]

So, when I bought my truck a while a go, I got preapproved for 4000 and got a blank check. The final price was $3500 but I had the dealer write the check for 4000 and just hand me $500 cash so I could get the tags and such. How standard of a practice is this? I'm going to buy a car this week and got preapproved for 18000 so I will get my blank check that can be filled out with any amount up to 18 grand. The car I'm looking to buy is only 14k but I want the dealer to cut me a check for the other 4k so I can walk away with it and get the tags and do other stuff with the money. How often does this happen and is this a standard practice? I mean, no one is losing anything, the dealership still gets their money on the spot and I just get cash to walk away with to handle business. Has anyone else had an experience like this?

[thehollowaytape]

It may work out depending on what the car is worth. Usually banks/CUs won't go over a certain loan-to-value ratio.

[Anonymous]

NO!

What you and the 1st dealer effectively did is NOT common practice...outside of the 'hood or folks willing to take part

in the flim/flam fraud like scenario.

Now IS it done= yes

Is there a better more upfront way that is more common = Yes

Just so we are clear there is nothing 'wrong' with getting a overvalue loan....most lenders do that anyway....

NFCU does 120%....I think PenFed is 125% of the value to give room for things like tax, tags and extras like warranties and add ons.

The issue is, it's disclosed in the bill of sale not hidden by the dealer jacking up the price on paper and handing clients back CASH!

This 'wink' type side deal might fly for a few hundred dollars at the side/hood lot but no 'real' dealer is gonna side back thousands in cash,

from a loan check....if it were common practice drug dealers would 'buy' lots of overpriced cars to WASH money daily

Again, you and the small dealer on a small transaction can probably easily 'hide' $400-$500 bucks no big deal but due to taxes and accounting

a real dealer WILL NOT be doing that B.S.

The common practice is on a dealer deal the dealer handles tax and tags and the cot is listed right on paperwork, so everybody SEES what's going on

and what's going to the state with regards to tax and tag fees.....this is one of the reasons the bank/cu treats a private party purchases differently than a

dealer purchase b/c these issues are handled differently.

Again when I brought my car with NFCU they would lend up to 120% of NADA value now with my refi with PenFed they will lend up to 100% of the NADA...

where as if it were a loan to purchase they would lend up to 125%.... 

[elim]

Tags and "stuff"?    When I bought my vehicle last year, the only thing I could'nt finance was tags and they were about 60 bucks, not 500.

[elim]

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@Anonymous wrote:
So, when I bought my truck a while a go, I got preapproved for 4000 and got a blank check. The final price was $3500 but I had the dealer write the check for 4000 and just hand me $500 cash so I could get the tags and such. How standard of a practice is this? I'm going to buy a car this week and got preapproved for 18000 so I will get my blank check that can be filled out with any amount up to 18 grand. The car I'm looking to buy is only 14k but I want the dealer to cut me a check for the other 4k so I can walk away with it and get the tags and do other stuff with the money. How often does this happen and is this a standard practice? I mean, no one is losing anything, the dealership still gets their money on the spot and I just get cash to walk away with to handle business. Has anyone else had an experience like this?

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  The lender is losing 4k equity in their security.

[RonM21]

Interesting data points on this subject

[Sbrooks1]

Your really commiting a crime. This is not ethical in any way!

[Sbrooks1]

Also, cap one did away with the blank check, maybe because of fraud transactions who knows !

[surferchris]

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@Anonymous wrote:

NO!

What you and the 1st dealer effectively did is NOT common practice...outside of the 'hood or folks willing to take part

in the flim/flam fraud like scenario.

Now IS it done= yes

Is there a better more upfront way that is more common = Yes

Just so we are clear there is nothing 'wrong' with getting a overvalue loan....most lenders do that anyway....

NFCU does 120%....I think PenFed is 125% of the value to give room for things like tax, tags and extras like warranties and add ons.

The issue is, it's disclosed in the bill of sale not hidden by the dealer jacking up the price on paper and handing clients back CASH!

This 'wink' type side deal might fly for a few hundred dollars at the side/hood lot but no 'real' dealer is gonna side back thousands in cash,

from a loan check....if it were common practice drug dealers would 'buy' lots of overpriced cars to WASH money daily

Again, you and the small dealer on a small transaction can probably easily 'hide' $400-$500 bucks no big deal but due to taxes and accounting

a real dealer WILL NOT be doing that B.S.

The common practice is on a dealer deal the dealer handles tax and tags and the cot is listed right on paperwork, so everybody SEES what's going on

and what's going to the state with regards to tax and tag fees.....this is one of the reasons the bank/cu treats a private party purchases differently than a

dealer purchase b/c these issues are handled differently.

Again when I brought my car with NFCU they would lend up to 120% of NADA value now with my refi with PenFed they will lend up to 100% of the NADA...

where as if it were a loan to purchase they would lend up to 125%.... 

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Good information, thanks.

[grillandwinemaster]

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@Sbrooks1 wrote:
Your really commiting a crime. This is not ethical in any way!

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I wouldn't call it "committing a crime," but it's definitely not an ethical practice.  Its also putting you up outside down in a very bad way. The dealer that is ok ding this is NOT doing you any favors.