Do car dealerships look at your bank account? Perhaps, a friend mentioned it to you, or you have had a firsthand experience. This article explains whether a dealership will look into your bank account or not.
A typical dealership wants to look at your bank account. If the dealership you financing your car with asks for your bank statement, issue it to them. The dealership needs your bank statement to know if you can repay the loan.
A dealership will not have direct access to your bank account. Your bank statement or any other bank-related paperwork is required so that they can verify income or your cash on hand.
Suppose you are issuing your bank statement to the dealership; you can do so without revealing lots of your financial and personal information.
Do Car Dealerships Look at Your Bank Account?
A car dealership will not directly look at your bank account. They cannot tell exactly what goes on or will occur in your bank account. However, providing them with a financial document like your bank statement hints about your finances.
Dealerships do not always rely on your banking document such as a bank statement to approve your auto loan. Besides, it is not the dealership that is requesting your bank account but the lender.
Nevertheless, the dealership can see what you give to the lender through them. They use the information to verify your income to determine whether you are a credit risk or not. It is the amount of money in your bank account that hints at this.
Also, if a dealership knows that your credit score is excellent, they may not even require your bank statement. Thus, you do not have to present your bank statement unless the dealership asks for it with no other alternative. If your credit is bad or you have no job, see this guide for those who want an auto loan with no job and bad credit.
If you do not want the dealership to know about your finances, you can request other options.
Note that overdrafts do not directly affect your auto loan approval. Nonetheless, they affect your chances in a way.
Is it Normal for a Car Dealership to Ask for Bank Statements?
It is normal for a car dealership to ask for bank statements. You can choose not to issue your bank statement if you have your fears, you also have to request other options.
Your bank statement, like other financial documents, helps the dealership to verify your income.
Suppose you own are a freelancer or own a business. Perhaps, you will have no pay stubs, so the dealership requests your bank statement as an alternative.
The dealership requesting your bank statement is a standard procedure but you can refuse it if you have your reasons. You only have to worry if there is a salesperson you do not want to see your bank details. But then, not many salespersons are interested in your bank statement, they are only after the commission.
Apart from the bank statement, the dealership requests other documents needed for the lender to approve your auto loan.
As mentioned earlier, this is perfectly okay. Knowing the requirements helps to simplify your car buying process.
What Do Car Dealerships Look for on Bank Statements?
What the dealership looks for on a bank statement is to verify your income or cash-on-hand. You are also able to submit your bank statement without so much of your financial information.
The information the dealer is interested in includes your name, bank name, bank account number, and account balance. It is not necessary to give the dealership information about your spending habit.
You can keep certain information from the dealer. Inform your bank to draft some kind of summary document to present to the dealer. It should include vital information relating to your bank balance since the dealership needs it to know if you can handle the debt.
Is Giving Bank Statement to Dealerships Safe?
It is safe to give your bank statement to a dealership, they require it to ascertain your income. However, if you are too bothered, you can do well to know who will keep the copy of it, and how they will dispose of it.
Typically, a dealership working with an external lender will fax a copy of your bank statement for verification. Your original bank statement also goes to the auto lender after you complete the paperwork.
A dealership will not keep your credit application, driver’s license, or bank statement after you buy the car.
You can hide your debit information using a marker if you have a full statement. Alternatively, get your bank to write you a letter stating the relevant information the dealership needs for the lender. Ensure to obtain the needed information from the dealership so your bank knows what to fill out.
What You Can Do to Keep the Dealership from Looking at Your Bank
If you do not want the dealership to look at your bank, apply for your car financing by yourself. You can finance your car through your bank. The bank can easily verify your income, this might include checking the amount of money you deposit monthly or your spending habits.
Your debt-to-income ratio may not be okay, and so a dealer requests your proof of income for verification. The debt-to-income ratio is the amount of monthly debt you pay when compared to the amount of money you claim you are making.
You could always finance your car with other institutions, financing with a dealership should be your final resort, or just avoid them, according to the Fool.
The dealership will always want to look at your bank account if you are financing a car. It helps to verify your income but could also make you feel insecure.
Seek other alternatives, including asking the dealer for bank documents you can submit that does not reveal so much about you. As suggested earlier, consider getting your bank to create a document comprising the information required by the lender.
Meanwhile, if you are unable to complete your loan payment, you can refinance it without a penalty.