Why Would A Dealer Insist On A Credit Application If I Am Paying Cash?

Illustration for article titled Why Would A Dealer Insist On A Credit Application If I Am Paying Cash?
Image: Getty (Getty Images)

As Jalopnik’s resident car-buying expert and a professional car shopper, I get emails. Lots of emails. I’ve picked a few of your questions and will try to help out. This week we are discussing a dealer’s instance on applying for a loan on a cash deal and which brands you can order from.


(It’s Memorial Day, so we’re running some of our favorite posts from the last few months while we watch Indy, eat garbage and hug/hi-five our troop friends and family. We hope you’re having a lovely holiday weekend!)

Why would it be necessary to submit an application for a cash deal?

I was working with a local Kia dealer on a Telluride order and they insisted that I submit a credit application as part of the process. I told them I was paying cash but they said that it is “store policy.” This doesn’t make any sense, if the car is paid for upfront why do they need to run that application?

The short answer is that there is no reason for a dealer to insist on a credit application if you are a cash buyer. This is especially true if you are using a wire transfer to pay for the vehicle, as that eliminates any excuse for having the “funds clear” or whatever else the dealer wants to say.

I’ve worked with hundreds of cash buyers and in almost every instance the store took the payment and that was it. In the handful of cases where the dealer requested a credit application, almost every single time it was a store that had a reputation for shady business practices. Usually, they want a loan approved as a “backup” so they can hopefully hose you in the finance office. I’m not terribly surprised that a Kia store would pull this kind of thing.

Now I will say that in some cases on ordered cars, the credit application is a prerequisite to secure the order allocation. Again, this isn’t the best business practice for dealers, but if that is what it takes to get your high-demand car there is no harm in doing the application. It will be a “hard pull” on your credit profile, but if your score is high it won’t have a big impact. Once the car arrives just refuse to sign any finance agreement and pay with cash.

Speaking of factory orders, which brands accommodate these requests?

Sometimes you get lucky and find the exact car that you want on the lot. Other times, the dealer “pulls some strings” to bring in that perfect car from another dealer. Usually though, you buy a nav package you don’t really want, or maybe you take your second favorite color since you need a car ASAP. But, sometimes! Sometime, you can just order up the exact car you want if you’re willing to wait and that’s the best!

My question (I’d get there eventually) is: Is the ability to custom order your car something that is dictated by the manufacturer? The particular dealership? Both? And where is that info available? If I’m a fussy and particular sort of car buyer (I am!), how do I know which brands or dealers I can work with?


The ability to order a car is dictated by the automaker, not the dealership. I discussed in a post from a long time ago, that just because a dealer says they can order you a car doesn’t make it so. However, a good dealer will be able to tell you honestly and accurately if placing an order is even possible and what the approximate order time would be.

Generally speaking, all of the European brands will offer ordered cars. The same is generally true for the Big Three domestic automakers. When it comes to Asian brands like Toyota, Honda, Nissan, and Hyundai, it’s more of a mixed bag. Some brands do “allocation requests” that aren’t exactly orders, while others like Subaru can place an order for exactly what you want. The caveat to orders is that you can usually only order a car that is configurable on the automaker’s website. For example, you can’t order a car with a manual transmission if that isn’t an available option for that model.


Got a car buying conundrum that you need some assistance with? Email me at tom.mcparland@jalopnik.com!

Tom is a contributing writer for Jalopnik and runs AutomatchConsulting.com. He saves people money and takes the hassle out of buying or leasing a car. (Facebook.com/AutomatchConsulting)



I recently heard that Toyota wont order you a car, only inventory.  Do you know if thats true or not?