Making the Deal

Close your car deal by following these tips.

Once you have come to an agreement on price, don't sign anything until all the promises the salesperson and sales manager have made are in writing on the contract. If the salesperson agreed to upgrade the standard AM-FM radio to a CD player, for example, make sure that this is included in the purchase agreement. Be sure that the contract includes the car's correct VIN, or Vehicle Identification Number, which is stamped on a metal plate inside the car's windshield on the driver's side. (If you are ordering a car from the manufacturer, however, this number won't be provided until the car is delivered.) Your contract should also include a list of the car's standard equipment and any options, as well as the size of the engine. You might be surprised to find out that the six-cylinder engine the salesperson told you was standard in the car is really an extra cost option.

If you haven't obtained financing from your bank, savings and loan or credit union, you may be tempted to consider dealer financing. At one time, dealer financing was more costly than what you could obtain elsewhere, but today many manufacturers offer financing at very low interest rates to financially qualified buyers. In some cases, you may be offered the choice of a low interest loan or a cash rebate. If you have your own financing already lined up, the rebate will often be the better choice.

No matter what, don't take the car off the dealer's lot until you have completed all the paperwork and are absolutely sure you have been approved for financing. Most automobile purchase agreements contain a clause known as a bailment provision. This provision says that if you aren't approved for your loan and the purchase falls through, the dealer can charge you a daily fee and a mileage fee for the time you have the car in your possession. This fee may be as much as $100 per day and 60 cents per mile, and even more for some models. If you take the car off the lot on Friday, drive it 300 miles over the weekend and then learn on Monday afternoon that your loan application was turned down, you could end up owing $480 for what amounts to a weekend rental. While you or the dealer may be able to find another source of financing, it's bound to be more expensive than the deal you thought you had, either because you will have to pay a higher interest rate or make an additional down payment, or both.