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QUESTION: Buying from a sales lot with "cash"

I will be purchasing a car on a sales lot without dealer financing or bank loan. For the first time, I’ll be paying “cash” in full.

The car’s final price will be unknown until after negotiations. Then, I’ll have to go to my bank to prepare a cashier’s check for the exact amount. Before I head to the bank, do the car dealer and I sign a contract to finalize the price and terms? Or, is the dealer able to raise the price after I return with the cashier’s check?

Thank you in advance for your reply.

You should have a final contract. If the dealer tries to jack the price up when you return, just walk away. BTW, have the cashers check made out to you, not to the dealer. You can sign the check over to them when you take delivery.

If you have a checking account, just put the money in your account and write them a personal check, that how I did mine.

If you have cash on hand to buy a car, you probably have decent credit. Just negotiate the final low price with the dealer and then hand them your Visa/Mastercard/ AmEx and sign the slip. Pay the credit card bill in full when it comes. You’ll get to keep your cash for another month and have the benefit of air miles or rewards points or whatever your card offers you.

Not too many people have a credit card limit of $20k+. I have EXCELLENT credit…and I don’t have one credit card over $5k. In fact a credit card limit of $20k could hurt your credit. When you buy a house the banks look at the credit card limit as potential debt. You run the risk of getting turned down.

I haven’t had a vehicle loan in over 20 years. You negotiate the best deal you can. Then put down a minimum amount to hold the vehicle. Then get the certified check from your bank.

Before you leave the dealership you sign a contract with them. That contract is binding and legal. They can NOT charge you more then what you negotiated for.

Actually if you sign a contract with them, you can drive the car off the lot and take it to the bank. Contrary to popular belief, signing a contract does not make it final, one party has to become vested in the contract before it can be enforced. Putting a small down payment would qualify as being vested, as would driving the new car off the lot.

This little trick is usually used in by dealers to force someone into a car that they don’t qualify for. The dealer “is sure” the credit will be approved and the buyer can take the car home. When the buyer returns, he/she finds out that the low interest they thought they were going to get didn’t come through, but now the buyer is obligated to buy the car at what ever interest rates the dealer can find. If the buyer didn’t take the car off the lot, they could back out of the deal.

" If you have cash on hand to buy a car, you probably have decent credit. Just negotiate the final low price with the dealer and then hand them your Visa/Mastercard/ AmEx and sign the slip. "

I always pay cash for my cars and purchased a new Dodge Grand Caravan from a dealer in 1997 for a good price I had negotiated. I tried charging it to a credit card, but the dealer stopped me. The card was good to cover the entire purchase, but the credit card company’s charge would have cost the dealer a few percentage points of the sale. They did however, have no problem accepting my personal check.

Since then, I’ve purchased many cars with personal checks.

CSA

I’ve never seen a dealer accept personal check unless it was certified.

Mike, I Live In A Very Rural/Resort Area.

There is no problem making a car purchase anywhere in my area. The Caravan was purchased at a dodge dealer nearly an hour away that I had never done business with before. No problem with a personal check there.

I bought the wife’s almost new certified Impala a couple years ago at a Buick dealer an hour and 1/4 from here and I had never dealt with them, either. No problem with a personal check.

I looked a car once at a Pontiac/Cadillac/GMC dealer in our town, which is half an hour’s drive. The dealer, a person I had never met told me that I acted like I wanted to take the car home to show the wife. He asked me a couple questions about my name, where I lived and worked, etcetera, and threw me the keys. I offered up my driver’s license and he didn’t want to see it.

The same dealer had to keep calling one of my wife’s co-workers, every couple of days, who had taken a Pontiac for a “test drive.” They wanted her to buy the car or bring it back. It went on for a couple of weeks before she finally went in and paid for it.

People still leave keys in cars here and don’t lock car or house doors. I’ve mentioned that a local car repair shop fixes cars and also sells fresh eggs and honey, too. These are a few of the many little things we enjoy living in such a beautiful area on the shore of a peaceful 10,000 acre lake.

CSA

Sure, the dealer would lose a percent or 2 on the transaction, but that’s their problem, not the buyers. Just the same as someone picking up their $1000 head gasket job and paying with a credit card. Merchant fees are a fact of doing business just as much as the phone bill and garbage service. It’s an expense that’s factored into the daily overhead and reflected in the shop labor rate, or in this case in the price of the car. If the dealer wanted to offer a cash discount, great.

I’d think someone with cash enough to buy a car would have a credit card or 2 with a limit over $20K. I don’t have enough cash for a car and have cards with limits that high.

The last time that I used a check to buy something the clerk ran it through the register and returned it to me cancelled. If a dollar store can do that certainly a car dealership can.

I just paid $10,000 to a dealer for a used car. They accepted a credit card for $4000 and then about $6000 in a personal check.

“I’ve never seen a dealer accept personal check unless it was certified.”

When I bought my '97 Outback from the local, family-owned dealership in 1996, I asked what forms of payment they accepted, and their list included personal checks–to my great surprise, especially since I was a stranger to them. When I mentioned that this could be a good way to be cheated by an unscrupulous customer, the answer that I received was, “Well…that has never happened to us”.

That dealership continued to accept non-certified personal checks in 2001, when I bought my '02 Outback.

By the time that I bought my 2011 Outback in 2010, they had started to require a cashier’s check–despite the fact that I was now well-known to them, so I guess somewhere along the line, someone did give them a bad personal check!

I always put the purchase deposit on my credit card, but they won’t accept a credit card for the full amount, despite the fact that my credit limit would allow a purchase that large.

Before I head to the bank, do the car dealer and I sign a contract to finalize the price and terms?

Yes. You will provide some small downpayment as earnest money when you sign the contract. That can be cash, check or credit. I always go to my bank and get a bank draft for the balance, made out to the seller.

The day of the final transaction, I perform a pre-delivery inspection before signing anything or handing over the balance check. They will want to settle the deal first but you should insist on having it your way. Once they have the check, you lose any leverage if something isn’t right.

For example, one thing I insist upon is that no dealer advertising be placed on the car. One time, they ignored that even though I had them write it on the contract. You should have seen them jumping when I threatened to cancel the deal and walk. Keep as much leverage as you can for as long as you can.

Sure, the dealer would lose a percent or 2 on the transaction, but that’s their problem, not the buyers. Just the same as someone picking up their $1000 head gasket job and paying with a credit card. Merchant fees are a fact of doing business just as much as the phone bill and garbage service.

Big difference of 2% on $1000 vs $30,000.

I bought two new cars in just the last year. No dealer I know of would just suck up the transaction fees. Those would get factored in assuming you’d use a charge card.

I’ve paid cash for all my cars. Never had a loan. Only have two credit cards. Max is $10k. They wanted to keep upping them but I requested the limit. It’s never a good idea to have high limits on them.

I still want to reiterate that if you use a cashiers check, have it made out to yourself or to “yourself OR dealer”. If it is made out to the dealer only and then something tanks the deal, you will have trouble putting the money back into your account because it is not your check.

If you have the vehicle that you really like, and the deal you want, I still also recommend that you take delivery on it right away. If you have a contract, the dealer will be glad to let you take immediate possession.

The last time I financed a vehicle, I prearranged the financing through my bank. After finalizing the deal, which included the dealer verifying the financing deal, I took possession of the vehicle. I though the bank was going to transfer the funds to pay for it. Turns out about a week later, I get a call from the dealer asking me when am I going to bring in the check. Thats when I find out that I had to go to the bank and pick up the check and take it to the dealer myself. Oops.

They will write up a sales contract, give them $100 down, with the balance due noted, and go get the money. Cashiers checks though are getting to be a problem because too many people have been swindled by fake checks that look real and only show up two weeks later as being fake. Cash cash is better but even then, they need to check the bills to make sure they aren’t fake. Actually just a personal check from a local bank might be a lot better and you don’t have to fuss with it. If the check is no good, the dollar amount is high enough for the Sheriff to come get you and put you in jail. I’ve never had any trouble with personal checks to a dealer.

I’ve used personal checks fo my last two cars, no problem. Just check with the dealer.

I’ve been able to put a deposit with my personal check…but NEVER the $30k to close the deal. They either wanted a certified check or cashiers check. Maybe there’s far more crooks here in the NH/MA that the dealer got burned too many times.

I have asked my bank about the very remote chance I would need to cancel a sale altogether and have a cashiers check made out to the dealer. They kind of chuckled and said it’s no problem to more or less put the funds back into my account as long as I still have the check.

Nobody likes complicated checks especially with all the fraud going on. The last thing I want is a hang up in the transaction. Having to reassign a check or have multiple payees who have to sign is just over complicating the transaction for no reason that I can see.

The contracts here say “final payment in certified or cashiers check made out to XYZ motorcars.” If you insisted on a personal check, you’d be waiting a week to pick up your car…