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Step
Six
Closing the deal...
When you reach an agreement on the
purchase price of a used car, you may be tempted to think you're
home free. In fact, there are several crucial steps that need to be
done correctly, or all your hard work up to this point could be for
naught.
If you are at a dealership, you still have to go through the Finance
and Insurance process (also called "F&I"). If you are
buying a car from a private party, you have to make sure that
payment is made and the title and registration are properly
transferred.
In both cases, you also need to make sure you have insurance for the
car you just bought before you drive it away.
At the Dealership: The F&I Room
The deal you made with the salesperson needs to be put into a
contract for you to sign. Before that's done, the F&I person
will need some information from you. For example, she will ask how
you are paying for the car. If you say you are financing it through
a bank or credit union, the F&I person will probably offer to
beat their interest rate. Why not see if they can? But make sure you
are quoted not just the interest rate but the monthly payment and
the length of the loan.
Also, the F&I person will probably try to sell you a number of
additional items such as:
- An extended warranty
- Alarms and other anti-theft services such as Lo-Jack
- Prepaid service plans
- Fabric protection
- Rust proofing
- Emergency roadside kits
Some people swear by extended warranties, so this is something you
might want to consider (unless your used car is certified or still
under the manufacturer's warranty). However, the other items
typically sold in the F&I room are expensive and hold little
value for you. Don't be misled by the offer that the extra expense
will be wrapped into the monthly contract; it is still costing too
much.
The F&I person may seem like a financial advisor, but he or she
is really an experienced salesperson. Some F&I people can become
very persistent trying to sell these items. Be firm. Say, "I'm
not interested in any aftermarket extras, thank you. I just want the
car."
Once the contract is ready, review it thoroughly. In most states, it
will contain the cost of the vehicle, a documentation fee, a smog
fee, a small charge for a smog certificate, sales tax and license
fees (also known as DMV fees). Make sure you understand the charges
and question the appearance of any significant, sudden additions to
the contract.
You will also be asked to provide proof of insurance before you
drive away in your used car. Call your insurance agent before
leaving for the dealership to advise him you will need coverage if
you make a deal. All you need to provide is the VIN number to
activate the policy. The insurance agent can fax a temporary policy
to the dealership before you hit the road.
Finally, you should inspect the car before you take possession of
it. If any work is required, and has been promised by the dealer,
get it in writing in what is known as a "Due Bill." Make
sure the temporary registration has been put in the proper place and
-- you're finally on your way.
Private Party Sales
When you buy a car from a private party, you will probably be asked
to pay with a cashier's check or in cash. But before money changes
hands, make sure you will be able to register the car in your name.
Request the title (sometimes called the "pink slip") and
have it signed over to you. In most states, you will then mail the
title to the Department of Motor Vehicles and a new title will be
issued to you. In some cases, you will need to get a temporary
operating permit until your new registration arrives.
Rules governing vehicle registration and licensing vary from state
to state. Make sure you check with the DMV in your state (much of
this information is now available on DMV Web sites). When in doubt,
contact the DMV; some registration can be handled by the American
Automobile Association (AAA).
But what if the seller still owes money on the car and the bank is
holding the title? One way to deal with this is to conclude the sale
at the bank where the title is held. Have the seller call ahead and
make sure the title is ready. Once money has changed hands and the
bank has been paid the balance of the loan, the seller can sign the
title over to you.
In some cases, however, an out-of-state bank might hold the title.
If so, go to the DMV and get a temporary operating permit by showing
your bill of sale (in some states the bill of sale might have to be
notarized). Then, after the seller pays off the balance of the loan
with the proceeds of the sale, the title will be mailed to you.
Once all of the paperwork is complete, it is finally time to relax
and begin enjoying your new purchase: a good used car.
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1.Choosing the
right car
2.Financing the used car
3.Shopping for a used car
4.Test-Driving a used car
5.Negotiating for a used car
6.Closing the deal
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