The Finance Office

Closing the deal in the Finance Office.

car dealer finance officeYou did everything you were supposed to do. You put your best deal on the table and they accepted it.

Now you move to the Finance Office.

You think you are done negotiating and all you need to do is sign the paperwork and drive home.

Not so Fast! The Finance office is the biggest profit center in the car dealership. 

That nice person behind the computer is a slick salesperson. It is his job to review the deal and see where he can squeeze more profit out of you.

Do not be in a hurry to sign and get out or you will be very sorry.

A good finance salesperson will nail you for $3,000 – $4,000 more dollars and hide it in your contract if you do not keep your guard up.

First of all, learn to say NO to anything they try to up sell you on. You must read the contract very carefully to make sure the numbers are exactly what you agreed upon.

Once you sign the contract you are stuck.

Too many people in their haste to get home, sign the contracts without reading them thoroughly.

They get home and start looking through the paperwork and find items they didn’t want or loan rates that are higher, the length of the loan has been extended etc…

Once you sign the contracts you are stuck. You already signed a form that stated that you read and understood all the items in the contract. No court is going to hear your case. Take your time and read everything.

If you are not good at reading contracts bring someone with you that can. Never take the Finance salespersons word for anything!

If you have already secured a loan online it is a lot easier to get out of there. Just tell him you want the paperwork done quickly with no extras and get out of there.

He may try to sell you on their financing and up sell you on more items. SAY NO THANKS!

Tell him you have 20 minutes to get this stuff done or you will leave. If you are getting financing through the car dealer you must verify that you have a loan already approved and are signing contracts for that loan.

Subject to Financing or Subject To Loan Approval.

This is a very common tactic finance salespeople use. If you see this on the contract do not sign and above all, do not drive the car home.

What usually happens here is several days after you drive home with your car, you receive a phone call from the salesperson that your loan fell through and you need to come back in and resign through another lender for more money.

They may say we have great news, we got you a lower payment, and all they have done is increased the length of your loan. They do this more often with bad credit or sub prime buyers who are usually more cooperative.

If they don’t have your loan approved, stand up and tell him that you will come back and sign when you has an approved loan with a payment book.

Never sign a contract without knowing your lender, interest rate, length of loan and monthly payment. Once you sign and drive home with your new car you are at their mercy and you will end up paying more.

Check the numbers on the contract carefully.

  • Is the sales price the one you agreed upon?
  • Did they subtract the rebate from the agreed upon sales price?
  • Does the trade in allowance match what they told you it would be?
  • Did they deduct the equity in your trade from the selling price?
  • Is the length of the loan exactly what you want?
  • Is the interest rate what you agreed upon?
  • Is the monthly payment correct?

Look carefully for any additional charges that don’t look familiar. Do not sign until you understand every item on that contract.

There is a lot of paperwork associated with buying a car. It is overwhelming and many people will just assume everything in there is legit! That is what the finance officer is hoping.

Read the sales contract very carefully and look for anything with a dollar sign next to it. The law requires the car dealer to list every cost in the contract.

Look for added insurance, extended warranties, dealer add ons, anything with a dollar sign next to it that you do not recognize must be addressed! Do not sign until it is removed and the numbers you agreed upon are on the contract.

The Interest Rate Bump.

If you are not securing your own financing, than you are relying on the Finance salesperson to shop for the best rate for you.

Unfortunately, he is shopping for the most profitable loan for the dealership.

The most common trick is to get you approved at the lowest rate and then bump a couple extra points on it. They will get you 6% and tell you the best rate they can find is 8%. They pocket the profit.

You must know your credit score and the current interest rates or you will never know what interest rate is right for you. If he is too high tell him he needs to do better. If he tells you he can’t, tell him you will come back tomorrow with your own financing. He will quickly rerun the numbers and you will win. Be careful that he does not increase the length of the loan to keep your payment lower.

He has a list of up sell products to increase profit. (Just say NO)

If you are not paying attention the finance salesperson will try to sneak lots of extras into your contract. Many people drive home unaware of these extras. Strict payment buyers fall for this all the time.

Many of the up sells will be presented to you as a great deal or the lender is requiring it.  Don’t fall for these tricks and lies.

1. Extended Warranty:  This is a huge profit area for the Dealer.

They will push this one hard on you and you won’t even know what the Warranty includes. There is nothing wrong with buying an extended warranty, just don’t buy it at the dealer.

Tell them you don’t want it and than shop for your extended warranty online when you get home. You will save about 60% and will be able to choose the best warranty for you.

Do not fall for the line that the lender is requiring it. It is a lie.

They use this line most often with bad credit buyers. We strongly recommend Warranty Direct for the best extended auto warranty.

2. Credit Life Insurance: This is a scam. They will tell bad credit buyers and first time buyers that it is required by the lender. This is a big lie!! If you really feel that you need it buy it yourself.


Check you sales contract carefully for any add-ons that are related to any kind of insurance!

3. Gap Insurance: Gap insurance covers you when you owe more on the car than it is worth.

Most people that put less than 20% down on their car will be upside down for the first couple of years.

If you owe $20,000 to the lender and you total your car that is worth only $16,000, you will owe the lender $4,000 because the insurance company will only pay $16,000. You can avoid this by putting a big down payment on the car.

If you cannot do that or you are doing one of their 0 down deals you should look into gap insurance.

Don’t buy gap insurance at the Car Dealer, you can get it online for much less.

4. Rust Proofing: This is another big profit area for the dealer. Most new cars have rust protection on the warranty. Just say no. If he tells you it is already on the car, tell him you are not paying for it.

5. Fabric Protection: This is a great one! They will charge you several hundred dollars for a product you can buy at Walmart for a couple of dollars. If you want fabric protection buy a couple of cans of ScotchGuard and do it yourself.

6. Paint Sealant: Are you kidding me? Can you say, wax your car? Again, just say no!!

7. Car Alarm: They will put the cheapest junk alarm in your car and make top dollar off you. If you want an alarm go to a professional and get a good one.

8. VIN Engraving Package:  He will say you should absolutely buy a VIN engraving package where they engrave the VIN on your windshield, so that the thieves are less likely to steal it.

This is priced around $300 and if you feel that you really need it, do it yourself for about 20 bucks. If he tells you it is already on the car, tell him you will not pay for it!

The above items are the most common up sells that will be presented to you or placed in you contract without your approval. There will probably be new ones popping up all the time.

The finance salesperson is going to give you great reasons as to why you need these up sells. Remember he is a trained professional and will hit you with sales pitches that sound very convincing.

JUST SAY NO!! If there are any items that you feel you need, buy them yourself and save big money.

Signing the all the paperwork.

Do not rush through this process. They are going to give you numerous papers to sign and explain to you what each one is.

Read each one over carefully. Make sure there are no hidden extras and if you see any blank spaces fill them in. If something is left blank the dealer may fill it in after you leave, costing you more money. Do not let them charge you for Dealer prep this is another extra they tack on for profit.

Do you know what the current tag and title fees are in your state?

Find out before you buy or they may tack on more than it costs. More profit to the dealer.

Make sure all the options you are paying for are on the contract.  Just compare the window sticker with the contract.

Make sure all the numbers add up. Check the interest rate, monthly payment, and length of the loan. It must match what you agreed upon.

Many dealers will extend the loan by several years to get you a lower payment or bump your interest rate, so pay attention.

Make sure that you have already been approved by your lender. If the contract reads Subject to Financing you do not have a loan yet and will end up paying more.

Never drive home in a car until you have the loan approved in writing. 

Know what the sales tax is in your area. Some dealers will bump up the sales tax and pocket the difference. This is illegal but it happens.

Avoid verbal agreements! If they said they will do something for you get it in writing! Don’t fall for the bring it in next week and we’ll take care of that for you. If it is a verbal promise you will never get it.

Do not ever sign anything you do not understand! If you don’t understand what you are signing ask them to clarify it. Once you sign you are responsible. 

Make sure it is the car you wanted. Many cars come with EX, LX, SE, GX and it makes a big difference in the package of the car.

Check the VIN number on the contract. Make sure it matches the VIN number on the car so they don’t try to switch you on another car.

REMEMBER, once you sign you are responsible. It seems like a lot of work, but too many people in a hurry to sign, end up with something they didn’t want and are stuck because they didn’t bother to read each item carefully before signing.

Finally make sure you have a copy of everything you signed before you leave the dealership.