Why credit check for a cash sale

[javacontour]

Technically, anyplace that refuses to take the card due to the transaction being too small is in violation of their merchant agreement. (One of my clients is MasterCard.) I'm not sure there is much for them to gain by going after the store that won't take it for less than $X dollars, so it doesn't seem to be widely enforced.

Besides, member banks provide merchant services as well as card issuing services. MasterCard, Visa, Discover and Amex just provide networks where member banks can process transactions using that brand of card.

Just like car dealers are representatives of the car maker, banks are members of card networks. So just like it's incorrect to blame Chevy, Ford etc when you encounter a bad dealer, it's equally wrong to blame MasterCard, Visa etc when you encounter a bad bank or merchant services provider.

 

[coolbird101]

Originally Posted By: apwillard1986
We do it at our dealership. There have been a few threads on this subject in the past. We do it because we have to run your info. against the OFAC list. The easiest and quickest way is to pull a bureau. It is not the only option but it is what we are best equipped for. There is nothing sinister about it, at least not at my store. The system we use is called Dealertrack. It is the same system we use to pull credit for a purchase. Most dealers are like us primarily because the OFAC check functionality is included in the Dealertrack program we already own. Like any business, redundancy gets expensive.
What is OFAC ? Why would yo have to run any info against it ? This would be the fastest way to see my tail lights, I cant think of any legit reason for this practice, im thinking this is ammo for the slimy guy in the small room we all have to visit at the end of the deal. apwillard1986, not attacking you. Its directed at any dealer that wont just take my cash and let me be on my merry way.

 

[javacontour]

OFAC Office of Foreign Assets Control. There are also banking regulations that require the report of transactions over $10K. So if you dropped a check at the dealer for over $10K, there is likely some paperwork.

 

[daves87rs]

Very soon background checks are going to be the norm, as if you are the business, you want to cover your butt in case the guy/gal goes out and does something real dumb.....

 

[daves87rs]

Originally Posted By: javacontour
OFAC Office of Foreign Assets Control. There are also banking regulations that require the report of transactions over $10K. So if you dropped a check at the dealer for over $10K, there is likely some paperwork.



This....

 

[apwillard1986]

No attack Interpreted

Trust me we would love nothing more than to just sell you a car. It just isn’t that simple any more.

The part of OFAC requiring dealer compliance is part of the Patriot Act. I used to have a digital copy of the section that pertained to it but I can’t find it. Basically it is a federal mandate that states that we have to make sure we are not selling a car to terrorist or other nefarious persons. We don’t have a choice in the matter. The check has to be run. It doesn’t, as I have said, have to be a credit check. The credit check is just the easiest.

The penalties for just letting it go and not running the check can be steep if audited. Fines up to $10,000,000, up to 30 years in a federal penitentiary of the judge’s choosing and the forfeiture of all personal and business assets.

I found this nice little PDF that was written to explain it to dealers it seems but it answers the question very well in just a couple of pages…

http://gvo3.com/Dealer%20Magazine%20Arti...bout%20OFAC.pdf

 

[Hermann]

If a dealer accepts a credit card for a vehicle purchase, there is an implied warranty that is part of their Credit Card agreement with the issuer. When I owned my Radio Shack Franchise in the early 90's, I gave a 2% discount if a customer paid with cash or check for computers and other large purchases. (Remember that back then, the average computer system of any decent quality was $2-3K) That was my discount rate with the credit card clearing house. Plus no implied warranty. A win-win scenario for me. As I had instant access to the cash.

 

[Doog]

I finance every car I buy. I just make sure there is no pre-payment penalty. I can afford to pay cash but usually have most of my cash tied up in investments and don't want to interrupt those. So, I make a few payments and when the time is right...pay off the note. It is just easier for me. Plus it keeps my FICO score over 800 and I get really low interest rates. Most people do not understand the complexities of the finance dept. in a car dealership. They would do better if they studied the subject a bit since they have to deal with one repeatedly over the course of their lifetime while making the second largest purchase in their financial existence.

 

[coolbird101]

I had no idea about that, I always give up my license when asked, they must check me out at that point. Im surprised they dont need to notify you about performing this check, I always thought they were just making a copy of it so they knew who was test driving there car. See, you do learn something everyday..
I still would leave before being forced to do a credit check if financing was not my intention.
By the way, I have very good credit

 

[Rock_Hudstone]

Originally Posted By: coolbird101
[]What is OFAC ? Why would yo have to run any info against it ? This would be the fastest way to see my tail lights, I cant think of any legit reason for this practice, im thinking this is ammo for the slimy guy in the small room we all have to visit at the end of the deal.

Federal government spying is what it is, sticking their big snoots into our business transactions. Part of the so called Patriot Act.

However, the dealership are not completely clean either.
Some will happily play all sorts of games to weasel as much sensitive personal information as possible: Unauthorized credits checks, copies of driver licenses for test drives around the block with the salesman in the back seat. etc.

 

[SlipperyPete]

Any cash transaction over 10k has required a Currency Transaction Report for many years before the Patriot Act. The Patriot Act just required the info to go to more people.

 

[asand1]

Title 31

 

[morris]

the government is having them report on drug runners. my bank will not tell me at what amount of money that i pull out, they will report it to the government.

 

[Rock_Hudstone]

Originally Posted By: morris
my bank will not tell me at what amount of money that i pull out, they will report it to the government.

$10,000 is the threshold for reporting. Also, multiple large transactions under the limit can raise red flags as well.

There is little privacy left today.

Wait until Obamacare is fully implemented and your medical records become public property.

 

[daves87rs]

Originally Posted By: Rock_Hudstone
Originally Posted By: morris
my bank will not tell me at what amount of money that i pull out, they will report it to the government.

$10,000 is the threshold for reporting. Also, multiple large transactions under the limit can raise red flags as well.

There is little privacy left today.

Wait until Obamacare is fully implemented and your medical records become public property.



Now that part will be true, sadly.

Also, don't have kids, they track those well too I see...

 

[SHOZ]

I use Scottrade for my IRA accounts. You cannot transfer more than $10k per rolling week to other financial institutions.

 

[GMBoy]

I also pay cash for all my vehicles. Never any trouble, of course the last new car I bought was in 2008. I walked in to the Cadillac Dealer, found the fully loaded CTS I wanted, went to my bank and got the cashiers check, went back and was home with the car. The entire process was less then 3 hours and NO paperwork other than the sales agreement.

I would refuse any credit check simply based on the harm the inquiry would do to my FICO score. Sure, only a teeny tiny hit but its still MY credit.

 

[VNTS]

What s OFAC?

I have paid cash for every car I have owned including 4 brand new ones, some over
30K. I always questioned why they would take a personal check, but was explained to me that the dealers can verify and transfer the funs almost immediatly so that is no problem(I offered to get bank checks if needed but no issue).

Note I would walk if any dealer wanted to run a credit check on me since I pay cash.

Originally Posted By: apwillard1986
We do it at our dealership. There have been a few threads on this subject in the past. We do it because we have to run your info. against the OFAC list. The easiest and quickest way is to pull a bureau. It is not the only option but it is what we are best equipped for. There is nothing sinister about it, at least not at my store. The system we use is called Dealertrack. It is the same system we use to pull credit for a purchase. Most dealers are like us primarily because the OFAC check functionality is included in the Dealertrack program we already own. Like any business, redundancy gets expensive.

 

[PandaBear]

Originally Posted By: Rock_Hudstone
copies of driver licenses for test drives around the block with the salesman in the back seat. etc.



This is a safety measure for the dealership as well as the salesman. They don't want the salesman murdered and the car stolen.

 

[Mitch Alsup]

I bought my Ferrari without a credit check. I saw the car one day, called my insurance guy the next, decided to buy it, called the dealer, sent him a deposit check, and showed up a couple of days later with a cschiers check for the remaining; and drove it home.

He didn't een look at my license of insurance papers.

Perhaps you guys are buying the wromg kinds of vehicles.....