I am a firm believer in a cash purchase as the cheapest way to buy a car. I put off buying a new car for a couple years until I had the cash saved, so last week I picked out the little hybrid vehicle I had my heart set on, negotiated the best price I could for it, and then told the dealer I would be paying cash. The "financing specialist" at the dealership didn't look happy, but he wrote up the paperwork for the cash deal. Then, to my surprise, he put a credit application in front of me. When I asked him why he needed me to fill it out, he said that "the Patriot Act" required him to get the information. What's going on?
The USA PATRIOT Act is used as an excuse for a lot of things, but using it to convince people to complete an unneeded credit application is something else! The "Patriot Act" (as it's often called) simply does not require the auto dealer to do anything for a cash deal. The dealership will have to get some identification from you to complete a government report if you pay cash or with a bank check that doesn't come from loan proceeds, but by no means should you have to complete a credit application if you are making a cash deal for the vehicle purchase.
The likely reason for the dealer's request is to run your credit through several local banks to try to lead you "down the garden path" to finance through the dealer rather than pay cash. The dealer's incentive to do this is a share of the interest you would pay on the loan.
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The USA PATRIOT Act is used as an excuse for a lot of things, but using it to convince people to complete an unneeded credit application is something else! The "Patriot Act" (as it's often called) simply does not require the auto dealer to do anything for a cash deal. The dealership will have to get some identification from you to complete a government report if you pay cash or with a bank check that doesn't come from loan proceeds, but by no means should you have to complete a credit application if you are making a cash deal for the vehicle purchase.
