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Discussion Starter · #1 ·
Finally my Ascent came. Along with excitement it brought some issues.

I already got a financing pre-approved from my credit union. Although rate is not superb, I trust them to be transparent. I will be making 30-40% down payment directly to the dealer. Dealer suggested a personal check for down payment. Credit union requires a purchase agreement to issue check for the financing part and can even overnight it.

I spoke to dealer today. He said I can't pick-up the car unless the two checks clear.

Alternatively he suggested going through Credit Union Direct Lending, which may tap into my credit union. I heard interest rate may be a percent higher. It will also mean a new credit pull which seems unnecessary.

Yet another option suggested by dealer is, if my CU isn't linked to CU DL, then he can do "either or" (or some such thing) wherein I can take the car, but sign-up something to the effect that if I don't give them money or checks clear in a week, automatically Subaru's financing will be used to give me a loan. This seems a little risky and it appears it will be a credit pull (right?). I am worried if it will be some form of yo-yo financing!

Also, I am not sure if I want to purchase and then leave the car with the dealer while waiting for the checks to clear. I am traveling next week so it will be at least a 5 day delay. Scratches, test drives what not. What recourse will I have then.

What is the normal process when one finances from an external lender? How one pays and when one takes the car?
What would be the best way to handle this situation?
Please advise.
 

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IMHO,
There will be no pre-payment penalty on whatever the dealer wants you to do to take the car that day (double check to be certain). You can do whatever loan they want to do at 100% financing, then a month later or less re-finance with your credit union and do your downpayment there.

Alternatively you can wait for the check to clear as of now and make sure to mention you will not take the car if it has another mile on it when you come back since they are forcing you to wait. Take a picture of the odometer and wait another few days.
 

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The two last cars I bought under my name using external lender, I did not discuss the accurate payment specifics to the dealer. I told the dealer's finance manager two specific paths, but did not specify the priority. I allowed them to run my credit to offer me the finance deal based on two criteria: 1) zero down payment; and 2) #down payment. From my experience, you have more advantage of narrowing your conversation (i.e. be specific of conveying the truths) to your external lender than the dealer's lender. The key point, from my experience, is to allow down payment to be handled between you and your external lender.

I wrote about this same key issue on another thread and it wasn't my responsibility to defend the truth, because someone challenged what I accomplished, not that people care anyways. For what it's worth, go back to your CU or external lender and tell them to pick up the purchase order and pay for it (if applicable); then you can make the down payment to your CU.

If you're still puzzled on the concept of the financial process, just let me know so I can explain in a different way.
 

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Finally my Ascent came. Along with excitement it brought some issues.

I already got a financing pre-approved from my credit union. Although rate is not superb, I trust them to be transparent. I will be making 30-40% down payment directly to the dealer. Dealer suggested a personal check for down payment. Credit union requires a purchase agreement to issue check for the financing part and can even overnight it.

I spoke to dealer today. He said I can't pick-up the car unless the two checks clear.

Alternatively he suggested going through Credit Union Direct Lending, which may tap into my credit union. I heard interest rate may be a percent higher. It will also mean a new credit pull which seems unnecessary.

Yet another option suggested by dealer is, if my CU isn't linked to CU DL, then he can do "either or" (or some such thing) wherein I can take the car, but sign-up something to the effect that if I don't give them money or checks clear in a week, automatically Subaru's financing will be used to give me a loan. This seems a little risky and it appears it will be a credit pull (right?). I am worried if it will be some form of yo-yo financing!

Also, I am not sure if I want to purchase and then leave the car with the dealer while waiting for the checks to clear. I am traveling next week so it will be at least a 5 day delay. Scratches, test drives what not. What recourse will I have then.

What is the normal process when one finances from an external lender? How one pays and when one takes the car?
What would be the best way to handle this situation?
Please advise.
If the dealership gives you an options contract, they are most likely to run your credit before they do that and virtually sell you the vehicle at the Subaru - Chase 3.49+ rate. You get 7 days typically to get your CU to send the check to the dealership. In which case the dealership financing does not take effect and your CU loan takes effect. Their goal (shady) is to sell, so they will likely not give you the keys until they do this. Yes credit runs twice. But bureaus don't ding more if the purpose is same in the inquiry for 30 days. But yes, they will be hard inquiries.

Regarding dents and scratches, yes I went through anxiety for two days, all turned out fine in the end. Good luck..
 

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My Ascent experience was exactly what srikanth777 stated. My Ascent came about 2 weeks earlier and I didn't have an Auto loan secured.
I told my dealership, that I was shopping around for Auto Loans because I already knew my local credit unions were lower then Subaru's rate.
They ran my credit and said I was approved and gave me Option contract.
I was then able to drive off with the Ascent and had 7 Days to get my own financing.
If I couldn't secure my own loan then they would use Subaru's financing.
 

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Discussion Starter · #6 ·
The two last cars I bought under my name using external lender, I did not discuss the accurate payment specifics to the dealer. I told the dealer's finance manager two specific paths, but did not specify the priority. I allowed them to run my credit to offer me the finance deal based on two criteria: 1) zero down payment; and 2) #down payment. From my experience, you have more advantage of narrowing your conversation (i.e. be specific of conveying the truths) to your external lender than the dealer's lender. The key point, from my experience, is to allow down payment to be handled between you and your external lender.

I wrote about this same key issue on another thread and it wasn't my responsibility to defend the truth, because someone challenged what I accomplished, not that people care anyways. For what it's worth, go back to your CU or external lender and tell them to pick up the purchase order and pay for it (if applicable); then you can make the down payment to your CU.

If you're still puzzled on the concept of the financial process, just let me know so I can explain in a different way.
Thanks everyone for the inputs.

I am having a harrowing experience. The external lender (a CU) has loan pre-approved and is willing to write a check as soon as they get a purchase agreement.
The dealer isn't willing to send me a purchase agreement (although I offered if they do that I can bring both checks tomorrow). On top of that the dealer says that I'll have to go through CU DL if I want my credit union to finance, which is like a new loan. They just can't accept a check from them directly as it violates some CU DL rule - a claim that my CU lending department refuted. This seems weird, as for the dealership it should be like an all cash deal - they get two checks for the full amount and its a quick sale. What do they care what arrangement I have with my CU? I said if I do all cash from my account, which I can do and offered to do, would he still have trouble accepting? The extremely rude 'general manager' basically said either it is his way or he doesn't want to sell the car.

For me now it is less of question of which car, what price or which credit union, but more of right vs wrong. With a heavy heart, 2 months long wait and a terrible taste dealing with a dealership - I may have to walk away from the deal. :crying:
I'll know tomorrow. If that happens, I may try another Subaru dealer or Toyota/Honda/Volkswagen get my money. I'll of course feel terrible I wasted so much time chasing Ascent.
 

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For what it's worth, when I bought my wife's Honda, they wouldn't take a personal check on the deposit portion over $500, but they would (and did) take a credit card for a deposit (I put $1000 down, which was their minimum for any purchase over the sale value after trade of $25,000)... However once I got my bill of sale I went to my bank that I already had secured financing with, and then they wrote a bank check to the dealership, so the funds were guaranteed.

My next time around I'm planning to not my any money down and finance the entire thing over a longer term to keep payments down. While I can pay for it outright, I personally like the flexibility of keeping money on-hand for any unforeseen expenses related to my house, etc. For me, that interest rate I'm paying is well spent, since I don't have to take it out of my savings account. I know long-term that's not the most cost-beneficial solution, but in the end, assuming I financed, say, $35k, we're talking around $3500 in interest over those 5 years, or about $700 per year. For me, if $700 broke me, I wouldn't be looking at this trim/car.

In the past, when I bought both my Legacy and Outback, I just used Subaru Financing since they had a good deal at the time and Chase happened to be me home bank anyway (one less web login to worry about)... I actually used Chase for my wife's Honda, too.

That being said what a hassle. I think even if it was a slightly higher rate, for simplicity and completing the transaction quickly, I'll just finance through Subaru. I had to take 3 different trips to the Honda place and 2 to my bank for her Pilot. What a headache...


Thanks everyone for the inputs.

I am having a harrowing experience. The external lender (a CU) has loan pre-approved and is willing to write a check as soon as they get a purchase agreement.
The dealer isn't willing to send me a purchase agreement (although I offered if they do that I can bring both checks tomorrow). On top of that the dealer says that I'll have to go through CU DL if I want my credit union to finance, which is like a new loan. They just can't accept a check from them directly as it violates some CU DL rule - a claim that my CU lending department refuted. This seems weird, as for the dealership it should be like an all cash deal - they get two checks for the full amount and its a quick sale. What do they care what arrangement I have with my CU? I said if I do all cash from my account, which I can do and offered to do, would he still have trouble accepting? The extremely rude 'general manager' basically said either it is his way or he doesn't want to sell the car.

For me now it is less of question of which car, what price or which credit union, but more of right vs wrong. With a heavy heart, 2 months long wait and a terrible taste dealing with a dealership - I may have to walk away from the deal. :crying:
I'll know tomorrow. If that happens, I may try another Subaru dealer or Toyota/Honda/Volkswagen get my money. I'll of course feel terrible I wasted so much time chasing Ascent.


I think you don't need a purchase agreement - you need a BILL OF SALE.

You should be able to leave a good faith deposit if you haven't left one yet in order to get that.

If the GM is held up on the fact it's a personal check, why don't you see if they would accept a Bank Check from your branch where you're holding the money? That's certainly more secure since the banks guarantee the funds when the check is drawn up. Make sure you get the appropriate name of the payee for the check, too.

What you are suggesting sounds like they are forcing you to finance, which I don't think has any legal merits. You may want to call SOA and get them involved if necessary.
 

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Discussion Starter · #8 · (Edited)
Thanks Pilot for the tip.

Well not once did they mention that the issue is personal vs bank check. I even offered I can wait for the checks to clear before taking the car home, if that's what they want. And if they want bank check, I can certainly make that happen too - but no one mentioned as that being the issue so far.

Issue here is I have a pre-approved loan in place from a CU, let's say X, who just want a purchase agreement listing car details and price and can give the check (which I presume would be a bank check). X happens to be part of CU DL. The dealership isn't happy with the fact that I already secured the loan with X externally - they want to run credit again and make me go via CU DL again get financing from X, which is ridiculous from my point. When I offered an all cash option, without any financing from X, they didn't agree to that either.
I'd think the motive is commission, and as you suggested, they want to force me to finance through them. And it is this forcing part that I am not liking. Doesn't give me confidence in people I am dealing with. If they had asked nicely I probably would have acquiesced.
I understand that they are there to make money, but through these little games? WTF!

Do you think informing/involving SOA can help?
 

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I think they are wanting the kickback percentage from getting the loan through them and are butthurt you are lending through someone else. I could be wrong but that's what it seems like here.


My next time around I'm planning to not my any money down and finance the entire thing over a longer term to keep payments down. While I can pay for it outright, I personally like the flexibility of keeping money on-hand for any unforeseen expenses related to my house, etc. For me, that interest rate I'm paying is well spent, since I don't have to take it out of my savings account. I know long-term that's not the most cost-beneficial solution, but in the end, assuming I financed, say, $35k, we're talking around $3500 in interest over those 5 years, or about $700 per year. For me, if $700 broke me, I wouldn't be looking at this trim/car.
I personally do not understand why anyone pays cash for a car. If you have that money in savings you should easily be able to find a money market account or even just relatively secure index funds that are going to at least equal if not beat your interest.
So say you got $50k to pay cash on a car. You can dump all that money in a depreciating asset and have no monthly payment or:
Get a loan @ 4% for 72 months and pay $782/month $56304 total
and
take your $50k and put it to work at the same simple interest at 5% and over the same 72 months you will have paid off your car and have $67,500 in that account or more likely you're getting compound interest at 5% so over the same 72 months you will have paid off your car and have $70,355

At any time you feel uncomfortable or something comes up you can always sell your car or pay it off from the funds in the account. Even selling at a loss you will have more net money.

To each their own and I get the safety/security feeling of not having a payment and having something paid off but it's not the best financial path.
 
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Do you think informing/involving SOA can help?
It may not resolve your specific issue but they will want to hear about their dealers doing shady stuff.
 

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Do you think informing/involving SOA can help?
It may not resolve your specific issue but they will want to hear about their dealers doing shady stuff.
Agreed. There is no requirement that you have to finance through the specific dealership.

When I got my pre-approval, that just showed I was a serious buyer (for the Honda). I still had to get the bill of sale and take that to the bank that I was using for my financing. So for you, you’ll need to provide a bill of sale to your credit union and then they’ll send a check for the exact amount outstanding. If you can’t do this in person at a bank you’ll have to get it in the mail.

Then, you take this check to the bank. That’s what constitutes an “all cash” payment. They won’t release the car to you until you pay for it.
 

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For my STI, XT, Ascent, and new Forester the dealer showed me in the system as a cash deal. I had loans secured from the credit union I was using and brought that paperwork with me. My credit union has a ‘blank check’ option where I can bring a check and write it, or they can cut a check off the bill of sale. I always just drove the paperwork right to the credit union and then brought the check back in a few days. Hopefully they allow you to do the same.
 

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Issue here is I have a pre-approved loan in place from a CU, let's say X, who just want a purchase agreement listing car details and price and can give the check (which I presume would be a bank check). X happens to be part of CU DL. The dealership isn't happy with the fact that I already secured the loan with X externally - they want to run credit again and make me go via CU DL again get financing from X, which is ridiculous from my point. When I offered an all cash option, without any financing from X, they didn't agree to that either.

Do you think informing/involving SOA can help?
I'm not sure what's going on there, other than selling after market warranties and such. It's obvious the finance department wants the opportunity to sell you something, even if you don't agree to it. But typically all you have to do is listen and then say 'no'. You don't buy the car until you sign on the dotted line back there.

Thing is, for us, we use CUDL as well. I frequently have customers come in who are pre-approved through their own credit union and because of our buying power, we're able to get them a better interest rate going through that same credit union. You're going to them asking to borrow $40K once every 6 years. We're typically sending them $500,000 worth of loans every single week. Who's going to get the better rate?

I'm in a rather unique market, I suspect. Probably half (or more) of my customers are financially able to come in and stroke a check for anything on my lot they want. The only time I really run into a problem - and that's as a salesman, not you as the customer - is when the customer walks in with a cashiers check already filled out. I'll also note that even if you walk in and stroke a check with my business office ... that's why we have a spot delivery form. You drive it off my lot, you're an owner. If the check doesn't clear for some reason, we'll work with you to get it financed or repossess your car. I don't think any dealership in our area, especially if you're already pre-approved, makes anyone wait for a check to clear before you get to take the car home. (Especially not with tele-check approval!)
 
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