Buying a car? Buying a suv? Buying a van? Buying a truck? Just test driving a new vehicle you are admiring? Why does a car dealership have to photocopy my drivers license before I test drive a vehicle?

A lot of car dealerships will photocopy your drivers license when you test drive a vehicle.  They will say their insurance requires it.  It is for the salespersons safety in case you rob them, steal the car, etc.  

Things you may want to know…

Some dealers copy your license to run unauthorized credit checks on you during your test drive.  This is still a top complaint in both Canada and the U.S.  You ask “how could they run a credit check on me; I didn’t sign anything to give them permission.”   Here lies the fatal flaw with the credit bureau itself. The credit bureau assumes when the car dealership calls for a credit check with your personal information that you have actually signed the paper giving them permission to do so. 

There are couple bad factors at play when a car dealership takes the liberty of running an unauthorized credit check on you.  Firstly, they know your credit score before you would even start negotiations for the vehicle.  This gives them the upper hand in the price negotiation process because they already know what you can afford.  You can get less of a discount, less for your trade in, etc. etc., all because of an unauthorized credit check.

The next bad factor. You can’t decide what vehicle you want to buy, so you test drive a lot of cars at a lot of different dealerships.  If a lot of those dealerships run unauthorized credit checks on you, this can lower your credit score and affect your ability to obtain other loans.

What you can do…

Make your own copies of your drivers license to hand to the dealer and write on the copy, “Dealer may not run a credit check on you”  Remind them of the fines associated with unauthorized credit checks.  Both Canada and the U.S. have laws to protect consumers from unauthorized credit checks.

Remember…

Not every car dealership runs unauthorized credit checks on you, but it is very hard to tell who does and doesn’t unless you look at your credit report after test driving cars.

It doesn’t hurt to check your credit score every few years and see who may of been poking around in it. It doesn’t matter how many times you personally check your own credit, it has no affect on your rating. 

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19 Comments (+add yours?)

  1. Trackback: Credit Crunch » Buying a car? Buying a suv? Buying a van? Buying a truck? Just test driving a new vehicle you are admiring? Why does a car dealership have to photocopy my drivers license before I test drive a vehicle?
  2. coconews
    May 13, 2008 @ 05:57:54

    This topic has been in the news on and off for years and years. Unless the credit bureaus tighten up their regulations and ask to see a signed copy of you authorizing a credit check, this problem will continue to exist in the future.

    Even if you pay cash for a vehicle you still can run into problems, here is an example:

    http://www.ripoffreport.com/reports/0/164/RipOff0164606.htm

    What do you think of car dealerships running unauthorized credit checks on you while your out for a test drive? Is it fair for them to know what you can afford before you even start negotiations?

    If you had an experience with a car dealership doing unauthorized credit checks on you, please help others out by telling us your story in the comments section below.

  3. Peter Quinn
    May 13, 2008 @ 06:00:04

    Hi. I am a long time reader. I wanted to say that I like your blog and the layout.

    Peter Quinn

  4. coconews
    May 13, 2008 @ 06:19:09

    Once again, the comment above my first comment is another blog using my thread on their blog.

  5. Annon
    May 13, 2008 @ 11:35:49

    Yeah, can’t seem to stop those from taking advantage of your work. Sorry to hear the pain that does not go away.

    Speaking of SUV, I found today’s five things quite interesting. Here is a snip of it


    5. Modular Housing

    There are several themes at play in today’s Five Things that we believe could potentially converge into a singular, overarching housing solution: Foreclosures and Economic Hardship, High Gasoline Prices, Diminishing SUV Demand, Self-Storage Units, Shipping Container Shortages, Emergency Modular Housing Units.

    The answer? Stackable Modular Housing Units Built from Used SUV’s. I believe that one day in the not-so-distant future, the unwanted steel carcasses of four-wheel drive sport utility vehicles will be converted into stackable, modular low-income housing units. Think about it. They have nice seats, power windows, built in radio/cd players. Some things just make too much sense.”

    http://www.minyanville.com/articles/print.php?a=17098

  6. Annon
    May 13, 2008 @ 11:38:03

    Coco, if you click on the link from another blog, it links right back to yours.

  7. paulb
    May 13, 2008 @ 12:42:32

    Killer post! I did not know this and I just purchased a new vehicle. I wish I knew this 1 month ago!!

  8. phil
    May 13, 2008 @ 17:44:07

    Yes this story has been featured on CBC. There even was a repeated broadcast of the original story last night. Too bad that you don’t give credit.

  9. Bothered
    May 13, 2008 @ 17:53:07

    Hi Coco,

    You seem to know a lot about financial matters.

    Help!

    A close family member managed to become a “supplementary card holder” on my Amex card without my knowledge. A recent bill I received was over $8000.00

    I NEVER gave my permission for this. How could security be so lax? Am I liable for this?

    I have contacted Amex in their Fraud Dept. but I am getting the runaround.

    Suggestions?

  10. coconews
    May 13, 2008 @ 19:02:39

    Phil,

    Reporters usually don’t give other reporters credit for story ideas. When you watch the evening news, you will see many versions of the same news story on different channels.

    Although, stories are similar in nature they are not clones and both contain totally different information from each other.

    I’m actually old enough to have heard different versions of this story on other television stations years ago. This story has been recycled over and over again. I just did my own version of it.

    Shall I dig up some archives?

  11. coconews
    May 13, 2008 @ 19:38:13

    Bothered,

    Have you canceled both credit cards? You have to show them you are serious.

    I also find the words “shall I get my lawyer to contact you” or “may I speak directly to your supervisor” get you places.

  12. phil
    May 13, 2008 @ 19:43:08

    The “archives” to “dig up” are from last evening’s on CBC broadcast.

  13. coconews
    May 13, 2008 @ 19:44:22

    Annon,

    Yes, that is why I mentioned it. Some people may see the comment and not know what it is.

  14. coconews
    May 13, 2008 @ 19:45:36

    Phil,

    You are accusing me of copying CBC word for word? I don’t think so.

    Sounds like you wish to stir up trouble.

  15. Bothered
    May 13, 2008 @ 20:43:46

    Yes, both cards were cancelled immediately. I also threatened to take them to small claims court. This whole affair has caused me a lot of distress.

    Their “Ombudsman” is looking into it, so I guess I should just be a little more patient.

    After all, that IS one of my sayings, “Be patient, or be a patient”.

  16. coconews
    May 13, 2008 @ 21:40:37

    Bothered,

    I’m starting up a sister blog to this one called:

    Things other people want you to know

    http://thingsotherpeoplewantyoutoknow.wordpress.com/

    I’m going to post a thread on this subject. We will see what others have to say on this subject because you are not the only one out there.

  17. Bill
    May 14, 2008 @ 02:25:27

    Coco,

    Any time you wish to do your own version of any news story that is fine with me. The guy who paid cash and still had an unauthorized credit check done on him in your first comment was great. You certainly did your research and covered different areas of this story that MSM did not. Bravo!

  18. MJ
    May 18, 2008 @ 10:08:43

    Thank you for the heads-ups, Coco.

    We will be looking for a vehicle this week to replace my old beater. This is excellent info to have *before* we start shopping around.

    Ignore the complainer. I wouldn’t have seen the story on CBC and am grateful to get the info. Thanks again.

  19. coconews
    May 18, 2008 @ 19:33:04

    MJ,

    Your welcome. Happy car shopping!

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