True or False? Car Dealerships Can Run Credit Before a Test-Drive

by Center for Personal Finance editors

False: It's illegal for the dealership to check your credit report without first getting explicit permission from you. But why would a dealer want you to do this in the first place? For financing reasons of course. If they line it up for you they're hoping you won't check around for the best rates.

To avoid this situation, get a preapproved auto loan from your credit union before visiting the dealership. Credit unions often offer better rates on automobiles than other financial institutions. You also might be able to get financing from your credit union right at the dealership as well. Contact your credit union today.

January 31, 2006