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Car Buying Contract \/\/TOP\\\\


Darren and Courtney Johnson sit on the back of a truck outside their home in Center Hill, Fla. Three weeks after they bought a used SUV and took it home, they were told by a dealership manager that they needed to return and sign a new contract with different terms. Things went downhill from there. Octavio Jones for NPR hide caption




car buying contract


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"I received a phone call from the finance manager of the dealership," Darren Johnson says. The manager told them the financing for the car had fallen through and if the couple wanted to keep it, they had to come back and sign a contract with different terms.


The Johnsons bought a car from Greenway Hyundai Orlando in Orlando, Fla. The dealership told them they needed to sign two other deals after their initial purchase. After the Johnsons refused to sign the third contract, the dealership repossessed the car. Octavio Jones for NPR hide caption


Usually, when you finance a car through the dealer, technically you owe the dealership the money for the car. But the dealer wants to quickly sell the credit contract you signed to, for example, the credit arm of Ford or Toyota or some other auto lender.


But Paul Metrey with the National Automobile Dealers Association says the FTC doesn't need to change the rules at the federal level. He says the vast majority of car sales go through with no incident. "You have tens of millions of transactions where this happens all the time," Metrey says, even when the sales contract gives the dealer the right to cancel it later.


So he says there's nothing wrong with contracts that give dealers the right to cancel after the fact. He says he doesn't have data on problems with yo-yo sales but that it seems to him that it's rare that the original terms don't work and a car buyer needs to be called back.


The dealer association says car buyers like the current system and changing the rules would create unnecessary delays. Dealers call these contracts spot deliveries because they allow buyers to take the keys and drive off right away, on the spot, even if the dealer hasn't finalized the financing.


She says the salesman didn't say anything about the sale not being final as she drove away. But then, eight days later, came the yo-yo phone call. She says the dealer told her the financing didn't work out, she had to come back, sign a different contract, and make a $2,000 down payment.


The police returned the car to the dealership. AutoNation said in a statement to NPR that the sale had a "stipulation" that Flynt would provide a copy of his Social Security card the next day and that he did not. Flynt and his attorney both say that's not true, that there was no stipulation about a Social Security card and that it's not mentioned in the sales contract Flynt signed.


"Once the customer signs the paperwork and we sign the paperwork, that's a contract ... it's done," says Scott Addison, the head of sales at Fitzgerald Auto Mall, which operates 23 dealership locations in Maryland, Pennsylvania and Florida.


For their part, Courtney and Darren Johnson in Florida managed to find a lawyer who took their case, which ended up in arbitration as is required in many sales contracts. But it turns out suing a car dealership can be perilous.


That's a big reason he'd like to see the FTC craft a rule that directly addresses spot-delivery and yo-yo sales. "Having some bright line rules," he says, would make the buying process more transparent for buyers and "would make the law much easier to understand and interpret and enforce."


Buying a car is a major purchase; it is also usually a complex transaction involving a contract, financing, and a warranty. You will want to think carefully about each of these aspects of your decision. You will also want to be aware of some specific protections are available to you under the law.


First you must choose between buying a new car and buying a used car. A new car may cost more but will come with a longer warranty and no history of abuse or neglect. However, new cars depreciate (lose value) almost immediately when they leave the new car lot, which means that if you can find a well-cared-for used car, it might be a good bargain.


DO NOT leave with your new car before the contract has been finalized completely and signed by both parties. This is especially true if you are financing through the dealer and/or leaving a trade-in vehicle behind.


It has been known to happen: the consumer leaves the old car as a trade-in and drives away in the new car with only a verbal agreement about the amount of the monthly payment. The contract just needs final approval - "a mere formality" - by a manager who is not immediately available.


Get all promises about service and guarantees in writing in the contract and in the final copy of the buyer's guide. If you were promised something but it is not in writing, do not sign. If the seller offers a warranty, it must be in writing for it to be valid.


The buyer's guide becomes part of the contract at the time of the sale, and any guarantees listed on it override any restrictions in the contract. If the sale is in Spanish, the buyer's guide must be in Spanish. If you don't see the buyer's guide in the car window, ask to see it before you agree to buy a car.


The law prohibits rolling back or changing the number of miles on an odometer. Texas law requires the seller of any used vehicle to state on the title assignment the total number of miles the vehicle has traveled. Make sure you get a copy of the odometer statement when you sign the contract.


If you order a new vehicle to be delivered at a later date and the vehicle is not delivered within 15 days of the anticipated delivery date recorded on the purchase contract, you can cancel the contract without penalty.


There are a number of auto advisory and buying services that can assist you in deciding on a make and model, and then negotiate for you. This can save a substantial amount of time in the car-buying process. Before signing up with such a service, find out exactly what it will cost and what you get for your money. Do not give the money for the vehicle to the broker or buying service; money must be paid directly to the dealer that delivers the vehicle.


While you will probably negotiate on the price of the car, you may also need to negotiate other aspects of the transaction, including financing terms and trade-in value. Optional additions to the purchase may also be negotiated. These can include service contracts, add-ons such as spoilers, vehicle protection options like protective paint coatings, and credit insurance.


It is important to remember you always have the right to walk away if you are not 100% satisfied with your deal or dealership. You must walk-away, however, before you sign any contracts. Once you sign the contracts, there is no law that allows you to cancel the contract for any reason within three-days of purchase.


If your contract states it is "subject to financing" or some other contingency, it is not advisable to take the vehicle home until financing arrangements have been completed or the contingency is met. By law, the dealer has 4 working days from the time of purchase (excluding Saturdays, Sundays, and holidays) to find financing or resolve the contingency and finalize the sale. If that is not done, there is no binding contract and the dealer must offer to return your contract documents, down payment and trade-in vehicle before attempting to negotiate a new agreement with you. If you have taken possession of the car, you must promptly return it.


Changing the Terms of the ContractAfter a deal is agreed upon and the contract signed, if you are contacted by the dealer saying they now need a larger down payment or higher monthly payments, you are not required to accept these new terms.


By law, the dealer has 4 working days from the time of purchase/lease (excluding weekends and holidays) to find financing and finalize the sale according to the terms of the contract. When the dealer fails to locate the financing specified in the contract in that time period, there is no binding contract and the dealer must offer to return your contract documents, down payment, and trade-in vehicle before attempting to negotiate a new agreement with you.


When buying a car at a dealer, you'll need to sign the car purchase agreement (or dealer bill of sale), the title, an odometer statement, and sometimes a damage disclosure statement. Be sure to get copies of these documents from the dealer, and don't sign anything you don't understand.


A car purchase agreement serves as a contract between you and the dealer that finalizes the terms of your car purchase. The dealer may call it a car purchase agreement, a car sale agreement, or dealer bill of sale. However, a bill of sale is typically a simplified version used when buying a used car from a private party. The car purchase agreement is an official document that outlines all the details of the sale, including:


Once you sign the car purchase agreement, the contract is legally binding. There are exceptions to this, specifically regarding lemon laws. The signing of the agreement is your last chance to review the sale information and change your mind before purchasing.


A car purchase agreement serves as a contract between you and the dealer that finalizes the terms of your car purchase. The dealer may call it a car purchase agreement, a car sale agreement or dealer bill of sale. However, a bill of sale is typically a simplified version used when buying a used car from a private party. The car purchase agreement is an official document that outlines all the details of the sale, including:


Be sure to review the terms before signing any motor vehicle sales contract and financing documents. Check to make sure that the amounts, rates, and add-on items in the documents match what you discussed with the sales representative. Additionally, you should make sure that the information on the financing documents matches what you put on your application and that the terms are affordable. 041b061a72


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