Can a Car dealer force you to either pay cash or use their financing?

[tpduke112]

I’m looking at buying a used M3, but from an Acura dealership. After discussing numbers, they said they “don’t allow outside financing”. Below is the actual language on their site. I have bought and sold probably 10 cars and literally never heard this before. Ive used my credit union and provided the dealership (or private party) a check in every other instance. I’m confused as to how this could even be legal? Am I missing something or are they just making up pandemic rules that aren’t enforceable? I do want the car but I am not going to be told who I have to finance with…



Only certified funds (cash, personal check, etc.) Or financing offered by the dealership are acceptable forms of payment. At this time, we are unable to accept credit union drafts, facilitate export deals, or offer any dealer to dealer wholesale.

 

[RayK]

I suppose that's the business' choice. What's the terms for their financing? If it's too out of line with the market, you too have a choice to walk away.

 

[3sr+buyer]

Cars are a seller's market right now, so it is not surprising that a dealer would want to force buyers to use financing offered through it (which presumably has some incentive to the dealer) and not do anything that involves any additional risk to it (such as the risk that an outside bank or credit union check is counterfeit).

 

[tpduke112]

I suppose that's the business' choice. What's the terms for their financing? If it's too out of line with the market, you too have a choice to walk away.

Didn’t even get there because I was so confused by the scenario. I guess I will check but the set up is wild to me. I may pay cash to avoid it all together but 1.49% money is pretty cheap.

 

[father_of_6]

LOL. They won't let someone else pay for the car on your behalf? Sounds like a slimy F&I lie to me.

 

[tpduke112]

Cars are a seller's market right now, so it is not surprising that a dealer would want to force buyers to use financing offered through it (which presumably has some incentive to the dealer) and not do anything that involves any additional risk to it (such as the risk that an outside bank or credit union check is counterfeit).

I hear you. I should know this already I guess but how is there risk of a certified check from a credit union being counterfeit but not a personal check?

LOL. They won't let someone else pay for the car on your behalf? Sounds like a slimy F&I lie to me.

Right??? I feel like I’m drinking crazy juice because this sounds like a bunch of nonsense.

 

[terranx]

If it's a good enough deal, it might be worth just refinancing immediately. The credit union I used (PenFed) offers the same rate as new loans for refinancing a 2021 or newer car.

 

[tpduke112]

If it's a good enough deal, it might be worth just refinancing immediately. The credit union I used (PenFed) offers the same rate as new loans for refinancing a 2021 or newer car.

Yea, that’s what DCU said when I called them. It just seems like so much extra. Sellers market or not, it doesn’t seem like a dealership should be able to tell you that you can’t bring outside financing.

 

[UncleCreepy]

I had a similar issue when I bought my electric motorcycle last year. They told me that financing is the only option. Only when I told them that we don't have a deal if they insist that they won't accept a bank draft that they finally gave in.

In hindsight I should've walked out, but that's a whole different story.

 

[RayK]

Well I can only gather that with the dealer arranged financing, they (the dealer) are probably getting money out of it. And I agree that any financial institution's check is wholly better (in the terms of authenticity) that a personal one. Whoever is going to receive the funds should be verifying it anyway.

I've bought my last two cars (the 3 and the 2000 BMW before it) in full by using bank transfers. It's been since 1984-89 that I've had to finance a car.

 

[BMWM3Man]

BMW Finance manager at dealership told me the last time I bought a car I had to keep their financing to get the incentives...I said sure. And refinanced.

 

[3sr+buyer]

I hear you. I should know this already I guess but how is there risk of a certified check from a credit union being counterfeit but not a personal check?

There have been counterfeit cashier's check scams, since cashier's checks do not have a uniform appearance across banks. Many car transactions are done during hours when banks are closed, so it is not as easy to verify on the spot with the bank that a cashier's check is real.

Of course, personal checks can also be counterfeit or just not have sufficient funds. But that appears to be why car dealers will run credit checks and structure the deal as a one payment finance deal in that case. So if the check is returned unpaid, the buyer is then in default on the finance agreement.

 

[father_of_6]

@tpduke112 - is it that good of a deal to buy the used one? The used market is very overpriced right now. It might only be marginally more expensive to buy a brand new M3, and then you'll get the latest goodies.

 

[brancky3]

If it's a good enough deal, it might be worth just refinancing immediately. The credit union I used (PenFed) offers the same rate as new loans for refinancing a 2021 or newer car.

I agree, often it's actually just easier to use the dealer financing and then refinancing after. This is what I did (and will do) with my Model 3 on order instead of getting with my credit union, waiting for a check to be sent, confirming receipt, etc etc.

@tpduke112 - is it that good of a deal to buy the used one? The used market is very overpriced right now. It might only be marginally more expensive to buy a brand new M3, and then you'll get the latest goodies.

Some people need a car now though and are left with very little choice.

 

[mswlogo]

I ran into that. They get a kickback from who they are financing with. They would not explain why they were doing it. It was the best deal around but because they wouldn’t explain why, I walked. They would not let me pay cash. Watch out there might be early pay off penalties too. I’d walk.

 

[rpiotro]

BMW Finance manager at dealership told me the last time I bought a car I had to keep their financing to get the incentives...I said sure. And refinanced.

When I bought my Q50 hybrid new in 2014 I was prepared to pay cash. The F&I guy told me there was an additional incentive of $500 if I financed. I only had to wait 6 months before paying off the load. So I did just that.

 

[BMWM3Man]

When I bought my Q50 hybrid new in 2014 I was prepared to pay cash. The F&I guy told me there was an additional incentive of $500 if I financed. I only had to wait 6 months before paying off the load. So I did just that.

Thats almost what I did but...I didn't wait 6 months.

 

[ItsNotAboutTheMoney]

I’m looking at buying a used M3, but from an Acura dealership. After discussing numbers, they said they “don’t allow outside financing”. Below is the actual language on their site. I have bought and sold probably 10 cars and literally never heard this before. Ive used my credit union and provided the dealership (or private party) a check in every other instance. I’m confused as to how this could even be legal? Am I missing something or are they just making up pandemic rules that aren’t enforceable? I do want the car but I am not going to be told who I have to finance with…



Only certified funds (cash, personal check, etc.) Or financing offered by the dealership are acceptable forms of payment. At this time, we are unable to accept credit union drafts, facilitate export deals, or offer any dealer to dealer wholesale.

I can't find anything in Tennessee law about that, but they cannot require you to purchase unnecessary options as a condition of sale.

I'd check with whatever office is responsible for dealer regulation to see if you can get an answer on it. It might be a loophole that as long as they offer a cash purchase, they can do it.
(Of course Tennessee has a law that a manufacturer or wholesaler can't force the dealer to take specific financing)

 

[terranx]

When I bought my Q50 hybrid new in 2014 I was prepared to pay cash. The F&I guy told me there was an additional incentive of $500 if I financed. I only had to wait 6 months before paying off the load. So I did just that.

You don’t actually have to wait. You can pay it off on day 1. The dealer just won’t get their kickback if you pay it off too soon. But **** ‘em.

 

[BMWM3Man]

You don’t actually have to wait. You can pay it off on day 1. The dealer just won’t get their kickback if you pay it off too soon. But **** ‘em.

The should have given us a better price!