| Before purchasing your next car, you're going to want | | | | of dollars to the amount financed for these products, |
| to check for hidden costs, add-on fees, and other | | | | but not disclose the price increase until the last possible |
| charges. You could end up spending hundreds, even | | | | moment, when the financing contracts are being |
| thousands, of dollars over the lifetime of your loan. | | | | signed. |
| Once you've found the car you want, it's time to sit | | | | 3.) Documentation and Administration Fees |
| down with your sales rep to negotiate the terms of | | | | |
| your contract. After a little back and forth on price, | | | | Federal, state, and local governments are pushing |
| figuring out your interest rate, and calculating your | | | | more and more of their regulatory cost onto the local |
| monthly payment, you're ready to sign on the dotted | | | | dealerships. In an effort to offset some of these fees |
| line, right? | | | | and services dealers are required to perform, most |
| Not so fast. | | | | add, a documentation or administration fee to the total |
| When you read the fine print you may find that | | | | cost of the transaction. Depending on state and local |
| additional fees and charges have found their way into | | | | regulations, fee adding $100 to $150 seem reasonable |
| your contract - including add-ons you didn't necessarily | | | | and cover most of these additional items. These |
| ask for. | | | | services include: |
| Most car buyers are so focused on getting the best | | | | - Duplicate Title Fees |
| interest rate and negotiating the most affordable | | | | - Notice of Security Interest (to perfect lien) |
| monthly payment that they're unconcerned with the | | | | - 30-day Permits |
| fine print of the contract. By the time they get to the | | | | - Federal terrorist matching data bases |
| step where they review and sign the paperwork, if the | | | | - Federal information privacy requirements |
| sales rep is throwing industry terms at them that they | | | | - State vehicle id verification |
| don't fully understand, they're becoming exhausted | | | | - Highway Patrol Inspections for out-of-state titles |
| from the entire process and just want to get it over | | | | - Registering leases at customer's county of residence |
| with. | | | | - Carfax |
| Here are a few insider tips to make sure you don't | | | | - FedEx charges/Shipping charges |
| regret signing those papers. | | | | - Additional title addendums |
| 1.) Read the Fine Print | | | | - Truth in lending record retention Some dealers have |
| While this seems pretty obvious and self-explanatory, | | | | taken up the practice of marking up documentation |
| it's amazing how trusting the consumer can be. | | | | and administrative fees and are now charging as high |
| Honestly, the last time you bought a car, did you read | | | | as $300 to $500 per sale. A few are even higher. The |
| and fully understand the contract before you signed it? | | | | charge for most of these fees seems to be more |
| Probably not. Most people don't. | | | | based on getting a customer to pay extra after the |
| Some unscrupulous car dealerships are betting on that. | | | | customer has finished negotiating, not the average |
| Because most people don't read the fine print, some | | | | amount it cost to get most deals through various state |
| sales reps can slide in additional, undisclosed charges | | | | and federal regulations, as implied. |
| or extras with huge mark-ups to their profit. | | | | 4.) Ask for a Menu System Disclosure |
| Also, make sure there are no blank spaces on your | | | | The best disclosure method I've seen in years involved |
| finance contract that can be filled in later - wherever | | | | using a menu system. On a separate sheet of paper |
| there are blank spaces, write in "$0" or "N/A." | | | | the rep produces a document that includes: |
| 2.) Typical Extras | | | | The negotiated price of the vehicle or trade difference |
| Most of us are familiar with learning about the | | | | The additional price of suggested extras (these can be |
| standard features of an automobile and then figuring | | | | shown as various option packages that may save |
| out which additional features we are willing to pay | | | | money when bought in combination and as individually |
| extra for, but here are some extras to look out for | | | | priced options) |
| when reviewing your contract: | | | | New totals initialed by both parties |
| - Rust proofing | | | | This procedure makes sure that any suggested extras |
| - Extended warranty | | | | are properly explained and disclosed. It also allows the |
| - Fabric protector | | | | customer time to consider each item separate from |
| - Car alarm (including Lojack, a device police use to | | | | the longer and potentially confusing finance documents. |
| find your car if you report it stolen) | | | | The final numbers from the menu should get carried |
| - Paint sealant | | | | over directly to the finance document. |
| - Credit life insurance | | | | 5.) Other Costs |
| - GAP | | | | When buying a car, remember that there are other |
| - Window etching | | | | "hidden" costs (or, costs that aren't usually considered), |
| The value of such extras depends on individual | | | | that go beyond the dealership. |
| customer needs and situations. If the sales rep | | | | During the lifetime of your vehicle, you're going to have |
| attempts to tell you that some or all of these extras | | | | to pay for registration and tags, taxes, insurance, oil |
| are standard for every vehicle on the lot, ask to order | | | | changes and fuel every year, and periodically pay for |
| your car from the factory, or suggest the dealership | | | | maintenance and repairs. Older models (cars more |
| trade with another dealer that hasn't pre-packaged | | | | than 3-5 years old) may cost less up front, but you will |
| their vehicles. | | | | likely need to factor more maintenance and repair |
| Extra products can add thousands to the negotiated | | | | costs into your budget than if you bought a newer |
| price of the vehicle. Most products fill a customer need | | | | model. While new models need fewer repairs and |
| that when priced and disclosed correctly and can add | | | | maintenance work, you will have to pay more up front. |
| real value to the whole transaction. | | | | Your wallet does not have to go through the ringer the |
| The problems with extras occur in two areas. First, | | | | next time you decide to visit a new or used car dealer. |
| when the sales rep doesn't spend the time necessary | | | | You can protect yourself from blindly signing into an |
| to determine which products fit the specific needs of | | | | unfavorable car deal by doing your homework, going |
| the customer. Rather than suggest specific extras | | | | to a car dealership with a good reputation, being |
| individually priced, the sales rep lumps all the products | | | | prepared, asking questions, and double checking behind |
| together and pushes you to buy them as a package. | | | | your sales rep. |
| Second, unscrupulous sales reps can add thousands | | | | |