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Buying a new vehicle was cash - How to prevent dealer from running credit?

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Buying a new vehicle was cash - How to prevent dealer from running credit?

Good evening,


I am about to buy a new vehicle (small, affordable) from a dealer - Kia.  I do not want them to run my credit, as I paying from my personal funds. This is in a major city in the U.S.

 

I know that dealers often disguise credit pulls as 'identity verification', 'terrorist check' etc. I am aware that I need to provide my SS# as part of IRS reporting requirements, so they will have all the information they need to run my credit, even without my explicit permission.

 

I am wondering, should I freeze my reports? But I believe there is a fee associated with that and I will need to do it individually with each CU? 

 

I believe that I have to sign a credit application in order for the dealer to run credit, but I am afraid they may try and make me do that under the guise of the patriot act, identity verification etc.

 

I have my State issued D/L and U.S passport. 

 

How would you experts deal with this situation? Freeze reports? 

 

Thank you and have a good night

Mr. Square

 

Message 1 of 18
17 REPLIES 17
Valued Member

Re: Buying a new vehicle was cash - How to prevent dealer from running credit?

Credit freezing is free now so is unfreeze them, has been free for about 6 moths! Yes, you would need to freeze it with each Credit Bureaus separately.

 

If cash purchase (as in dollar bills) is over 10k? Also need to fill out IRS Form 8300 at time of purchase. 

 

Dealership didn’t ran my credit or even requested when I purchased a car with cash back in 2013 and it was for more than 10k. Just hold firm if they try to “convince” you to financing it or run your credit.

-

 

ETA,

From memory, I recalled that our resident FCRA guru RobertEG (apology if I’m wrong) had said that Dealerships may still have Permissible Puporse (justification) to pull your credit report when cash purchase is in form of personal check rather than dollar bills. Even if that’s the case, there should only be one inquiry and not bunch, because dealership should not shot gunning out your credit app to other lenders as you aren’t seeking financing. Would be same if they doing it under cover of the Patriot Act. One inquiry should be sufficient to verify who you are.

 

Message 2 of 18
Valued Contributor

Re: Buying a new vehicle was cash - How to prevent dealer from running credit?

Sad, isn’t it?

 

I was prequailed with Cap One at 2.49% for 72 months.

 

I told the salesman that I did not want my credit pulled for any other reason or company than Cap One.

 

I told him I would get an instant alert on my phone and that I will raise hell in the showroom and walk out of the purchase if he runs it.

 

He did not.  Everything was super smooth.

 

GL!

Rebuild started in 2014  -  $100k total unsecured credit in 2017  -  $250k+ total unsecured credit in 2019.

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Message 3 of 18
Community Leader
Super Contributor

Re: Buying a new vehicle was cash - How to prevent dealer from running credit?

Here is what I'd do if I were in your shoes.  Since you have cash and know how much the car cost, get an official bank check, freeze your reports and head to the dealership.  Should be a smooth transaction from that point.

 

It is not as complicated as it seems.  Update once you have the car and good luck.

Message 4 of 18
Valued Contributor

Re: Buying a new vehicle was cash - How to prevent dealer from running credit?

I bought a new car less than a month ago and they did not run my credit.   I let them know that I wouldn't be using their financing and they were fine with it.  Even when they were trying to convince me to use their financing (offering lower than their promotional), we discussed what the requirements were and when I told them I couldn't meet it, and they were OK with it.

To be fair, I was using a bank check (from my CU, not from my personal account).   I know that my partner had his credit pulled when he paid by personal check for his car a couple of years ago.    

I would freeze your reports and use a bank check as Yes-Its-Me suggested and make sure the dealership knows that you don't want a credit check.   Shouldn't be a problem.  




Garden goal: Completely clean reports and a gold spade (which, at my current rate, is never going to happen...)
Message 5 of 18
Member

Re: Buying a new vehicle was cash - How to prevent dealer from running credit?

Good morning,

 

I was planning to take a personal check, but I can get a money order from my bank if that is a better option. 

 

I will also look into freezing my credit reports, does it usually go in effect immediately? Or does it take 1-2 days?

 

Thank you

 

Mr. Square

Message 6 of 18
Valued Contributor

Re: Buying a new vehicle was cash - How to prevent dealer from running credit?

I assume you mean bank check or cashiers check? It is my understanding money orders are limited to $1k each so that maybe cumbersome.

 

I second the freeze all three and then just go with your personal check idea. A freeze once placed online or by phone should be effective in under 1 hour (usually it is only a couple minutes). Note that you may not be able to lift till you are mailed a PIN, depending on credit bureau / if you do it online or via phone (some you can set when you freeze).

Message 7 of 18
Member

Re: Buying a new vehicle was cash - How to prevent dealer from running credit?

Good evening,

 

I presume I will need to setup online accounts with the three CRAs - Equifax, Experian and TransUnion in order to freeze the reports.

 

While I am doing so, do any of them have any offers to pull my Credit Report? Especially as I am a new account holder.

 

I read something on here, in another section/thread, about a $1 offer from Equifax or something. I guess I can search for it, but don't want to do something wrong which will interfere with me setting up accounts and freezing the reports.

 

Please spare a moment to guide me some more!!

 

Thank you

 

 

 

 

Message 8 of 18
Valued Contributor

Re: Buying a new vehicle was cash - How to prevent dealer from running credit?


@squareroot wrote:

Good evening,

 

I presume I will need to setup online accounts with the three CRAs - Equifax, Experian and TransUnion in order to freeze the reports.

 

While I am doing so, do any of them have any offers to pull my Credit Report? Especially as I am a new account holder.

 

I read something on here, in another section/thread, about a $1 offer from Equifax or something. I guess I can search for it, but don't want to do something wrong which will interfere with me setting up accounts and freezing the reports.

 

Please spare a moment to guide me some more!!

 

Thank you


You will need to set up accounts with each of the three bureaus, but they're super easy to freeze/lock (they use different terminology, I think).
Honestly, the $1 for the three bureau FICO8s from Experian is going to be the best/cheapest.
After you sign up and get your scores, go to the top right corner where your initials are and click on 'profile' and then 'membership' (on the left choice bar).   You just want to change your membership to the "basic" (thre's a link to change your membership at the bottom of the screen) one before the 10 days are up (before they bill you for the monthly membership) and you will be fine.

When you get the $1 trial from Experian, they will also give you a variety of other EX FICO scores (auto, bankcard, etc.) that you can check out as well.




Garden goal: Completely clean reports and a gold spade (which, at my current rate, is never going to happen...)
Message 9 of 18
Valued Contributor

Re: Buying a new vehicle was cash - How to prevent dealer from running credit?

I would not pay for anything, especially a "lock." You should put in place a FCRA freeze which should be free. If you don't want to deal with the accounts online, you could always place a freeze by phone which is what I personally do (no account, or wierd offers doing it by phone).

 

https://www.experian.com/freeze/center.html

https://help.equifax.com/s/article/How-do-I-place-temporarily-lift-or-permanently-remove-a-security-...

https://www.transunion.com/credit-freeze

Message 10 of 18