Paying For A Ride in Straight Ca$h
November 20, 2014 10:56 AM   Subscribe

I'm curious how those with a large amount of money at their disposal could go into a dealership and say "I'll take that"

So if someone with a lot of disposable income decides they want a brand-new Audi A8, and walks into a dealership, how does that transaction occur? I know that as a result of the "drug war" in the 80's, many dealerships will NOT take cash for vehicles. Is this something you could put on a black AMEX? I guess I'm curious particularly for the haggling factor. You don't know what the price is, so you can't come in with a cashier's check for X amount of money, and how would a dealership feel about coming to an agreement on a price, but then you tell them: "Well, gotta go over to the bank and get you a cashier's check, BRB!"

These thoughts kept me up for about 2 hours last night...
posted by kuanes to Travel & Transportation (47 answers total) 6 users marked this as a favorite
Best answer: I have a very wealthy and ridiculous friend who buys his cars exclusively with cash. I was with him for one such transaction, where they had him wait for an hour or so while a dealership employee went to the bank to verify that the money was not counterfeit and then he just drove off.
posted by banannafish at 11:01 AM on November 20, 2014 [10 favorites]

Best answer: If you had enough money in a checking account, and the dealer was willing to accept it, you could write a regular check. That's what I did when I bought my Civic. You hash out the price with the dealer, then write a check for the amount you ultimately agree on. I don't remember any more hassle with this than you'd have writing a check for anything else.

This implies that you could in theory do this for an amount up to $100 million.
posted by Anne Neville at 11:03 AM on November 20, 2014 [2 favorites]

I have written a personal check to pay for a car. Shopped on the Internet, got a quote from a dealer, went into the dealership, wrote them a check and drove the car home.
posted by agatha_magatha at 11:04 AM on November 20, 2014

how would a dealership feel about coming to an agreement on a price, but then you tell them: "Well, gotta go over to the bank and get you a cashier's check, BRB!"

That's the only way I've bought cars for a long time. (Not a lot of disposable income but I'm a relentless saver and can't stand debt.) It's not unusual at all.
posted by headnsouth at 11:05 AM on November 20, 2014 [3 favorites]

Best answer: You can absolutely use a black amex. You can absolutely also use a cashier's check, much in the same way you do for a house closing - I bought my car by bringing a cashier's check for a few hundred more than what I thought the final number would be, then when all was said and done the dealership simply wrote me back a check for the difference.
posted by scolbath at 11:06 AM on November 20, 2014 [5 favorites]

You don't pay in literal cash. You just pay with a personal or cashier's check. I have been lucky enough to be able to buy a (modest) new car without financing off of the lot, and the transaction was completely uneventful.

Most dealerships I've dealt with have a limit for credit card transactions, given that there's a substantial transaction fee with credit cards that doesn't exist with checks. I would have used my credit card for the entire transaction to get cash back rewards if they had allowed me, but instead I charged up to the cap on my Visa, paid the rest by a personal check, and then paid off the credit card the next month.
posted by eschatfische at 11:06 AM on November 20, 2014

Yep I bought my last car with a cashier's check. Haggled over price, signed some papers, said "be back in 20 minutes", and came back with a cashier's check, NBD. I know my parents bought their last few cars with personal checks -- the dealership I was buying at didn't accept them.
posted by brainmouse at 11:06 AM on November 20, 2014 [1 favorite]

I've used a credit card, a cashier's check and probably some other stuff. My father bought cars over the phone.
posted by BibiRose at 11:07 AM on November 20, 2014

My dad tried to buy a Civic on his credit card and was told no. The fees charged to the dealer would be substantial. But that was after he already negotiated the price down as far as possible. If you paid sticker price I bet the objections would suddenly disappear.
posted by mullacc at 11:08 AM on November 20, 2014

(and in case it's relevant, mine was a new car in the $20K range, my parents' were new cars in the $30-$40K range. Not Audi A8s, but not $2000 for a beater either)
posted by brainmouse at 11:08 AM on November 20, 2014

"how would a dealership feel about coming to an agreement on a price, but then you tell them: "Well, gotta go over to the bank and get you a cashier's check, BRB!""

They're fine with that. Or you can write a personal check. Or you do a wire transfer.

Dealers don't have to take credit cards in most cases and many don't because of the transaction fees, but if they do take credit cards, yeah, you just run your credit card.

I have paid cash for a car twice (from a dealer) -- just boring little bitty cars, nothing fancy. In both cases I knew about what I wanted to spend and had the money in a particular account. I haggled and settled on the price. In one case I just wrote a personal check; in the other my bank wired it. You still have to go through all the insurance verification, title transfer, etc., so you don't exactly jump in and drive off, it's still an obnoxious amount of paperwork.
posted by Eyebrows McGee at 11:10 AM on November 20, 2014

Yeah, I've bought every car I've ever owned with cash (literal envelopes full of bills). I mean, they were cheap cars, bought used from a dealership, but there's nothing very weird about it.

I suppose it might be different if you were buying a $90,000 car rather than a $9,000 car.
posted by 256 at 11:10 AM on November 20, 2014

At Lexus dealership I worked at briefly in college, someone came in asking to buy a $60k SUV for all cash. They told him to come back in an hour, presumably to give them time to clean and prep the vehicle. When the guy returned the FBI was there to question him. This is what I was told but I did not witness it myself.
posted by mullacc at 11:12 AM on November 20, 2014 [1 favorite]

Another vote here for 'not actual cash, they'll take a personal check' --- in fact that's pretty much what I did with my current car: I paid 2/3 of the price on the spot with a check, then made payments for the rest (I wanted it that way, instead of paying the full price at once: sometimes it's good for your credit rating to show you've had a loan approved & paid off).
posted by easily confused at 11:12 AM on November 20, 2014

There's also the "blank check auto loan," where you get preapproved by the bank for a loan up to a certain amount and they hand you a blank check and you fill out the amount once you negotiate the purchase price.
posted by Jahaza at 11:18 AM on November 20, 2014 [1 favorite]

Yep, I watched my dad pay for a new car with a regular check. Presumably the dealership verified that it was good, and we drove off. This was about $18k.
posted by BlahLaLa at 11:26 AM on November 20, 2014

Best answer: We tried to put our car on our credit card. The dealership wouldn't let us do that without bumping up the price by 1.5% to cover the credit card processing fee. We wrote a personal check instead.
posted by chevyvan at 11:27 AM on November 20, 2014

Response by poster: Thanks for these answers thus far. I cannot wrap my head around a dealership accepting a personal check for $20K, for some reason.

I guess I should have been a bit more specific, in that I know (and have done so) that buying a $2K- $5K car with cash is commonplace, I was wondering about luxury/sports cars.
posted by kuanes at 11:29 AM on November 20, 2014

I bought my last 2 cars with a cashier's check. Not unusual at all. Actual cash in a briefcase might raise some eyebrows, however.
posted by bedhead at 11:29 AM on November 20, 2014

There is nothing new under the sun. Previously on Ask MeFi: What are the mechanics of buying an expensive new car "with cash"?
posted by Mr.Know-it-some at 11:30 AM on November 20, 2014 [2 favorites]

I cannot wrap my head around a dealership accepting a personal check for $20K, for some reason.

They'll take a personal check for much more than $20K, for what it's worth.

There isn't significant risk for the dealership by taking a personal check. If the check fails to clear, they generally have enough information about you to recover the car. Further, check fraud at that level is sufficiently criminal for the police to get involved, so the risk to the perpetrator is significantly higher than, say, a $100 grocery purchase.
posted by saeculorum at 11:32 AM on November 20, 2014 [3 favorites]

I just bought a car with a personal check (>$20K). They did do an ID check and an OFAC/Treasury check to make sure we weren't laundering money, but that was about it.

The manager said "if the check bounces, we know where to pick up the car."
posted by JoeZydeco at 11:33 AM on November 20, 2014

My Civic was new, and was $14-something K. I don't know if the process would have been any different for a much more expensive car.
posted by Anne Neville at 11:33 AM on November 20, 2014

Best answer: This was in Australia in the 80s, but my uncle did indeed pay literal cash money for a luxury car - he walked into the Lexus dealership with a briefcase full of bills and drove out in his AU$70k new car. Total anecdata, and probably very unlikely now (you'd just use your black Amex, as you say) but it has happened.
posted by goo at 11:37 AM on November 20, 2014

My parents (retired) do this now when they buy a car. My dad also uses the negotiating tactic of researching the price he's willing to pay thoroughly beforehand and then showing (not sure how, through his check register?) the dealer that he has $X in the account and will buy the car for that amount, or he's perfectly happy to walk away. It sounds like it usually takes a few hours of sitting in the dealer's office before they agree, so he must drive a fairly hard bargain, but one that ultimately is worthwhile enough for the dealership.
posted by MsMolly at 11:48 AM on November 20, 2014

My dad always paid up front for his cars, though I'm not sure if he used actual cash or a check. I think cash, though. We're talking regular new sedan-level cars (i.e., not luxury cars, but not junkers or economy models either). Alas, I never have enough cash flow to do the same....
posted by velvet_n_purrs at 12:00 PM on November 20, 2014 [1 favorite]

Best answer: You generally cannot put more than a deposit on a credit card because of the high transaction fees involved. I always try to maximize the amount that they will accept on a card and it is usually just a thousand or two. There is also almost no chance that the FBI would take an immediate interest in a cash transaction, because it wouldn't be their jurisdiction. Any cash transaction over $10,000 requires a report to the Treasury Department via a Form 8300. As a high stakes poker player, I am often involved in that -- most banks and businesses will warn you that they would have to report it as if they expect me to say "never mind, then." I'm pretty sure that is something they shouldn't do. Some banks will file "Suspicious Activity Reports" for amounts much, much lower to the Financial Crimes Enforcement Network, who does the original investigation of these things. I prefer to have the money transferred electronically whenever possible because I'm aware of a number of people who have been forced to surrender their cash at airports or in other law enforcement encounters and they have to file suit to get it back and it is a massive hassle. A lot of players convert money to very high demonination casino chips to avoid this problem. It is my assumption that some folks at the Treasury department get automatically informed of any large wire transfers in the post 911 world, but who knows?

I have a Tesla on order, and in my conversations with them, they have suggested that I just wire the money from my bank to theirs, which is what I intend to do if they ever manage to actually make the damn car. With previous cars, I have paid a mix of cash and check. I don't bother to get it certified -- they can call the bank and verify the funds are available or they can hunt me down and take the car back. Usually, the dealer doesn't process the actual title transfer until the funds have cleared anyhow.
posted by Lame_username at 12:11 PM on November 20, 2014 [2 favorites]

I have always paid for my vehicles (from Mercedes to Fords) with a check.
posted by WalkingHorse at 12:11 PM on November 20, 2014

Best answer: I think most times when people say "I bought a car with cash" they do not mean actually buying it with a suitcase full of used $20s. They mean "cash" as in unfinanced; i.e. they bought the car outright. Similarly, if someone says "I bought this house cash" they probably didn't bring dollar bills to the closing, they probably used a cashiers check or wire transfer or something, but the important characteristic is that they didn't have a mortgage.

But yeah, car dealers are in the business of selling cars and I've no doubt they would take a suitcase full of dirty nonsequential bills covered in cocaine residue, if that was what was going to make or break the sale. For an Audi A8, I suspect it'd be something of an exception, but it totally happens for less-expensive cars all the time.

I once bought a used car with my father for something like $5k, and we paid in actual Benjamins due to an argument with the bank who wanted to charge something like $20 for a cashiers check from a savings account, which I was ready to shrug and pay but my father thought was totally outrageous, so we just got an envelope of 100s instead and took them to the dealer. Nobody blinked. Didn't even get escalated to the sales manager or anything, we just gave the sales guy the envelope, he counted it out, we signed some other papers, finis. But that was five thousand bucks, not eighty thousand; big difference.

I've heard anecdotally about people putting cars on credit cards (generally in order to get the rewards points) but when I was at a local Chrysler dealer last week I noticed a sign on the sales floor that said the maximum credit card charge they would run is $300. So I guess they won't do that anymore — makes sense, since they are probably losing a percent or two in credit card fees, which is significant to a dealers' margins.

Whether a dealership will accept a personal check for a large amount is probably at the discretion of the dealership itself. I've never seen a dealer with a posted policy about it. It wouldn't surprise me if dealers in areas where cars might be difficult to recover (i.e. near international borders) have tougher policies than a local dealer in Smalltown USA particularly if they are dealing with someone they know. On consideration, perhaps the reason car dealers don't have clearly-posted check acceptance policies, as most other businesses do, is precisely so that they can decide on a case-by-case basis who they are going to accept a personal check from and in what amount.
posted by Kadin2048 at 12:11 PM on November 20, 2014 [1 favorite]

No one in my family, with the exception of my brother at age 21 who was trying to build credit, has ever financed a car. We've always just written out personal checks. I believe the dealership can call the bank to verify the money is in the account, but it's never been an issue with anything we've bought.
posted by jabes at 12:20 PM on November 20, 2014

Best answer: I used to sell new cars for a living. I sold new Nissan and Kia and straight cash buyers were rare but there was never anything special about the transactions.

It was usually a cashier's check, if we were taking a personal check, we might call the bank to verify the funds (I'm not sure banks will still do this) but it usually depended on the customer. There were a few people who wanted to pay cash but realized that their credit card limit was high enough that they could put it on there and earn ALL the miles and just pay it all off when the bill came. But we only took credit cards for deposits or down payments and I think we ended up putting a $2,000 limit on credit card transactions because of the transaction fees. There were a few people who wanted to pay cash but realized that their credit card limit was high enough that they could put it on there and earn ALL the miles and just pay it all off when the bill came.

Dealerships make money when you finance through them (well, as an intermediary for the bank that you actually finance it through) so you won't really get a better price that way. Most people finance a new car because either they can't afford it any other way or, if they were wealthy, could get lower loan rates than what they get for returns on their investments either through the banks that the dealership worked with or through the factory financing promotions. When I was selling them, you could get either 0.9% or 1.9% for 60 months on just about every Nissan for about as long as I was selling them and it usually wasn't a low rate or big rebate situation either (which usually ends up in a wash) so there wasn't any advantage to paying cash.

It's a lot more common on used cars.

My dad (who has been in the car business for over 25 years) once sold a used Dodge Viper for something like $60,000 in actual currency. He had to call their bank to make sure they could do it and they had to fill out a "Currency Transaction Report" since it involved more than $10,000 in cash but they had nearly all of the information they needed on the buyer's contract. The guy even brought the money in a briefcase. Apparently, the guy had just always wanted to buy something with a briefcase full of cash. He had to get it in 20's so it would fill up the briefcase.

The other kind of interesting thing tangentially related to your question is that people tend to over-estimate how much space cash takes up. I also used to run the cash vault at an in-store bank branch (in a grocery store). A "strap" of bills is 100 bills and is about a half an inch thick and weights 100 grams depending on how much they had been circulated. A "brick" of bills is 10 straps and is about six inches thick and weighs one kilogram (2.2Lbs). If they are $100 bills, that's $100,000 and it really doesn't take up that much space.
posted by VTX at 12:29 PM on November 20, 2014 [13 favorites]

Best answer: We wrote a check last year for my VW Beetle. It was a personal check drawn on a credit union, and we did it on a Sunday - there was no one for them to call to see if the check was good, and it was no big deal. I did put as much of the price as they would let us on a credit card for the airline miles - their limit was $3000, I think, and it was based on not wanting to pay the card fee on such a large amount.
posted by ersatzkat at 12:40 PM on November 20, 2014

I bought my Audi with a personal check. Way more than $20k. No issue.
posted by primethyme at 12:59 PM on November 20, 2014

In the UK I used a debit card to pay for my car in full. It felt very routine.
posted by plonkee at 1:02 PM on November 20, 2014 [1 favorite]

My brother was driving down to Florida one winter when his car died in Atlanta. He took a taxi to the BMW dealership and bought a new X5. They wouldn't take his credit card due to the fees, but on the basis of that and a quick credit check they took his personal check for the full amount. He hates car payments.
posted by Floydd at 1:15 PM on November 20, 2014

I did this with a certified check for a small and definitely nonluxury vehicle (toyota). As long as they know you're good for the money, seems to be fine.
posted by zdravo at 1:38 PM on November 20, 2014

Yep, in the UK it's debit cards all the way. The transaction fees are normally flat rate (22p per transaction last time I worked in a small business), and authorisation is live, so no risks, no problems.
posted by ambrosen at 1:40 PM on November 20, 2014

how would a dealership feel about coming to an agreement on a price, but then you tell them: "Well, gotta go over to the bank and get you a cashier's check, BRB!"

Sure, absolutely. This is also how a lot of used car transactions take place if you don't use an escrow service. As people have pointed out above, the car people know how to find you most of the time, so if there was something sketchy happening they would just come get it/you. And yeah banks still do that "call and see if you have the amount in your bank account" stuff occasionally.
posted by jessamyn at 2:20 PM on November 20, 2014

If you are paying for a car with good old US Government currency, you are free to do so as long as the dealer accepts the currency. After the transaction is done (and assuming that the total is at least $10,000 ($3,000 in some instances)), the dealer will fill out a Currency Transaction Form, which will inform the IRS that you have done a deal with cash. This may be used to trigger an investigation into your finances, to determine if you are hiding income or dealing drugs. Under no circumstances may the dealer disclose to you that they are filling out this form.
posted by Midnight Skulker at 2:38 PM on November 20, 2014

Best answer: That isn't quite right. The buyer knows about the CTR but you can't tell them what the threshold is. There is info on the report that you might need to ask the buyer about. If they balk at the report and use a lower amount of currency, then you file a Suspicious Activity Report (SAR) which you don't tell the buyer about. I work for a bank now so this might be the most relevant to my professional background that has ever been.

how would a dealership feel about coming to an agreement on a price, but then you tell them: "Well, gotta go over to the bank and get you a cashier's check, BRB!"

The only time you really want to customer to leave the dealership is when they're driving the car you just sold them home. Doubly so once the customer has agreed to buy the car. It gives them a chance to change their mind without their salesperson there to talk them back into the sale. So, if there is something within reason that can be done to keep them from leaving (like taking a personal check instead of a cashier's check) there is a decent chance the dealership will do it. But, it's usually not a huge deal at that point (though something the salesperson needs to feel out) and the salesperson will just be slightly nervous while they wait. It also kind of sucks because they can't really go talk to another customer while they're waiting so if you're buying a car on a Saturday or if it's a really busy weekday and need to go to the bank to get the check, don't rush or anything but don't dawdle either. There is a non-zero chance that you're preventing your salesperson from selling another car.
posted by VTX at 2:57 PM on November 20, 2014 [1 favorite]

My last two cars were bought with personal checks. Both were over $30k.

The first, I gave them a small check for like $1,000, and then came back the next day with the rest on another check.

The second, I gave them checks from two different banks, as I didn't have enough in only one account.

I am not rich. I'm just a saver who hates credit.
posted by eas98 at 3:03 PM on November 20, 2014

Likewise: I put down a $1000 deposit on my credit card and drove our minivan home, with the understanding that I'd bring in a cashier's check for the rest in 24 hours. No fuss.
posted by RedOrGreen at 3:37 PM on November 20, 2014

People with large amounts of legitimate ready cash, like movie stars, don't plunk down stacks of bills. They have it billed to their business manager who handles the payment and negotiates the deal, and the dealership delivers the car.
posted by Ideefixe at 4:49 PM on November 20, 2014

Not sure if I'm adding anything here, but the risk factor is quite different, as others have said, than you buying jewelry or something else with a very large check. The vehicle is titled, and were the check to bounce, the dealer would have lots of recourse. I think it's explicitly in the buyer's contract somewhere that if the means of payment isn't good, the dealer has right to repossess.

They're actually more nervous about you driving away WITHOUT the car than they are of you driving off WITH the car. In most states, if not all, it doesn't matter what you've signed; they can't enforce the sales contract until you drive the car off.

This isn't like you selling your own car, where your finances might collapse if you got stiffed on the transaction. Worst case, they have to get their repo guys into the act and/or be out a certain amount of value on one of their hundreds of cars they need to turn every so often. Most of the DEALERS owe so much on all their cars (called "floor planning") that turning the cars over is of paramount importance to their cash flow.

I've written checks for the full amount on a personal account, written deposit checks, etc., etc. Never bought a very expensive car with the money in my bank account, but as long as they've gotten some reasonable assurance that your financing is lined up or that you have the bank balance to cover it, off you go. I can't remember the last time I've actually had to go get a check.
posted by randomkeystrike at 7:20 PM on November 20, 2014

I used a debit card. The dealer still checked my credit.
posted by bendy at 10:41 PM on November 20, 2014

I tried to pay for a used car with a personal check and they were like Nah. So we had to sign a credit agreement (this was on a Saturday) go to the bank on Monday and get a cashiers check, go back to the dealer where they cancelled the credit agreement. It was idiotic. I wish I had heard these stories about personal checks being accepted otherwise I would have put my foot down.
posted by Potomac Avenue at 1:47 AM on November 21, 2014

When I bought my car, there was a specific limit in the contract for how much of the down payment you could put on a credit card. I checked, because I wanted to use the card for the massive airline miles, but couldn't.

I suppose higher end dealers might be more willing to take your Amex black card than a regular old Honda dealer is, but losing 2-3% of the purchase price to credit card fees is likely a specific deterrence to accepting cards for most dealers.
posted by jacquilynne at 6:13 AM on November 21, 2014

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