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Discussion Starter #1
This may seem like an obvious question...

I have already been approved by eLoan for a 4.85% loan. I told the dealer that I don't want them to "shop around" for a better rate and that I would not allow them to do a credit check. He said that it is standard procedure for them to do a credit check just to make sure I'm not a credit risk.

Isn't it really up to the financial institution to determine whether or not I'm not a credit risk. If the financial institution says, "yes, we'll lend the borrower the money," isn't that all the dealer needs to know?

My biggest worry is that the dealer will now (behind my back) try and see what type of financing they can get me. I'll just walk in ready to sign the paperwork and find out that they farmed out my credit info to a dozen banks just to see what kind of rates they can get me.

As we all know (or should know), every time a financial institution does a credit check your credit score gets lowered. Sure, it's only by a small amount, but that multiplied by the number of financial insittutions that a dealer works through, can lower your rate by a significant amount.

Again, I may just be paranoid :confused:

(4 weeks left until my SBP EX-L w/ nav arrives!)

-pj27
 

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One more reason to deal with the most honest dealer posible, rather than the one promissing the best price.
 

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PJ -

Same thing happened with me with my last 2 car purchases. With the first vehicle,I paid cash in full on the 1st one (a week later from the time I drove off with the car). For the PilotI mailed a check to Kolbe Honda 7 days later.

1. They're gonna "TRY" to get you a lower rate
2. They want to make sure that you can "AFFORD" the vehicle, especially if you're planning on walking out with the car, and promising to mail the check to them, they want to make sure that you are good for it.

BTW - are you still going with Kolbe?
 

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Discussion Starter #4
Yup. So far Kolbe Honda is the only dealer that has promised me the color/model I want <b>and </b> at MSRP. Funny thing is that although they say MSRP, the window sticker says they are charging a $2,500 markup. Isn't it usually the other way around? :)

Thanks for the advice Jason. I hadn't thought of going there even though it is only 2 minutes from my mom's house.

I guess the dealer is just making sure they do a little CYA before they hand the keys over.

-pj
 

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I was in a similar situation as you PJ27, but I was able to use it as an advantage. E-Loan approved me at %4.85 so I just showed it to the dealer and said, "Beat this rate or I'll get my financing done elswhere!". After a couple of days they called be back and got me %4.59 through Chase-Manhattan Bank.

I guess dealers get some sort of cut when the financing goes through them, or maybe they just get thier money faster than other ways such as E-Loan which sends the dealer a check in the mail.

Don't be so paranoid. Just try to get the lowest rate possible and don't believe them when they try give you a lower rate IF you buy more stuff from them. Good luck!!
 

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OAC

If the dealer is just shopping rates for you, they do not need to run a credit check. Any offer that they make to you will be OAC, On Approval of Credit. IF they find a rate to your satisfaction AND you are willing to accept it, you would need to subject yourself to a credit rating at that point.
 

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I read something about this on one of the car buying sites - I only wish I could remember which one. They do not need to do a credit check if you already have your own financing....that's garbage. I went into my Honda dealership and told them I had my own financing and they were completely fine with it.

I'd search around on the web and try to find one of the car buying sites that talks about this.

Best of luck!
 

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Guess it comes down to;

Are they offering you credit,
and/or
Are they allowing you to take the vehicle at their financial risk (Before it is paid in full).
If either is true it would seem prudent to run a credit check, if neither is true, and they run one I would be a bit annoyed!
 

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Discussion Starter #9
The dealer is not extending me credit. I am going through eLoan. According to eLoan they just wire the funds directly to the dealer upon receipt of the eLoan agreement which the dealer must send.

I guess since I take delivery of the car before they get their funds from eLoan, they may want to have some sort of insurance. But really they should trust eLoan just as they trust any bank.

Still confused. I'm calling eLoan now and seeing what they say.
 

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My personal thought is if YOU want them to run something fine. If they want to find you a lower rate, fine, do it and go on what you are saying. I know many people over rate themselves for credit but if you don't want it run and are providing them an approved (not just pre-approved) set of paper work there is no reason for them to run that paper work. They could hold a personal check from you while they wait for the loan to come through. When the loan arrives they could then return your uncashed check. I guess it depends on your integrity as well as how well the dealer knows you. Have you done business there before? At the very least they could verify your information such as where you live, work, and income without having to run a full credit report.

(I'm no finance consultant, so take these words at face value. My dealer just held a check from me while I brought in the funds. And I had done business there in the past.)
 

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Gentle Paybacks

Well, when I got my vehicle, I paid cash. I delivered the check to them and then waited for it to clear the bank (at MY insistence). When the check had was cleared, I drove off in my vehicle. They were completely insulated from loss and liablity.

HOWEVER, the finance guy, who does the title work, etc., had me sign a paper wherein they wanted to run my credit. I asked why. He said that is how it was done. I said, "With cash?" Made no difference.

SO ... when Honda called me, I gave my dealer 5 star ratings, except the finance guy. I gave him a very low score. The woman was surprised but, that was my impression of him.

My opinion is that if a vehicle is completely paid for, and the money is in their hot little hands, then WHY do they need to run a credit check on you? It makes no sense.

Just my two cents...
 

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Discussion Starter #12
Glad I'm not alone in being confused. Keeping things in perspective, I know that a single credit check is not going to hurt my credit rating. However, there is a sense of violation of privacy that is still bothering me. It's just my paranoia, I know.

I only hope that my salesman will abide by my wishes and not farm out my application to multiple financial institutions.

Just hope that in the future, dealers will be more up front about their privacy disclosure. I had to really read the fine print at the bottom of the sales application to see that the dealer has the right to give my credit information out to financial partners.

They should have to legally say (in other words not just in writing), "We are going to check your credit. We will be asking this bank, this bank and this bank what kind of rate they will give you. They may run a credit check themselves which will in turn decrease your credit score by x points each time. Do you consent to this agreement?"

We can only wish that the lawsuits such as the one at Honda of Santa Monica (http://www.honda-pilot.org/forums/showthread.php?s=&threadid=1384 ) will bring about a change in the way dealers sell cars.

My $0.02
 

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Do not let a dealer run your credit if you are getting financing elsewhere!!! They do not have the right to run your credit if you are handling the financing outside of the dealer. Your credit score may or may not be impacted but most people do not want to take that chance. Granted, if you have a credit score that is above750 you probably will have no worries if they run your credit. However, when dealing with credit scores below 700, you could have some problems with even just one inquiry. It all depends on each individual circumstance.

Bottomline: do not let the dealer run your credit unless you are asking them to assist with financing.
 

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almost all dealers want to run your credit to get you a rate with a bank they get kickback from.

I had approved financing from my credit union when I walked in the door and they didnt run a credit check for me.

I gave them a personal check for $1500 and came back 3 days later with the balance - I've done this before and not had a problem with several dealers.

Jason
 
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