How do you pay for a car with "cash" when you have a savings account?

In My Humble Opinion
1

I have bought two cars with cash before, but I was young and poor and I think the more expensive one was about a whole $3,000. In those cases I literally paid cash in one case and got a cashier’s check off my checking account and brought it back to the dealership in the other. More recently I had a car loan, paid off years ago. That car is a 2007, and it’s increasingly evident via more frequent repair needs that it’s about time to put it to pasture too.

Now I make more money than I used to. I could easily finance a car (my credit score hovers around 800) but I don’t want to.

Overly long, possibly unnecessary explanation: [spoiler]After three years of effort I’d saved all the money I could need for a down payment on a house last year, meeting my goal the first week of March…five days before my mom died.

I’m still in the market for a house, but finding a place is slow going now I’m looking after my dad who has severe health and moderate mobility issues that’ll only get worse too. Long story short, in the 17 months since I met my down payment goal, I’ve also saved a modest new or late model used car’s worth of cash too, and paying cash won’t change my debt/income ratio like a shiny new car payment would.

And the way my luck goes (5 days for @$%! sake) if I take on a car loan, the perfect house will magically appear on the market within a week. So, cash to buy a car. [/spoiler]

The part I’m unsure about is that now, unlike when I was young, I have my money divided between a checking account and a savings account. I keep a month’s worth of take-home pay in the checking account to pay bills/get cash and transfer everything else into the savings account. Can I get a cashier’s check off the savings account? (this has been a house buying question too, of course, but not so timely.) Or do you need to transfer money back into the checking account? I do not have a checkbook for the savings account, which is mostly why I wonder.

Also, some people have mentioned in this thread that they’ve used a personal check, is that common? And would doing so help compared to having to get to the bank on time (I mean, can they verify funds somehow in non-bank hours)? I’d like to avoid taking time off work to car shop, but the fact that my bank closes hours earlier than the dealerships do at night and on Saturday too is a complication…

Fast-ish answers would be awesome - I’d like to check out the Labor day sales. Not sure I’ll get a car immediately, but I’d like to know what I’m doing if something does strike my fancy.

Thanks for the advice and your patience with my rambling!

2

Yes. Savings accounts have a 3 check per month limit, per some regulation, though a cashier’s check is not the same.

I would assume that the dealership uses telecheck, which actually is some kind of insurance, so that they can accept personal checks. However, I suspect they would be happier with a cashier’s. Some might even give a discount for an envelope full of actual cash, ask them. If they won’t give a discount, I would use a cashier’s check because it is traceable.

Honestly I doubt the dealership sees any difference. Any form of payment that doesn’t require them to finance the vehicle is ‘cash’ for them. Even if you actually borrowed the money from the bank, it’s no longer the dealership’s problem. If the telecheck says you are a risky transaction and refuses to insure it, no doubt they could have you write a cashier’s check and then wait a week or 2 to pick up the car.

As for buying a car advice in general - you do understand that to get the most value per dollar, you should

a. Buy used. Around 6 years old is considered optimal.
b. Consider brands that have good reliability but are less popular. Mazdas, Ford sedans, that sort of thing. Everyone buying used loves Toyotas and Hondas, so they are at a significant premium.
c. Buy from a private seller. You can pay a mechanic to take a look at the car, reducing your risk. If you choose a fundamentally reliable brand and have a mechanic check it over, it’s probably going to go well, and there is not a middleman in the middle taking thousands of dollars from the deal. A private seller will get more from the transaction than they will get from selling to a dealer, and you will usually get more for less.

3

A cashier’s check is not issued “off” of a personal account. It is issued “off” the bank itself. Your account is not associated in any way with a cashier’s check.

Just go to the bank, fill out a withdrawal slip, go to a teller and say “I want to withdraw $x from my savings account and I’d like it in the form of a cashier’s check made payable to [name of person].” There may be a fee.

If you are planning on buying the car from a private party, check how they want to be paid before getting a check. Because of the many scams with fake cashier’s checks, many people will no longer accept them.

If you are going to a car dealer, the dealer can be very flexible on the form of payment they’ll accept. They may hint that they want a cashier’s check, but if you say “I was going to write a personal check, but if you don’t want it, that’s fine. That will give me time to shop around at some more car dealers on the way to the bank.” They will quickly come to an understanding with you. They really, really don’t want you to walk out the door without making a commitment.

No, there is no way way to definitely verify a personal check. During business hours you might be able to call the bank and ask “Does account number 123456 have $3000 in it?” but that does not prove that the check is real or that the account will have $3000 still in it when the check is presented.

4

I have paid for new cars at the dealership using a personal check. You can usually transfer the money from your savings to checking via your home computer. As Alley Dweller said, getting a cashiers check is also very easy.

5

No, but the account number can be presented to Telecheck, which is some firm that has vast databases. If the account is years old and previous transactions have cleared, it’s probably not a scam, and Telecheck will insure the transaction for a cut of the purchase price. So either way, the car dealership gets their money.

6

I wrote a personal check for a car a month ago and asked the dealership to hold the check 48 hours while I moved money around. Was no problem. Honestly, easier than writing a checkat the grocery store. Some of that is nice white lady privilege, but I also think that, unlike groceries, if the check bounced they would have just come and gotten the car. They knew where I lived.

7

When I’m paying cash for a vehicle, it’s always a short drama with two actors playing their parts. I know my lines and it always goes the same way.

After choosing a vehicle, I determine what I’m willing to pay for it.
I bring a cashier’s check for that amount to the dealer.
I make my offer, and the dealer balks.
As I get up to leave, I show him the cashier’s check, for the offered amount, with the dealer’s name in the “To:” line, and think him for his time.
He implores me to “wait… please sit down”.
I complete the purchase and take possession of the vehicle.

(I write a check for the license fees and taxes)

It’s worked every time I’ve tried it.

8

This is what I did for all three of my car purchases – transferred enough money to the checking account a few days ahead, then paid by personal check. In the most recent case, the dealership ran a credit check on me.

9

If you don’t like the personal check idea, I think a wire transfer could be arranged. There usually is a $10-15 fee, but it’s instant. See the auto dealer or your bank.

I bought a car a few years ago with a bank money order (or cashier’s check, don’t remember which), drawn from one of my bank accounts. It works just fine.

10

I’ve bought a car from a dealer twice with “cash”. The first time was in the US about 18 years ago: I got a cashier’s cheque (“check”) from my credit union. The second time was in Australia earlier this year: I got a cashier’s cheque from my building society (equivalent to a “savings and loan association” in the US).

11

My gf bought her current car, a one year old Subaru, with a personal check for the total amount.

Years ago my brother bought a new car that he had researched exhaustively with a paper bag full of cash. He offered $X, they countered with $X + $500. He put his bag, filled with $X on the guys desk, told them take it or he’d go to another dealership. They took it.

12

I paid for my current car (around £15k) with my chip & pin debit card. It seemed a bit surreal paying for a car the same way I’d pay for a meal at a restaurant.

13

When I bought my used car, (about $10k canadian,) they suggested I get a bank draft, which it seems is a little like a certified cheque. The bank verified that I have that money, and put a hold on it in my account until the draft was deposited.

I had a chequing account, don’t know for sure if you can do that from a savings account, but I don’t see why not offhand.

14

That would be a good way to lose all your money - if a policeman learns about it and decides to confiscate it.

Man Looses $22,000

And they don’t have to give it back! I understand that after a lot of lawyer intervention, the department offered to give him back a percentage - if he signed off any further litigation.

15

I’ve only bought one new car. I shopped around and found exactly what I wanted. I got e-quotes from the three nearest dealers. Called up the one that had the lowest quote and I asked if that would be the exact amount and they replied “yep”. I let them know I would be in to buy the next day. Had bank create cashier check for that exact amount (pulled from savings account). Went to car dealership and about 30 minutes later drove away in car. Extremely easy - no haggling, no wheeling or dealing. :slight_smile:

Next new car will go on the Visa which will then be immediately paid off. Might as well get some rewards out of it.

16

Might want to check with the dealer on that first. One of the dealers here has a huge sign on the wall that says they will not (or cannot, I can’t remember) put a car purchase on a credit card.

17

I think the OP is way overthinking this. Like was said up thread, just withdraw the money from your savings account and ask for it in the form of a cashier’s check. Easy peasy.

Or, as was also said up thread, transfer the money from savings to checking and use a personal check.

18

One issue, if you use a personal check, they will likely require a credit check, citing a bunch of Patriot Act BS, and prolong the transaction.

Buying my car 3 months ago, we went in, made the final negotiations to get the specific price, and drove a short distance to our bank for a cashier’s check. (necessitated doing so during banking hours, and a local branch.) We told them we expected paperwork to be ready when we returned, and for them to get us out of the office in less than 1/2 hour after that, if they wanted us to give good responses to the subsequent survey. Which they did.

19

Yeah, I can see them not wanting to lose whatever percentage Visa will take. My mom used a credit card a few years ago so there must be some that do but maybe all of them are now blocking cards. I won’t be buying another car for 5+ years so who knows what will be common then.

20

This thread brought to mind my first new car purchase, financed through the Bank of Dad. He went with me to the Datsun dealership (this was 1976) to see the B210 I wanted. I thought it would be advantageous to let them know up front they’d be getting a check that day, but my dad said they’d be more likely to cut us a good deal if they thought I’d be financing thru them, since they’d get a commission from that. Dunno how true that was or is.

Since then, when my husband and I have bought cars, we show up with a check from our Credit Union (or a personal check), always ready to walk away if they start playing games. It’s gotten a lot easier with so much information readily available on line. But I still hate the whole car-buying game.

And unless I was getting an old car from a private party, I’d never buy a vehicle with cash. With a check, there’s a paper trail.