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Please help me understand the dealer's sale contract. My local credit union pre-approved me for an auto loan and gave me a blank check up to $35,000. I went to a chevy dealer in SoCal after negotiating the deal--about $30,000 out the door. I was presented an installment sale contract showing Federal Truth-In-Lending Disclosures with APR, loan term, monthly payments, and finance charge that I felt were not applicable to me because I had a blank check. I walked out wanting to get some advice.

The F&I manager says it's standard that the dealership's contract show that information in the event the check from my credit union does not go through. The F&I manager also said that this is a standard contract, and I would receive a receipt showing "paid in full" for the agreed-upon out-the-door amount of the car when I sign the credit union's check to the dealership. I was told that the financing terms on the contract are just for "what-if" scenarios.

Is the F&I manager correct? Am I paranoid? Is there a different contract for buyers who pay cash or pay with pre-approved blank checks? Please advise. This is the first time I've purchased a new car from a dealership. My past experiences have been buying used with cash and leasing.
 

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Hmmm, I really haven't heard of such a thing, but I can see a dealers point of view. Maybe do this instead. Pay them and let them wait for the check to clear. That shouldn't be more than a few days. Have them hold the car and not let anyone open it in any way. That should work for both parties.
 

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Sounds to me like they're trying to push you into financing through them. I would not sign anything related to that financing paperwork, and I would insist that you are doing a cash sale and all of that must be removed from the sales contract before you sign.

I purchased a car that way before (financed, but NOT through the dealer) and there was absolutely NOTHING on the dealer's paperwork related to financing. They did not know it was being financed, and the sales contract just listed it as a cash sale.
 

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I think perhaps I ran into this when I bought the Volt and the ELR. In both cases I paid by personal check. If memory serves me correctly, for the Volt at first they wanted a cashier's check in advance. then a check in advance, and then decided that a personal check on the day of purchase would be OK. For the ELR they took a personal check but kept sending me all these finance application forms. They also insisted in running a credit check. I wasn't thrilled with that because it dings your credit score but could see their point. Insisting on filling out the credit application seemed a bit much.

I don't see where the disclosure hurts anything. It's only a "what the terms would be if you financed through us" document and, since you're not financing through them, it has no effect.
 

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You could always come back and pick it up when the check clears if that is what they are worried about.

Usually, you have to sign some stuff should financing fall through and you have already taken the car you will pay some fees for mileage and damage and such.
 

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Just standard procedure. Dealer is always going to try to sell you financing. Expect it. That's the guys job. I've been in exactly your shoes, a pre-approved Credit Union bank check to pay for the car. I've had it go both ways, usually they can't beat the rate, and I used the credit union check. Once they came within 0.1%, and I decided close enough, I'll do it. Another time, I was putting a lot of cash down (like $15K), and I got a 0% surprise manufacturer financing deal (after all other discounts). Your choice. Financing a car is a big hit to your credit report. Running a credit check... fact of life.
 

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Consider this a blessing in disguise. Are you sure you want to borrow $30-35K on a car? Instead of getting a new car now and paying for the next 4 to 7 years to pay off the loan, drive a hoopty while paying yourself the car payment you would have paid, and every year or so upgrade to a better car. Eventually you'll be able to buy a new car with a big wad of cash, no financing paperwork to sign.

I used to have an 845 credit rating and now realize that it was stupid to be chasing the high credit score. My new goal is to have 0, no credit rating whatsoever, paying cash as I go. It's amazing how much money you have when you have no car payments.
 

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Please help me understand the dealer's sale contract. My local credit union pre-approved me for an auto loan and gave me a blank check up to $35,000. I went to a chevy dealer in SoCal after negotiating the deal--about $30,000 out the door. I was presented an installment sale contract showing Federal Truth-In-Lending Disclosures with APR, loan term, monthly payments, and finance charge that I felt were not applicable to me because I had a blank check. I walked out wanting to get some advice.

The F&I manager says it's standard that the dealership's contract show that information in the event the check from my credit union does not go through. The F&I manager also said that this is a standard contract, and I would receive a receipt showing "paid in full" for the agreed-upon out-the-door amount of the car when I sign the credit union's check to the dealership. I was told that the financing terms on the contract are just for "what-if" scenarios.

Is the F&I manager correct? Am I paranoid? Is there a different contract for buyers who pay cash or pay with pre-approved blank checks? Please advise. This is the first time I've purchased a new car from a dealership. My past experiences have been buying used with cash and leasing.
Hi this is normal and called an "option Contract" for exactly the reason the F&I mgr explained....(just in case...the check is fake or doesnt clear). It is just good business because you take delivery of the car and it is the only guarantee the dealer has of getting paid.
 

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Please help me understand the dealer's sale contract. My local credit union pre-approved me for an auto loan and gave me a blank check up to $35,000. I went to a chevy dealer in SoCal after negotiating the deal--about $30,000 out the door. I was presented an installment sale contract showing Federal Truth-In-Lending Disclosures with APR, loan term, monthly payments, and finance charge that I felt were not applicable to me because I had a blank check. I walked out wanting to get some advice.

The F&I manager says it's standard that the dealership's contract show that information in the event the check from my credit union does not go through. The F&I manager also said that this is a standard contract, and I would receive a receipt showing "paid in full" for the agreed-upon out-the-door amount of the car when I sign the credit union's check to the dealership. I was told that the financing terms on the contract are just for "what-if" scenarios.

Is the F&I manager correct? Am I paranoid? Is there a different contract for buyers who pay cash or pay with pre-approved blank checks? Please advise. This is the first time I've purchased a new car from a dealership. My past experiences have been buying used with cash and leasing.
Sounds like standard operating procedure based on what you stated above
Why would it say 'Paid in Full' ? Your bank has a lien on the vehicle, you do not own it until you pay the bank back.
 

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I gave them a cheque at 9:30 in the morning. I think the salesman ran out the back door and down the street to my Credit Union who immediately certified it at the dealer's expense. No borrowing was involved. Meanwhile they were doing an incomplete dealer prep, which seemed more like a delay tactic until they had the funds in hand. I was on my way home by 11.

So it didn't apply in my case but it may have helped that I was known to them and to the CU, and that the dealer also had an account at the same branch.
 

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Discussion Starter #12
Thanks for all the feedback. I was just super paranoid because of my own ignorance in never having seen a purchase contract. Seeing an interest rate, loan term, monthly payment, and total interest paid on the purchase contract when paying with a check just made me very skeptical. I was worried the dealer could do some kind of switcheroo and claim my check was invalid, and as a result, their financing terms--which are undesirable to me--would kick in automatically.

Based on the recent feedback, it appears the financing terms disclosure on the purchase contract are normal. I guess it's back to the dealership.
 

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Just have the F&I guy earn his paycheck and have him contact your CU loan officer for all the loan specifics which he'll fill in on the contract.
 

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Based on the recent feedback, it appears the financing terms disclosure on the purchase contract are normal. I guess it's back to the dealership.
Just make sure before you sign it shows cash from buyer is equal to the credit union check amount
 

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Consider this a blessing in disguise. Are you sure you want to borrow $30-35K on a car? Instead of getting a new car now and paying for the next 4 to 7 years to pay off the loan, drive a hoopty while paying yourself the car payment you would have paid, and every year or so upgrade to a better car. Eventually you'll be able to buy a new car with a big wad of cash, no financing paperwork to sign.

I used to have an 845 credit rating and now realize that it was stupid to be chasing the high credit score. My new goal is to have 0, no credit rating whatsoever, paying cash as I go. It's amazing how much money you have when you have no car payments.

Misunderstood the question?
 

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Check the final payment amount and number of payments carefully when you do close the deal on financing. I had a car dealer add an extra year onto the loan one time, keeping the monthly payment exactly the same so I didn't notice. When I got home with my new car (not my current 2013 Volt, a previous car) and noticed it was a 6 year loan instead of 5 I called the dealer who said "oh the computer always does that, come back tomorrow and we'll give you a new 5-year loan contract". I wonder how many people didn't notice until 5 years later when they discovered they had an extra year of car payments?

I paid cash for my Volt, having saved up the money over a couple of good years. It was funny to see the salesman's face after he asked how I was going to finance it. You would think he had never seen anyone pay cash before.

This was the first time I had paid for a new car with cash. It was somewhat anticlimactic, hand over the check, take the keys and drive away. That's it? I guess I should have been screaming "I'M DEBT FREEEEEEE" all the way home.
 

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I used to have an 845 credit rating and now realize that it was stupid to be chasing the high credit score. My new goal is to have 0, no credit rating whatsoever, paying cash as I go. It's amazing how much money you have when you have no car payments.
Keep in mind that your auto insurance now uses your credit score to help set your rates. The quest to zero is not wise even if you do pay for everything in cash.
 

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Keep in mind that your auto insurance now uses your credit score to help set your rates. The quest to zero is not wise even if you do pay for everything in cash.
Auto insurance is such a tiny portion of my nest egg, I don't care. Someone with an 800+ credit score is usually on track to pay over $100K in interest alone over a lifetime, all lining the banks pockets, paying for bank VP bonuses, and giving them those really nice shiny buildings and lobbies. The increase in auto insurance rates because of a credit score is like pissing in an ocean compared to compounding interest working against you. it's like walking away from dollars to pick up pennies.

I'm on a vendetta against insurance companies too. I made the mistake of making a $3K claim for body work when my a stop sign materialized out of nowhere and mangled the front end, roof, and passenger side of my volt. My insurance company doubled my rates which caused me to promptly drop them after decades of never making a claim. My new rates with another company aren't much better. The next time my volt was involved with a tussle with a kamikaze deer, I paid that $3600 out of pocket to avoid additional insurance hatred. So now I cranked up my deductible to obscene levels (beyond what the car finance companies would like, so I paid off the cars entirely) and plan to pay anything out of pocket except for a total loss. And even then, I may just use cash to replace any car I total rather than make a claim (I hate them so much). So the insurance is now to cover my butt in case something really, really bad happens involving liability and medical (knock on wood). It's amazing how much cash you can amass when you don't have any car payments.
 

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Auto insurance is such a tiny portion of my nest egg, I don't care. Someone with an 800+ credit score is usually on track to pay over $100K in interest alone over a lifetime, all lining the banks pockets, paying for bank VP bonuses, and giving them those really nice shiny buildings and lobbies. The increase in auto insurance rates because of a credit score is like pissing in an ocean compared to compounding interest working against you. it's like walking away from dollars to pick up pennies.

I'm on a vendetta against insurance companies too. I made the mistake of making a $3K claim for body work when my a stop sign materialized out of nowhere and mangled the front end, roof, and passenger side of my volt. My insurance company doubled my rates which caused me to promptly drop them after decades of never making a claim. My new rates with another company aren't much better. The next time my volt was involved with a tussle with a kamikaze deer, I paid that $3600 out of pocket to avoid additional insurance hatred. So now I cranked up my deductible to obscene levels (beyond what the car finance companies would like, so I paid off the cars entirely) and plan to pay anything out of pocket except for a total loss. And even then, I may just use cash to replace any car I total rather than make a claim (I hate them so much). So the insurance is now to cover my butt in case something really, really bad happens involving liability and medical (knock on wood). It's amazing how much cash you can amass when you don't have any car payments.
You sound like a RECKLESS DRIVER??? :))
 

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Sounds like standard operating procedure based on what you stated above
Why would it say 'Paid in Full' ? Your bank has a lien on the vehicle, you do not own it until you pay the bank back.
Because the dealership has been paid in full, the dealership has no hand in the financing.
 
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