As dealers try to boost profits on each car they sell — because current demand far outweighs supply — many are padding contracts with extra fees and products without telling the buyer. This means it’s more important than ever to carefully review the sales contract before you sign it.
“We are seeing a record level of fees across the board,” says Jesse Toprak, chief analyst for Autonomy, an electric car subscription service. In fact, while buying a car for his wife, Toprak, a former auto finance manager, discovered the dealer had added a $1,995 “dealer prep fee” to his contract.
Catching such hidden extras — and even honest mistakes — before you sign the sales contract is key because once it’s signed, you’re legally bound to the terms. There are no easy after-the-fact remedies if you see that the purchase price, interest rate, trade-in value and extras are not what you assumed.
Pay attention to the details
“For the average person a car contract is very confusing,” says Oren Weintraub, president of car-buying concierge service Authority Auto in Tarzana, California. When he reviews contracts for his clients, he finds problems and mistakes about 30% of the time.