Have you ever heard of this when buying a used car

[Pea-n-Me]

Have you ever heard of a car dealership having a policy of NOT taking a deposit on a used car, even over the few days when a good faith buyer is getting all their necessary "pieces" put in place?

I've bought two used cars recently, both at different dealerships. The first one was happy to take a deposit and work with me for a couple of days while things fell into place.

The second one refused a deposit because they expected the entire purchase to happen in just one day, saying they had everything right there to make it happen. [Read: they want you to use their financing and services to expedite the purchase.] If you do things on your own and it takes a few days, they will still sell the car to someone else who walks in and can purchase that day, despite knowing you're in the middle of purchasing.

I had never encountered the latter before, and thought it would make an interesting discussion.

One thing I have noticed, and I've heard it from several dealerships, is how internet sales have changed car buying. Not sure that has anything to do with the question, but I suppose it could factor in.

 

[Klayfish]

Yes, it happens more often than not. Bought tons of cars, they usually don't want a deposit. As you said, internet sales have changed a lot of things. Dealers typically would rather not work with a deposit. That can leave them in a bad spot if someone else comes along with their pieces in place and wants to drive away with the car today. Dealer then has to turn them away and hope that the deposit person comes through.

 

[Pea-n-Me]

Yes, it happens more often than not. Bought tons of cars, they usually don't want a deposit. As you said, internet sales have changed a lot of things. Dealers typically would rather not work with a deposit. That can leave them in a bad spot if someone else comes along with their pieces in place and wants to drive away with the car today. Dealer then has to turn them away and hope that the deposit person comes through.

Yes. I imagine this isn't going to sit well with a lot of buyers, if this becomes a trend. It really didn't sit well with me, either, since I've never encountered it myself before, and I've bought a lot of cars, too. With most, a deposit wasn't even expected, though no way was the car going to be sold, either. It would feel pretty awful for a buyer who is going through the motions in good faith only to have the car go to someone else while they're getting their insurance binder or picking up the check from the bank - things that may take a day or two if you're buying at night or the bank is far away, someone gets unexpectedly sick or something, etc.

 

[smiths02]

We've never gone car shopping without the pieces in place already. Granted, we've only had to go car shopping twice. Once was used from a dealership and once was new. Both times, we secured outside financing, but both times it was advantageous to take the financing offered by the dealership on the spot.

 

[Pea-n-Me]

One interesting thing I encountered was a car dealership an hour and a half away who was willing to bring a car to me to see it, which I thought was great. (But didn't happen to be either of these dealerships.) We never actually went through with it, either, but they were willing to do it, saying it keeps them competitive.

 

[Pea-n-Me]

We've never gone car shopping without the pieces in place already. Granted, we've only had to go car shopping twice. Once was used from a dealership and once was new. Both times, we secured outside financing, but both times it was advantageous to take the financing offered by the dealership on the spot.

My financing was all ready, also. But still, there were some details that had to be taken care of and required a little time.

 

[smiths02]

Yes. I imagine this isn't going to sit well with a lot of buyers, if this becomes a trend. It really didn't sit well with me, either, since I've never encountered it myself before, and I've bought a lot of cars, too. With most, a deposit wasn't even expected, though no way was the car going to be sold, either. It would feel pretty awful for a buyer who is going through the motions in good faith only to have the car go to someone else while they're getting their insurance binder or picking up the check from the bank - things that may take a day or two if you're buying at night or the bank is far away, someone gets unexpectedly sick or something, etc.

Why is there this need for days for insurance binders or picking up checks from the bank? Everything is so digital, that I'm really not understanding why this cannot happen pretty much instantaneously. Even if we had chosen financing from our credit union, it would have been able to be done right then as we had gone through the approval process prior to looking at cars.

 

[Pea-n-Me]

Why is there this need for days for insurance binders or picking up checks from the bank? Everything is so digital, that I'm really not understanding why this cannot happen pretty much instantaneously. Even if we had chosen financing from our credit union, it would have been able to be done right then as we had gone through the approval process prior to looking at cars.

Not everything can be done in one day, for all people, for various reasons. In our case, It happened to be late in the day by the time we came to all terms of purchase, and the closest branch of our CU was an hour away in heavy traffic and would've been closed by the time we got there. The bank said we'd need to come pick up a check after they received the P&S and insurance binder. Normally we use AAA and the same thing has to happen. It does sometimes work out to use the dealership's financing, but people have their reasons for using their own resources, as well. People may not realize how many steps there are to purchase when everything is done in-house.

 

[Klayfish]

Yes. I imagine this isn't going to sit well with a lot of buyers, if this becomes a trend. It really didn't sit well with me, either, since I've never encountered it myself before, and I've bought a lot of cars, too. With most, a deposit wasn't even expected, though no way was the car going to be sold, either. It would feel pretty awful for a buyer who is going through the motions in good faith only to have the car go to someone else while they're getting their insurance binder or picking up the check from the bank - things that may take a day or two if you're buying at night or the bank is far away, someone gets unexpectedly sick or something, etc.

Yes, definitely two sides to that story for sure. I wouldn't like it if the car got sold out from under me as a buyer. I've had it happen several times, but those were cash transactions. When buying from a dealer, while I fully agree that I wouldn't be happy if it happened, from their perspective it's hard to turn down an instant sale over the "promise" (which doesn't always pan out) of a future sale. As a PP mentioned, in today's digital world there typically aren't loose ends that need to be tied up, such as insurance binders...those can be done instantly, often directly by the consumer or dealer. So I can see the dealers' perspective, most customers today wouldn't have the time obstacles that existed 20 years ago.

 

[Skippy918]

The only time I placed deposits on vehicles was when the car we wanted wasn’t on the lot, was high demand and needed to be reserved while still at the factory. The deposit went towards the purchase price.

 

[Pea-n-Me]

Yes, definitely two sides to that story for sure. I wouldn't like it if the car got sold out from under me as a buyer. I've had it happen several times, but those were cash transactions. When buying from a dealer, while I fully agree that I wouldn't be happy if it happened, from their perspective it's hard to turn down an instant sale over the "promise" (which doesn't always pan out) of a future sale. As a PP mentioned, in today's digital world there typically aren't loose ends that need to be tied up, such as insurance binders...those can be done instantly, often directly by the consumer or dealer. So I can see the dealers' perspective, most customers today wouldn't have the time obstacles that existed 20 years ago.

Yeah. I know you work in insurance. But our insurance company, who I won't name, is notorious for taking a long time to get the binder over to the dealership, requiring multiple calls and sometimes a couple of days, which happened to us both times recently. It was definitely coming, but slowly.

 

[Klayfish]

Yeah. I know you work in insurance. But our insurance company, who I won't name, is notorious for taking a long time to get the binder over to the dealership, requiring multiple calls and sometimes a couple of days, which happened to us both times recently. It was definitely coming, but slowly.

Well, at least I can't take blame for that one...I'm a claims guy although it's usually more like

 

[clutter]

Yes. I imagine this isn't going to sit well with a lot of buyers, if this becomes a trend. It really didn't sit well with me, either, since I've never encountered it myself before, and I've bought a lot of cars, too. With most, a deposit wasn't even expected, though no way was the car going to be sold, either. It would feel pretty awful for a buyer who is going through the motions in good faith only to have the car go to someone else while they're getting their insurance binder or picking up the check from the bank - things that may take a day or two if you're buying at night or the bank is far away, someone gets unexpectedly sick or something, etc.

I'm not sure I understand the problem. I just bought a used car this weekend, and no, they were not going to allow me to put a deposit on it.

They did, however, allow me to sign the contract, the (small) loan, and take the car. They confirmed insurance on the car I traded in (which automatically transfers to the new car until I call and update the policy), or if there was no trade, I could have called my 24-hour customer service and they would have insured it on the spot. I then returned the next day with a checkbook from the bank I preferred to use, and had my co-owner/borrower sign the documents.

 

[wenrob]

Are you having to get a Cashiers Check or something? We get pre approved and then just call our insurance and tell them we bought a vehicle. They fax/email a new card or we go get it (in the new vehicle) depending on the time of day.

As far as the Internet we secured a price on the vehicle we wanted online before we went in.

 

[LongLiveRafiki]

For the last 2 vehicles I bought, I called our bank from the dealership, gave them the VIN and other info and they approved the loan over the phone. Then they sent the check electronically to the dealership. There was zero checking of insurance documents and we updated our insurance after we got home. Once negotiations were done, the whole process took maybe an hour or two. We do bank with a Credit Union that doesn't have local branches so there'd be no way to physically go there to handle anything. This is the first time I've heard the term "Insurance Binder" and still don't really even know what it is.

 

[luvsJack]

Last two I bought, I didn't put a deposit, they just let me take the car home. First time, we were financing and using our own bank. I don't remember why it took an extra day but I went back in a day or two and completed the sale. The second time we were paying cash and did the same thing. That time I know it was the weekend and I drove back Monday with the check.

 

[Cindy's Mom]

Pre approval from my CU - dealer calls in VIN to CU - CU wires money over and emails confirmation.

 

[scrapquitler]

I'm not understanding the need for for the buyer to have time to get documents together? When we've purchased, the dealership had the approval for the financing within 30 minutes of us applying (with a local credit union that the dealership uses), I called the insurance company and they faxed our proof of coverage within that same 30 minutes. The only reason we didn't finalize the deal immediately either time was because the dealership needed time for them to get all their paperwork filled out.

I guess that I just don't see why you wouldn't just wait to buy a car until you already have all your ducks in a row? The dealership isn't going to want to sit around and wait for you and hold off selling a car if someone else comes along ready to close the deal NOW.

 

[DisneyHardin]

Last two I bought, I didn't put a deposit, they just let me take the car home. First time, we were financing and using our own bank. I don't remember why it took an extra day but I went back in a day or two and completed the sale. The second time we were paying cash and did the same thing. That time I know it was the weekend and I drove back Monday with the check.

This is exactly how it happened when we financed through our bank. I took the car even though it wasn't truly "paid for" yet. The bank called me a couple days later that they had the check and the manager even offered to take it to the dealership for me.

 

[Pea-n-Me]

I wonder if the laws in my state are different