Price off for paying full in cash? - Page 2 - LotusTalk - The Lotus Cars Community
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post #21 of 83 (permalink) Old 10-07-2007, 11:39 PM
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I paid for my elise in "cash", still had to do a credit check.
Not surprising. They also do it to verify your source for this income. If this were drug money, and the dealer did not do a check, it could come back to haunt them if the buyer is later caught and prosecuted.

My local Porsche dealer does this on all of their clients, no matter how they are paying for the car. It may even be a requirement by law.

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post #22 of 83 (permalink) Old 10-08-2007, 05:42 AM
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The information contained in a credit report verifies neither your income or your employment.

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post #23 of 83 (permalink) Old 10-08-2007, 06:46 AM
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Well, by all means if you have reason to use a personal check, do so.

But NOT for the reason described above. The Cash Transaction Reporting of the Bank Secrecy Act requires all transactions $10,000 or above be reported to federal regulators.

So, when your dealer takes your check to deposit it, it will automatically trigger the CTR for that check. It gets reported.

The 'system' also tracks for what is called 'structuring.'

That would be if you wanted to pay, lets say, for a $35,000 car with 3 $9500 checks (under the $10K mandatory) and a $6500 check. This activity would still get picked up and reported.

There are also all kinds of little triggers out there now watching how much you pay, and for what, courtesy of the BSA, the Suspicious Activity Reporting laws, the Privacy Act (which in no way protects one's privacy) and provisions in the Patriot Act.

Just know that when you pay for a car, no matter what form you use to pay, the transaction is reported and duly noted by 'the authorities.'
It may trigger something automatic on the bank's end, but a buyer won't have to fill out a Form 8300 with a personal check, which is what I believe 25psi_Elise_Killer's point was.

Hmmm... now you've got me wondering how many lists I might be on.


To the original poster's question - nothing. Cash makes no difference but tossing an AmEx on their desk will piss them off to no end.

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post #24 of 83 (permalink) Old 10-08-2007, 10:41 AM
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To the original poster's question - nothing. Cash makes no difference but tossing an AmEx on their desk will piss them off to no end.
Why? Because of the fee? Any dealers that I have used a credit card with have a limit of how much of the car you can put on a card. The most that I have seen is $5,000, which I believe is at least $150 dollars that the dealer pays to the credit card service.

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post #25 of 83 (permalink) Old 10-08-2007, 10:45 AM
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The information contained in a credit report verifies neither your income or your employment.

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I thought it does have employment info. I believe that it does not have your salary, but I thought it does show your trail of jobs???

I just know that the manager here does some kind of check to make sure the money is legit. This was just in a converstation between us long after I ever purchased a car from them; this was not something he told me because I was questioning why they would do a credit check.

Is there some other kind of background check that can be done fairly easily these days with a name and SS?

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post #26 of 83 (permalink) Old 10-08-2007, 11:01 AM
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When i paid "cash" for my car, dealer still made me signup for their financing just in case the check i gave them bounced.

I refused to tell the dealer my employer, so the salesman pulled out his credit card and said "ok, you work for Citibank and your work# is 800-xxx-xxxx". Done deal!

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post #27 of 83 (permalink) Old 10-08-2007, 11:23 AM
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Why? Because of the fee? Any dealers that I have used a credit card with have a limit of how much of the car you can put on a card. The most that I have seen is $5,000, which I believe is at least $150 dollars that the dealer pays to the credit card service.
Yes, due to the merchant fees.

I only did it once and wasn't limited. I gave the salesman the option of waiting 24-48 hours, with my deposit, for me to move funds around to complete the deal. He pulled some high-pressure tactics, so I just laid the card on his desk, smiled, and said "charge it." Slimeball went pale.

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- have you hugged your Exige today?
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post #28 of 83 (permalink) Old 10-08-2007, 11:30 AM
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I always thought it was because then they could see if they could make me an attractive deal on finance since thery make better cash there. abe's on the forum

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post #29 of 83 (permalink) Old 10-08-2007, 11:31 AM
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http://www.irs.gov/businesses/small/...148821,00.html

Here ya go, but the laws are about as clear as mud :P

If one used a check from a personal brokerage account, could the transaction be less likely to be reported since $$ amounts in brokerage accounts are typically large transactions?

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post #30 of 83 (permalink) Old 10-08-2007, 11:38 AM
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I always thought it was because then they could see if they could make me an attractive deal on finance since thery make better cash there. abe's on the forum
I think that it has something to do with the specific car dealer owner's requirement to prove that you are not laundering money. Which a credit check does not prove...

If you have the cash in full to pay for the car, why would you opt to finance to pay even more (i.e. interest) on the car? This I don't understand. Even if they give you a low APR like 7%, you still have to make something like 10% on a return (because you have to account for tax) to just break-even.
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post #31 of 83 (permalink) Old 10-08-2007, 11:55 AM
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I paid for mine with a personal check and got a discount.
I don't know whether the two were connected.
The car wasn't in stock - they had to order it from the UK so I wasn't expecting much of a discount anyway.

I had to pay cash - I have the credit status of a fifteen year old heroin addict.
In the UK my rating was 952 (out of 1000).
Here - I have "no record".

I had to pay cash for my house here - never mind the car.
A friend of mine specializes in getting mortgages for the disreputable (pre sub prime debacle) but couldn't do anything for me.

I only have a credit card because I opened accounts for my business with a local bank and they "had a word" with their Visa people.
When I tried to open a "Lowes" account to get the 10% discount on the first purchase they put it in the system and it came up with a credit limit of $300.

We all looked at the $4K's worth stuff in the trolleys...

In the end I had to pay with my one and only Visa card and they gave me the discount anyway.
For all I know I've now improved to "eighteen year old alcoholic" status but I haven't checked lately - since I can't get credit I can't build up a history - so I can't get credit etc. etc.

Probably just as well - at least I don't lose sleep worrying about making the payments.

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post #32 of 83 (permalink) Old 10-08-2007, 01:09 PM
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I always pay cash for cars these days. I think it may be an advantage to work out the deal with a dealer letting him think you are financing. They are generally robbers and get a kick back regardless of what they tell you. They may actually give you a better price with that thought in mind. After you come to a price agreement, write them a check!


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post #33 of 83 (permalink) Old 10-08-2007, 01:47 PM
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I always pay cash for cars these days. I think it may be an advantage to work out the deal with a dealer letting him think you are financing. They are generally robbers and get a kick back regardless of what they tell you. They may actually give you a better price with that thought in mind. After you come to a price agreement, write them a check!
I haven't figured out Lotus yet since I'm yet to work a deal on one (Lotus green pea here), but I deal with this issue all the time with the VW store I work also.

We get a reserve from the banks just by giving them business. It's not a lot, generally speaking a few hundred dollars. Since we work as loan brokers, we can also add %'s to the interest rate, and keep the money there too. The points we can add depend on the bank, but generally speaking it is 1% on subvented offers, and 2.5% on standard rates.

By paying full in cash, you have limited a dealers other sources of income, so against popular belief, you won't get a better selling price. We are generally looking to make $X on a car, so whether it is a combination of a lower selling price but money made in financing, or just a cash deal, the deal you are going to get is generally speaking the deal you are going to get. A $1,000 deal to me could either be $1,000 over what I paid for the car, or $500 over what I paid plus $500 made in financing.

It used to be in the past you could get a lower price if you paid cash, but it has changed. Now both the consumer and the dealer have to look at the total deal to see if it makes sense, and if it looks good on both sides, then both parties are happy.
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post #34 of 83 (permalink) Old 10-08-2007, 01:52 PM
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I think that it has something to do with the specific car dealer owner's requirement to prove that you are not laundering money. Which a credit check does not prove...

If you have the cash in full to pay for the car, why would you opt to finance to pay even more (i.e. interest) on the car? This I don't understand. Even if they give you a low APR like 7%, you still have to make something like 10% on a return (because you have to account for tax) to just break-even.

attractive for them, not me, plus some people think, well i could keep the $50,000 and pay a small amount each month instead.

cash in the hand is worth two in the bush right ?

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post #35 of 83 (permalink) Old 10-08-2007, 02:04 PM
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Originally Posted by Stephen View Post
Why? Because of the fee? Any dealers that I have used a credit card with have a limit of how much of the car you can put on a card. The most that I have seen is $5,000, which I believe is at least $150 dollars that the dealer pays to the credit card service.
Technically (at least in the state of Michigan) you cannot execute a partial purchase on a credit card because one is not allowed to have two lien holders on a car. If your down payment is on a card, and the balance is financed, you are violating this rule.

And secondly, most dealers frown upon a complete credit card purchase, because in the event of a contestation (where the card holder backs out of the purchase for any reason) the credit card company reverses the funding, leaving the dealer with either no car and no money, or a car that can't be sold as new and no money. The dealer in this scenario assumes ALL of the risk.
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post #36 of 83 (permalink) Old 10-08-2007, 03:28 PM
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There is no reason for a dealer to run a credit check on you when paying cash (ie personal check). Most will demand it, but none will give you a good reason beyond "its our policy". The credit check will not tell them anything about your check being good, if you are gainfully employed or the source of the money. On the other hand, walking into a dealership and slapping down a 50K check for a car and having bad credit would be highly suspicious. Therefore its mostly an easy litmus test for the transaction being good or not.
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post #37 of 83 (permalink) Old 10-08-2007, 04:13 PM
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Technically (at least in the state of Michigan) you cannot execute a partial purchase on a credit card because one is not allowed to have two lien holders on a car. If your down payment is on a card, and the balance is financed, you are violating this rule.
Bought my Lotus and my Toyota with credit card down payments, maybe CA is different?


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And secondly, most dealers frown upon a complete credit card purchase, because in the event of a contestation (where the card holder backs out of the purchase for any reason) the credit card company reverses the funding, leaving the dealer with either no car and no money, or a car that can't be sold as new and no money. The dealer in this scenario assumes ALL of the risk.
Bought a new bike totally on a credit card last month. If they frowned it wasn't in front of me. Again, California.

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post #38 of 83 (permalink) Old 10-08-2007, 05:32 PM
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Cash, charge, or finance?

To most dealers the price of the car will not change just based on your choice to finance or not. Yes the dealer, and I am a sales guy at a dealership for disclosure, can make some money if you finance the vehicle, but it won't affect what they sell you the vehicle for in most cases. The dealers main interest is moving iron, or composites in this case, and we will do what we can to accomplish that even if that means discounting the vehicle. Minnesota allows you to put a down payment, heck even buy the whole car on a credit card if you wish, but most dealers won't. As some one mentioned earlier, in the even of a dispute if the buyer has the vehicle in possession already and cancels the charge then the dealer is SOL.
Also, no matter if you pay cash, or finance, the dealership is required to run a report on the buyer. We call it the OFAC and it is required by law now. I believe that its purpose is to see if you are one of the people on the government's list of suspected money launderers, or merely work for Hillary's campaign.
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post #39 of 83 (permalink) Old 10-08-2007, 10:43 PM
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attractive for them, not me, plus some people think, well i could keep the $50,000 and pay a small amount each month instead.
Sorry, my misunderstanding.

Maybe I'm too logical to think that it's better to pay $50k for the car now rather than $60k for the same car three years later (through financing).

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cash in the hand is worth two in the bush right ?
A Lotus in the hand is also worth more than two in the bush.
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post #40 of 83 (permalink) Old 10-08-2007, 11:37 PM
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Also, no matter if you pay cash, or finance, the dealership is required to run a report on the buyer. We call it the OFAC and it is required by law now. I believe that its purpose is to see if you are one of the people on the government's list of suspected money launderers
Ha! I knew it was something like that; matches what my local Porsche dealer does.

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