# Do you need a Brick and Mortar Bank to buy a used car?



## eulogy (Oct 29, 2011)

I'm not thinking of buying one, but the thought of closing my checking account at TD has popped up. I just have my minimum in there to avoid the monthly fee and just don't use it. I'm pretty hands off when it comes to banks and 99.9% of my transactions can be dealt with online banking and/or ATM machine.

But I'm still a little apprehensive about it. For a really really cheap car, it doesn't seem like too big of an issue to have cash. But if you try to follow the philosophy of buying 2-3 year old cars with low mileage, you're going to need a decent sum of cash. Not the kind that I would feel comfortable holding. I know you can order certified checks and such through the internet banks prior to purchase, but with negotiating the price it just seems very difficult to get the exact amount.

Any thoughts?


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## AltaRed (Jun 8, 2009)

I imagine it depends from whom you buy. If you are buying a 'substantial' vehicle from an auto dealer, they will likely insist on a bank draft and the business card of the bank employee that issued it so that they can verify the bank draft as legit. Bank drafts and certified cheques can be counterfeit. If I was selling a vehicle, I would insist on the same thing as an auto dealer OR go to the buyer's issuing branch to make sure it was legit before I released the auto.

I would never be without a brick and mortar bank chequing account even if I hardly ever used it, or ever went into the brick and morter establishment.


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## fatcat (Nov 11, 2009)

car buying is one of the last bastions of reasons why people need large amounts of cash


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## m3s (Apr 3, 2010)

I've bought and sold cars and houses with online banking. No need for brick and mortar unless you enjoy standing in line behind people who smell like old shoes and move at a glacial pace.

Always negotiate as if you are paying in cash. When the price is set and it's time to pay, they can wait for the draft or you can offer to take their ripoff financing so long as you get X discount, no admin fees, and ability to pay it off in full (online at your convenience) Often, the financing is handled by someone else and they want the deal done asap so they will agree to your terms. You have to be in the driver's seat here.

If you order a draft online and they try to tack on more fees afterwards (as they always do) all the more reason not to pay it! I wouldn't pay those sucker fees regardless. The good used cars are usually sold privately anyways.


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## AltaRed (Jun 8, 2009)

We're not talking new cars or financing....so where did those comments come from? The OP was talking about cash deals on a used car, whether, I assume bought privately or from a new/used car dealer. As a seller, I would never accept a draft from an 'online' bank. Heck, I won't accept a certified cheque or a bank draft period without going to the buyer's issuing branch to make sure it was good.


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## sags (May 15, 2010)

Cash is still king when paying for things.

I have yet to have anyone refuse to take cash and insist on a cheque or money order.


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## eulogy (Oct 29, 2011)

Thanks for the opinions everyone. I'm still not convinced I can do it with an internet bank. Like if I was buying a used car, 2 years old, 50k kms, and it costs $10,000... It's a lot of money to have on my person. That's fear one. The second fear would be on the sellers side is with counterfeit money. I suppose you could pay ten grand in $20 bills, but most likely it'll be hundreds and fifties. I guess you'd even need a brick and mortar bank just to do the transaction in just to have the bank verify it isn't counterfeit. 

But maybe I'm being overly paranoid.


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## m3s (Apr 3, 2010)

Well you get a bank draft mailed out. Our banking system is really archaic. In Europe there would be no confusion or concern at all. IBAN number and electronic transfer from any smartphone or ATM, completely secure and free. EMT's in Canada are not safe at all.


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## eulogy (Oct 29, 2011)

m3s said:


> Well you get a bank draft mailed out. Our banking system is really archaic. In Europe there would be no confusion or concern at all. IBAN number and electronic transfer from any smartphone or ATM, completely secure and free. EMT's in Canada are not safe at all.


if I'm buying from a private sale, I'll negotiate the price, both parties agree, and then I have to wait a few days to get a bank draft?


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## m3s (Apr 3, 2010)

Don't need a B&M chequing account to get cash from a bank. You could use a LOC or car loan and then pay it off online with the internet chequing account. If you instead financed through a dealer you could negotiate a discount because they get an immediate bonus for that. So long as you pay it off soon after, and don't pay the trivial admin fees



eulogy said:


> I'm not thinking of buying one, but the thought of closing my checking account at TD has popped up. I just have my minimum in there to avoid the monthly fee and just don't use it. I'm pretty hands off when it comes to banks and 99.9% of my transactions can be dealt with online banking and/or ATM machine.


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## Butters (Apr 20, 2012)

You could wait a few days. 
Or
Get a bank draft for $5000 bucks. Bring $500 cash. Write a cheque for the remainder $250 or whatever.
Or
Go into his bank with him until the teller clears the cheque them trade the keys at the bank. 

Just don't bring all your money and meet the guy alone on a dirt road outside of the city. 



I used to write my mom cheques, she would go to the bank, and cash them for me. Then give me the $5000 I needed. I was with PC financial under 18 with a $500 limit. Would have took me 10 days to take it out from ATM. 

However im sure you could also call PC and get your ATM limit raised. 

Also if you insist at a bank on talking out $5000 in cash the likelihood is they will give you a bank draft and waive the fee. 

Banks are also convenient for US dollar exchange if you're going on trips and a few other perks.


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## leslie (May 25, 2009)

Not mentioned yet is cash's lack of a paper trail.


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## marina628 (Dec 14, 2010)

We just traded our 2010 SUV for a 2014 and paid $11,300 in cash difference.We have a $3000 a day cash w/d limit on our TD cards so we just took the cash out and went to the dealership 3-4 days later.I was surprise though that the Business manager asked us where the funds came from and he asked us for either our TD bank acct number or the bank card(s).We gave them our bank acct number and he said it is because of questions their bank will ask on cash deposits over 10k which we all have heard about but not always experience.
We sold our boat in July for $xx,xxx and the buyer met my husband at his Bank and the teller transferred the funds in person from buyers account to ours and then my husband gave him all the paperwork.I think that is the safest thing to do when handling private sales.


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## wendi1 (Oct 2, 2013)

I have bought several cars through my PCF chequing account - I ordered a certified cheque, which I picked up at a CIBC branch a couple of days later.

No problem.


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## Spudd (Oct 11, 2011)

You could also email the person the money using the Interac email service offered by both B&M and internet banks. Just make sure you're holding the keys to the car and the paperwork before you initiate the email!


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## m3s (Apr 3, 2010)

Spudd said:


> You could also email the person the money using the Interac email service offered by both B&M and internet banks. Just make sure you're holding the keys to the car and the paperwork before you initiate the email!


I use EMT for friends and family but if you google it is not safe for anyone else. Why in this day and age you cannot safely transfer someone money online for free like the rest of the world is beyond me, but I do enjoy the dividends.


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## Rusty O'Toole (Feb 1, 2012)

It doesn't make sense to buy a used car and finance it these days. Instead of buying a 2 or 3 year old car, buy a new one for only a few thousand more, and get 0% financing, rebate, or other deal from the dealer you cannot get at a bank. I know people who went shopping for a used car and bought a new one because it was better and cheaper.


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## m3s (Apr 3, 2010)

Rusty O'Toole said:


> It doesn't make sense to buy a used car and finance it these days.


The car dealers are ingenious.. 0% just means they've baked the profit into the price or they would all be bankrupt! People without cash just have no upper hand in the matter.. You can't compare to the advertised price of used cars either.

I just bought a 2.5 year old car with 30k odo for less than 2/3 the new invoice price. When you look at all the fees, taxes, add on and accessories I probably paid half! (3M protection, rust proofing, tint, extended warranty, block heater, floor mats, wheel locks, anti theft marking, plus all those random new car fees etc) I had to look around to find this deal but it wasn't all that difficult (probably thanks to this 0% mentality) It cost $250 for a real inspection including compression test for piece of mind.

I've helped friends buy used cars and you can negotiate with the financing (they get a bonus from the bank, you can get a discount and then just pay it off as fast as you want..) If you want a new car fine but don't tell yourself it's cheaper!


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## chantl01 (Mar 17, 2011)

I've also discovered the benefit of negotiating with the financing when buying a used car. Bought one this summer and by agreeing to take on a bank loan (for which the dealership covered both the admin fee and the first month's interest) the dealer was willing to drop the price of the vehicle quite a bit. They must get a good bonus from the bank. Once that first month was over, went to the bank and paid off the loan. No cost to me.


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