How Does Somebody Use Their Money From Their Checking Or Savings Account To Buy A Car?

charged | Sep 1, 2016 | 12 posts since 2016

I'm not asking how someone manages to come up with the money or save it effectively over time. I'm asking if someone already has the money, how does the actual payment process happen?

Does somebody simply write a check for a large sum like $15k which the bank clears immediately?

What if the money is tied up in an online savings account like ALLY?

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Answers

Shorebreak | Sep 1, 2016 | 4,039 posts since 2010

If you have the available funds in your checking or money market account then just write a check to the car dealer. It clears very fast. It doesn't matter if the account is online or not.

Anon456 | Sep 1, 2016 | 249 posts since 2011

Make sure you have a checking account at ALLY in addition to savings.
Move money online or via call to Ally from savings to checking, and write the check. DONE.

Ricochet | Sep 1, 2016 | 522 posts since 2010

You dont need a checking acct . Ally gives checks for a money market acct.

Ally6770 | Sep 1, 2016 | 4,292 posts since 2010

We have in the past purchased several cars and trucks with a check. No problem write a check, get a receipt, call your auto insurance person, get a copy of the papers that the title was sent in to the state and drive the vehicle home. The last vehicle I wrote a check for was 2 years ago.

We were only able to charge one vehicle on a 5% cash card and then pay it off when getting the bill. After that one they would no longer allow it. The dealer put a $1000 limit on the card.

klink | Sep 2, 2016 | 202 posts since 2012

Last vehicle I purchased was paid for with a credit card and the debt was paid off with bill pay from my checking acct. to the card company. Total was 18K.

Ally6770 | Sep 2, 2016 | 4,292 posts since 2010

We used the credit card when our son ran a department for a major auto manufacturer's finance department in another state and we were able to use his plan and discount because he had not purchased a new car that year. At that time they could use their top discount once a year. The dealer called me at work on Sat and said my husband's vehicle was in. They closed at noon but said he would stay there for me to get there after I got out of work. He and I were the only ones there. He should not have let me charge that car at that price I learned later. My son said it actually cost the dealer to sell me the truck at that price with the fee they paid to the credit card company. This was near the end of the year and I used my son's discount for my car the following Jan. When I went in to pick it up they told me I could not charge it, but I was able to use the amount from the 5% cash back card to put toward my car. My son now works in for a large medical company. The last auto I purchased I used a credit unions car buying service where the dealers in your state bid for the vehicle you want. I kept at it until the bid for the last car I purchased was $800 cheaper in Jan for the current years model than the previous years new model in the summer of the year before (same model, same options, same color). Glad you were able to use the card. Those cash backs on credit unions are nice. I used that bid and was able to get the same bid from my local dealer when my local dealers previous bids were much higher. Using the credit unions car buying service is free and the bids come in cheaper than going to site directly. Some other places make you pay to use the service. I go for safety first, then reliability, and last gas mileage on the type of vehicle I want. Then I start the process of getting the best deal and keep at it until I feel I got the best deal. In fact the car buying service has a graph that shows you if the bid was a good, ordinary or to high of a bid for your area. This is another pretty good deal that many credit unions have for free. If you go through the credit union the bids from the same dealers come in cheaper when going through the credit union rather then going to the site directly.

me1004 | Sep 1, 2016 | 1,379 posts since 2010

You can just write a check. But you are asking if it will be cleared immediately -- I'm not sure why you're asking.

If you write a check, the seller can call your bank before closing the deal to make sure you have enough money in the account to cover the check. They also can otherwise check your credit rating to decide whether they want to take a check from you.

The ACH until now would generally take at least one overnight for the check to arrive at your bank when it opens the next morning. As of this month -- not sure the date,maybe even today -- the ACH will begin offering same-day transmission, so that might affect your decision, depending on why you wanted to know if the check would clear immediately.

I don't know whether it is legal or not for a check, but I know I in the past have had a auto dealer -- without alerting me in advance -- actually put a lien on a car I bought with a credit card until the several months time passed in which I could theoretically challenge the credit card payment. (We had a lot of screaming about that when I found out a month later!) Possibly the dealer will want to put a lien on your car until the check finally clears.

As for using your savings, I doubt any dealer is going to get mixed up in a transfer from there to his/her account. And a debit card surely will have limits on it that would be far below the rice of a car, but if not, then it should be usable similar to a credit card, but your bank definitely would process that payment same day.

charged | Sep 1, 2016 | 12 posts since 2016

I'm asking because I never wrote a check for over a thousand dollars before so I would think that considering the high amount of money needed maybe it would be a bit more complicated with more security measures, or perhaps take longer for the bank to clear. I guess not though based on everyone's answers, good to know.

me1004 | Sep 2, 2016 | 1,379 posts since 2010

Most people just write a check. No one is going to walk around with maybe $20,000+ of cash in their pocket to buy a car -- except criminals looking to launder money. In reality, you would have a LOT more trouble paying a large sum in cash than via a check, the dealer would be very hesitant to take that kind of cash, they don't even want that kind of cash in the till, it would only be subject to a robbery.

One thing you might want to do in advance if the amount would be out of whack with your normal spending is to notify your bank that you will be doing that, with some vague idea of the amount, it does not have to be exact. They would note that on your record at the bank -- ask them to do so -- and when the check comes in, they will see the note so have no concerns about it. This is a common thing to do with banks; with credit cards too. I think this might be the info you needed, that sparked your question.

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