The Last and Most Important Step in the Car Buying Process

After narrowing your car choice from hundreds of new and used cars, securing a loan and lining up auto insurance, it's time to finalize the deal on your new car. If you're signing the paperwork in person at the dealer's showroom, the Finance and Insurance Manager will represent the dealer. The F&I Manager's job is to sell you last-minute aftermarket add-ons. Just say NO!

Car Buying Paperwork 101

Whether you're buying a new car, leasing a car or buying a used car privately or through a car dealer, you'll sign and/or present a number of papers to finalize the deal:

• Due Bill
• Contract (or agreement)
• Proof of insurance
• Title, tax, license and registration forms

Inspect the Paperwork and Your New or Used Car before Signing

Never sign an auto lease or a new or used car contract until you've fully inspected the paperwork. Print the checklist below and take it with you. Don't feel pressured to agree to any new terms that are not favorable to you. You can walk out at any time. Look for the following inconsistencies:

• If you're buying a car, make sure you are not signing a lease agreement. If you're leasing a car, make sure you're not signing for a loan. Car buying/car leasing errors happen.
• Are all the dollar amounts correct? If not, get them corrected and make sure that you're comparing apples to apples when you speak to the F&I Manager about the loan. If you're talking "cost," and the F&I manager is talking "interest rate," you're speaking different languages. Did the dealer tack on credit life, disability or any other insurance to the loan? If so, get it removed.
• Are there any extra "administrative" charges, like factory delivery charges, advertising fees, additional dealer markup (ADM)? Are there any alphabet-soup additions that you do not understand? Ask the F&I Manager to explain and preferably remove them.
• Has the dealer added any additional aftermarket items to the contract: Extended warranty, LoJack, VIN etching, undercoating, etc.? If so, get the charges removed from the contract.
• Are there any blank lines in the contract? If so, either cross them out and initial them or ask the F&I Manager to fill them in and initial them. You'll need two sets of initials for any changes to any paperwork.

Now that you've inspected your car lease or auto contract, it's time to inspect the car:

• Compare the Vehicle Identification Number (VIN) on the car to the VIN in the contract or lease agreement.
• Make sure that the auto dealer has made all promised changes.
• Check for physical defects and ask the dealer to fix any you find.
• Check the odometer. If the mileage is more than a little over 100 miles, you'll need to renegotiate the car deal -- this time as a used car.
• Check the gas tank. If it's empty, ask for a fill-up.

If there is something that needs fixing or that wasn't added to your car per your arrangement with the dealer, you'll get what's called a Due Bill. It's a written promise from the dealer to fix a specific list of items, even after you've taken delivery on the car. Get everything into the Due Bill before signing the contract.

Sign the Car Lease or Contract and the DMV Paperwork

After you've completed the steps above, it's time to sign the car lease or contract. After you sign the contract, get your insurance company to FAX proof of insurance to your car dealer so that you can drive the car. Department of Motor Vehicles (DMV) regulations vary by state, but in most states you can complete all the sales tax, license and registration paperwork at the dealer showroom for a fee. To check your state's DMV regulations, go to Edmunds.com for this info. Once you've signed this passel of paperwork, your car buying deal is done. Now you're free to drive off and enjoy your new set of wheels -— until the next time.