[fstr]

Hi. Quick question: I reserved my Ascent with Heuberger and it finally arrived.
I am planning to pay cash. But now they tell me they cannot proceed without me doing a credit application and hard pull.

What's up with that? This is the first time I am not financing so not used to the process.
For all you cash-buyers, do dealers always perform a credit pull?

Thanks for the help!

 

[Jason]

Every dealership is different, but yes it is common to have the dealer pull credit on a cash purchase.

 

[fstr]

Every dealership is different, but yes it is common to have the dealer pull credit on a cash purchase.

Why?
According to this link a credit pull is not needed for OFAC or Patriot Act. And it is just a ruse to get you into financing.

Dealers don't need your Social Security Number to check OFAC list
All they need is a name, not a number. As we showed you above, if you are paying cash and the car dealer checks your name against the OFAC list, you can easily see they don't need your Social Security number, so this is why I say it's bogus when they force you to fill out a credit application when you pay cash.

Other unscrupulous dealers lie and say the "Patriot Act requires you to fill out a credit application", which is just a flat out lie. Also the OFAC requirements were in place years before the Patriot Act. Ever since the early 2000's we here at CarBuyingTips.com have received complaints from car buyers telling us the dealer told them it is required by the Patriot Act when they pay cash.

We suspect that some of these morally challenged salespeople are just trying to trick car buyers into financing through the dealer and earn a little more profit and commission, or running an unnecessary credit check on cash buyers to sway them into car financing instead of paying cash. Don't let this happen to you.

 

[Jason]

Why?
According to this link a credit pull is not needed for OFAC or Patriot Act. And it is just a ruse to get you into financing.

Dealers don't need your Social Security Number to check OFAC list
All they need is a name, not a number. As we showed you above, if you are paying cash and the car dealer checks your name against the OFAC list, you can easily see they don't need your Social Security number, so this is why I say it's bogus when they force you to fill out a credit application when you pay cash.

Other unscrupulous dealers lie and say the "Patriot Act requires you to fill out a credit application", which is just a flat out lie. Also the OFAC requirements were in place years before the Patriot Act. Ever since the early 2000's we here at CarBuyingTips.com have received complaints from car buyers telling us the dealer told them it is required by the Patriot Act when they pay cash.

We suspect that some of these morally challenged salespeople are just trying to trick car buyers into financing through the dealer and earn a little more profit and commission, or running an unnecessary credit check on cash buyers to sway them into car financing instead of paying cash. Don't let this happen to you.

You are correct. They don't need it. Its just an extra step they take to protect themselves.

You should be asking your rep and Heuberger why they want/need it and they will probably tell you something similar.

 

[fstr]

Here is what they told me:

The credit application is part of our security protocal. If you desire this Ascent, you must complete the application to complete your purchase. A hard credit pull is required, but not submitted to any banks. We look for recent fraudulant activity and submit to OFAC.

 

[Jason]

Here is what they told me:

That is pretty much exactly what I tell all my customers as well

 

[fstr]

That is pretty much exactly what I tell all my customers as well

I appreciate your response, but what I am hearing is that you do not have a valid reason for doing a credit check but you do so in any case?

 

[kathytn]

I appreciate your response, but what I am hearing is that you do not have a valid reason for doing a credit check but you do so in any case?

....and, a credit check can hurt your credit score. If you were paying cash - yes, that's a reason to look for fraudulent activity. By check, NO. I'd allow them to call the bank to verify the check is good or even pay by Cashier's Check. But my credit and it's history is none of their business. They are not lending me any money. And, I'd have to "unfreeze" my credit and then refreeze it again. Until this month when the law took effect, that would have cost me between $20 to $60 to do.

 

[Carl Abrams]

....and, a credit check can hurt your credit score. If you were paying cash - yes, that's a reason to look for fraudulent activity. By check, NO. I'd allow them to call the bank to verify the check is good or even pay by Cashier's Check. But my credit and it's history is none of their business. They are not lending me any money.

You're correct that you're not being loaned any money. This is for the security of the dealership, not you. Dealerships do have certain written policies to protect themselves. It may come as a shock to you, but not everyone is ordering or buying a car with good intentions. We had something like this happen to one of the local dealerships about three months ago - five very expensive cars went away, and three long term employees ended up losing their jobs.

So, nothing personal, but if it comes to the point of following the policy of my company and doing a hard pull, especially since you're coming from out of state, or losing my job, I'm doing the hard pull.

 

[fstr]

I am really not looking to pick a fight. But I am still not getting it.
What is a hard pull telling you that a soft pull is not?
And if you get a check from the bank, not a personal check, how will you not get paid for the car?
I suspect there is much more to the story of the 5 cars "that went away" than just a hard credit pull that was not performed.

 

[Jason]

I appreciate your response, but what I am hearing is that you do not have a valid reason for doing a credit check but you do so in any case?

Its just an extra step they take to protect themselves..

I feel like a dealership protecting itself is a pretty valid reason...

 

[norway]

We paid cash (check), our dealership didn't do a credit check. I have other issues with them though, nothing is perfect. I can see the argument being made but I personally would push back and ask exactly what they are looking for and why. I personally would offer to show them my credit monitoring report instead, see what they say. A hard pull does usually lower your score by a few points for some period.

In the end if it is their policy and they won't budge then you have to decide if you want to buy from them or not. Can't force them and they will find another buyer.

 

[zulater]

I get people that have their credit locked but a hard pull impact is like 3 months and even then it's so minimal it's not worrying about. Like 20-30 points minimal. If you're looking to buy a house you may have a reason to care but if not it's not a big enough deal in the end.

 

[Orestes85]

they're looking for details that show you're not trustworthy. Evictions/foreclosures/repos etc. Stuff that might say the check will be bad, or fraudulent, or even that you are who you say you are.

 

[fstr]

So a potential employer would do a soft pull before hiring you to do a background check but the car dealership this is not sufficient?

 

[zulater]

So a potential employer would do a soft pull before hiring you to do a background check but the car dealership this is not sufficient?

Potentially.
I mean an employer is getting you to work then giving you money. The dealership is taking a piece of paper that represents money and giving you a $35-$50k vehicle to leave with that day.

 

[fstr]

Potentially.
I mean an employer is getting you to work then giving you money. The dealership is taking a piece of paper that represents money and giving you a $35-$50k vehicle to leave with that day.

Depending on the job the risk to the employer could be far greater in terms of money/reputation/time.

 

[fstr]

I feel like a dealership protecting itself is a pretty valid reason...

Sure, but I am questioning the method by which they go about it. A hard pull is only necessary for financing. How would the dealer not be protecting itself by performing a soft pull? And I am sure there are other options too that they can protect themselves if they cared enough about the consumer to explore it.
I this case you are sitting on one side of the fence but I would bet that in everything else in life you are sitting on the other side of the fence and would feel different about it.

In the end the problem is the consumer that is just so willing to roll over. Like a previous poster put it so nicely: The pull will only remain on your report for a few months/years. What's the big deal. Don't question...just roll over...

I think I made my point, I'll try to stop posting on this thread now

 

[Robert.Mauro]

I am really not looking to pick a fight. But I am still not getting it.
What is a hard pull telling you that a soft pull is not?
And if you get a check from the bank, not a personal check, how will you not get paid for the car?
I suspect there is much more to the story of the 5 cars "that went away" than just a hard credit pull that was not performed.

Incidents of fraud or trends indicating likely fraud in the past (sometimes it just gets written off for small amounts) or the possibility of fraud may show on a credit report. For instance, if it shows you've got no income, no credit and no history of such, but walk in with $50K cash... hmmm...

That's different than just an OFAC check. Combined, the two allow a dealership to better assess if you're a terrorist, trying to defraud them, paying with money obtained from illegal activities and a variety of other things relevant to protecting themselves as well as relevant to the laws they need to abide by.

If you come in with $40K or $50K in a cash-type form (cash, check, etc), I am going to want to make sure it's not drug money or laundered money from some other illegal activity. Last thing I'd want as a business owner is scrutiny by authorities trying to see if I am involved in those illegal activities.

Most dealerships don't have a "S/he looks like a nice guy, let's skip this stuff" clause, so, the safest thing for them to do is check everyone who tries to pay in such fashion.

 

[Orestes85]

Most dealerships don't have a "S/he looks like a nice guy, let's skip this stuff" clause

Which would end up in a discrimination lawsuit before the ink on that policy dried. Same reason you cannot negotiate doc fees. If we do it once, we have to do it every time.