A car-buying expert shared a piece of advice he wants everyone to remember: Never let the dealership run your credit before a key point in the process.
In a video that has since garnered over 402,800 views, TikTok creator Billy (@billythecarkid) laid out several reasons why those in the market should be mindful of credit when purchasing a new vehicle.
When is it advisable to let a car dealership run your credit?
In Billy’s professional opinion, not until you’ve agreed on the full terms of the deal.
“Never ever, ever run your credit until you have negotiated the entire deal with the dealership,” Billy begins. “Once you completely agree on the numbers, then you can move to the next step of running your credit and financing that amount that you agreed on.”
According to Billy, running your credit at the right moment can protect you from unnecessary headaches. It not only locks in the price you’ve agreed on, but it also stops the dealership from playing games with the numbers.
“When you finance it, it kind of solidifies that price, and now the dealership can’t play with that number because you ran your credit for that amount,” he explains.
Billy highlights the importance of maintaining leverage during the negotiation process.
“You’re in a position of power not running your credit with the dealership until you’ve negotiated everything just the way you like it,” he says.
Once you do run your credit, he adds, it signals to the dealership that you’re serious about making a purchase—something that can work to your advantage.
What happens if you run your credit prematurely?
But if you let the dealership run your credit too early, Billy warns, you could find yourself in a difficult position.
“If you do see something in there you don’t like and you say something, you’ve now already ran your credit, and you’re gonna be nervous that … ‘If I get out of here, I go to another dealership, go through this whole rigmarole again … now I’m pulling my credit twice,’” he explains. “’I’m just going to buy it.’”
Billy says this is a tactic dealerships count on. “They absolutely know that this is what’s going to happen and that chances are good I’ll just take the deal and there will be no negotiating,” he says.
Another key point Billy touches on is how dealerships can manipulate monthly payments, especially after running your credit.
“The salesman is gonna want to have you fixated on the payment because that can be manipulated by the finance guy in the way of term and rate,” he explains. While these elements can change, he says, “they can’t really change the out-the-door price without discounting.”
Ultimately, Billy advises buyers to focus on securing a great price first.
“As long as you have a great price that you’re happy with, the next step after that is to finance and get the best interest rate,” he says. “That’s a whole separate battle for a whole separate video.”
Do other experts agree?
Car and Driver echoed Billy’s opinion in an article about dealership don’ts. According to the car site, since credit checks could potentially negatively impact a credit score, it’s not advisable to OK a dealership to run it if you’re not sure you want to buy yet.
“If you are going to finance your new car with a loan, the dealer will have to run a credit check eventually, but don’t agree to this before you are well on your way to completing a deal,” the site writes.
@billythecarkid The dealership does not need to run your credit to give you a total price. The only reason they’re running your credit is to determine the interest rate, term, and the monthly payment. While all of that is important, it should come after you’ve agreed on the final price. #carbuying #carbuyingsecrets #negotiation #carbuyingadvice #dealership #credit #preapproved #car #firsttimebuyer #credit ♬ The Champion – Lux-Inspira
Viewers shared additional advice
In the comments section, viewers had additional advice for those in the market to buy a car. Others had more questions.
“Rule #1: don’t let the dealership run your credit,” suggested one viewer. “Get a loan for the amount through a credit union.”
“I freeze my credit haha,” shared another.
“How can they give you a monthly payment without knowing the interest rate you’ll be approved for if they don’t run your credit?” asked a third.
Billy responded, writing, “Once you agree on the price, then you can use the financing and find out what the monthly payment will be.”
The Daily Dot has reached out to Billy via TikTok and Instagram direct message.
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The post ‘You’re in a position of power’: Expert says don’t let the dealership run your credit until this point of the negotiation appeared first on The Daily Dot.
