Avoiding the Rush to Sign--Take Your Time at the Dealership
"Always get preapproved at a credit union before you shop dealership financing," suggests Remar Sutton, an Atlanta-based auto consultant and author of the book "Don't Get Taken Every Time: The Ultimate Guide to Buying or Leasing a Car in the Showroom or on the Internet." "Car dealerships' entire environment is based on always finding a place to make more money on the consumer. Which means that everything becomes negotiable at the car dealership. If consumers don't know how to negotiate, they can be hurt."
Buying a new car requires you to take your time and do your homework before visiting a dealership. Rushing through a car deal invites a dealer to potentially take advantage of you.
Before you sign or agree to anything, ask the following questions:
- What is the total price of the vehicle?
"The most important thing on a purchase order is what the end price of a vehicle is going to be," says Dianne Craft, Marketing Analyst at American Airlines Federal Credit Union in Fort Worth, Texas. The end price, according to Craft, is "minus the trade, down payment, and all of the fees that might be on there. You have to be sure to validate all the charges that are on a purchase order because sometimes, even though it's on a preprinted form, that doesn't mean it's a valid fee."
- Does the dealer require an arbitration agreement in order to buy a car from that dealership?
"Arbitration agreements are bad for the consumer because they take away the consumer's rights for any legal redress if they have any problems with that dealership," according to Sutton. "Arbitration agreements are being forced on many consumers because [clauses are] hidden in contracts or they're presented at the very last minute, before a person signs the paperwork to take delivery on a car. Do not buy from a dealership that requires arbitration agreements," adds Sutton.
- What will the dealership do with your personal information?
According to Sutton, "Many dealerships are asking consumers to sign an acknowledgement that the dealership has a right to sell personal information about that consumer to anyone." If a dealership asks you to sign a statement acknowledging they can sell your private information, Sutton recommends not signing it.
Some other things a dealer contract should spell out, from the Web site auto.consumerguide.com:
- What's your down payment or how much will you have to pay immediately out of pocket, either in cash or combined with a trade-in or rebate?
- What's your trade-in value? "Make sure you have shopped the trade so that you know what its value is. Don't just take the dealer's opinion of what your trade is worth," recommends Craft.
- Are all fees spelled out in the contract and how much are those fees? Look for destination charges, sales tax, and title fees.