The Finance Office

Be Afraid,
Be Very Afraid!

What to expect in the car dealers Finance Office...
The 10th of 11 essential steps in the car buying guide

It's done! All that's left is to head into the car dealers Finance Office and sign some paperwork...This should be easy enough.

The negotiating is over, the sales person has taken three passes at you and you've even gotten to meet the nice sales manager (closer), and have finally agreed on payments.

Whew...What a relief that's over with.

At this point all you can think of is showing off your new car to all your family and friends...Boy, what a nice car. Unfortunately, now is not the time to get distracted by your emotional high. Now is the time to...


The most important part of your car buying adventure is about to take place and trust me, you'll want all your whits about you.

If you think you're out of the woods you're wrong. A car dealers Finance Office is where the majority of scams take place in this business. In fact, I refer to it as "Scam City."

I'd be willing to say that 80% or more, of all car dealership scams you might hear of involve the Finance Office.

That being said, I don't want you to automatically assume that all Finance Managers are going to scam you, but if you've run into the one that will, you'd better be ready.

I want to quickly state that I do not believe that the majority of Finance Managers are bad people with bad intentions, but the ones that are will stick it to you if you give them the opportunity.

I've personally seen some very elaborate ways to stuff unwanted products into a contract with the customer being none the wiser.

For most people, if their payment stays the same as what was quoted on the sales floor they believe everything must be in order and they will sign away.

What if the payment you were quoted on the sales floor
was packed to benefit the Finance Manager?

Packed is a term used to describe "payment packing" in the car business. Payment packing is the practice of quoting inflated payments to help the car dealers Finance Manger sell products to you in the Finance Office.

If you're dealing with a legitimate Finance Manager and decide that you do not want the vehicle extended warranty, GAP insurance, or any other products they are offering, then the Finance Manager will reduce your packed payment to your real base payment and away you go.

On the other hand, if you're dealing with a not so legitimate Finance Manager then they'll try to fill that packed payment with a product you did not opt for, so they can make money.

I've seen Finance Managers stuff up to $2,000 worth of products into a deal without the customer having a clue, because they weren't paying attention.

How they are able to stuff $2,000
worth of unwanted products into your contract?

Let's start back at the sales persons desk. Your real base payment should consist of:

  • Sales price minus down payment
  • Tax, title, & license
  • Dealer documentation fee
  • and your finance charges
So let's say your real base payment is $300. The sales person quotes you payments of $315 and you agree to that, not knowing your actual payment is less.

This leaves $15 of "leg," a common term used to describe how much the payment has been packed. This may not sound like much, but over a 72 month contract this equates to $1,080.

The good Finance Manager will essentially give that back to you, but the unscrupulous Finance Manager will stuff that $1,080 somewhere into your contract to make themselves money.

Again, most people are none the wiser. They will see that their payment is the same and gladly sign away.

Don't let this happen to you. The two most important documents you'll sign in the Finance office are the Retail Installment Contract and the Purchase Order.

Never sign either one of these blank...
Consider yourself warned!

I can't begin to tell you how many people will sign a blank purchase order! Don't let this be you.

There is no reason why the Purchase Order, no matter what they tell you, should not be printed.

The Finance Manager should also fully disclose these forms at a pace that is comfortable for you to follow along. If they are going to fast, stop them and ask them to explain further.

You'll also want to watch out for highlighted contracts. This can be a sign that the Finance Manager is trying to get your attention to the signature line and keep your focus off the rest of the numbers on the contract.

I personally highlight Motor Vehicle forms, to speed up the process (I've signed literally thousands of deals, and it can get a little repetitive), but I never, ever highlight contracts.

To Sum This Up

Buying a car is typically the second largest purchase most people will make, so you'll definitely want to take this step seriously and know what it is you are agreeing to pay for.

Always keep in mind that at this point in the transaction you have not legally committed to anything. If you feel the Finance Manager is being deceptive get up and leave. If you feel they've broken the law call your States Attorney General Office.

Don't forget to bring reading glasses, if you use them. You don't want to trust someone you just met 8 minutes ago to read you the fine print of the 5, 6 or 7 year contract you are about to sign.

Lastly, when you're on your way into the car dealers Finance Office remember it's time to clear your head, put on your reading glasses and know what's on your contract.

Now that you know what to expect in the car dealers finance office...
What would you like to do next?

< Go Back To Step 9
Borrowed Car Agreement
|Move On To Step 11 >
Take Delivery

Or you can...

Review the Car Buying Guide table of contents by returning from -
Finance Office to the Car Buying Guide

Return to Insider Car Buying Tips home

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