Sign and Save: The Importance of Documents in Vehicle Transactions

When you go to purchase a vehicle you typically review and sign several documents.  This signing party occurs after a fair amount of haggling and negotiating on the features in your vehicle, the price of the vehicle, and other important details.  Often hours have passed from when you first stepped on the dealership lot to when you take that walk to the finance manager’s office to “do the paperwork.”  Then you begin reviewing and signing documents which likely include some of the following:

  • Bill of Sale (states sales price of vehicle plus tax, tag & title fees, trade-in credit, etc.)
  • Finance contract a/k/a Retail Installment Sales Agreement (provides details on amount financed, finance charge/interest rate, payment amount and frequency of payment, when payments are due, etc.)
  • Damage Disclosure Statement (tells you if vehicle has been a salvage or flood vehicle, if vehicle has sustained other significant damage)
  • Title Application form (provides the info to be submitted to the DMV so you can get a registration and license tag/plate for the vehicle)
  • Conditional Delivery Agreement (purports to notify the consumer that the vehicle transaction is not final—in spite of the dealership officials stating otherwise—until the finance contract is accepted by a lender or financial institution)
  • Warranty Agreement or Vehicle Service Contract (states what parts and systems of the vehicle are covered by the dealership, manufacturer, or third-party entity for repairs and for what period of time and under what conditions)Now hear this!

You would be shocked at the number of people who contact me for assistance yet do not have some of these critical documents.  Sometimes the dealer rep tells the person the documents will be provided at a later date while in other situations the dealer just shuffles the papers across the table for the person to sign and neither discusses nor provides copies.  Always, always, always get a copy of your Bill of Sale and finance contract, warranty agreement/vehicle service contract, and any conditional delivery agreement.  Really you should not even have to ask for it; any reputable dealer will give you a copy of these and several other significant documents so there are no questions as to the terms of the vehicle transaction.  And once you get these documents keep them in a safe place.  No, the vehicle is not a safe place.  Keep them at home in a file folder, drawer, safe, etc. 

Right now I am handling a case where the dealership failed to provide my client a finance contract.  Even worse for the dealership, they cannot locate their copy of an alleged finance contract.  I use the term “alleged” because my client maintains that she never signed any finance contract or similar document….Wow!  How does a dealership let a vehicle leave their lot without getting and keeping a copy of the document that spells out the terms of the payments to be made for several years to come?  

A few years after my client purchased the vehicle the dealership repossessed the vehicle presumably on the theory that the client was not current on her payments.   Do you think having a finance contract would help in determining the details on these payments?  Moreover what about providing an accurate payment/account history for review to see if the client was in fact behind on the vehicle payments?  An officer of the License and Theft Bureau of the NC Division of Motor Vehicles initiated criminal charges against the dealership representative for not producing a finance contract when demanded to do so.  And now the dealership is trying to devise a legal argument to hold my client to an agreement for which the dealership has absolutely no signed writing….and the dealership’s failure to have a signed finance agreement violates several federal and state laws…… you think the dealership is feeling good about all this?  A trial date has been set and my client and I are anxious to see if the dealership wants to settle this case or try to explain these things to a jury. 

The lesson to be learned is to demand and retain copies of the important documents from your vehicle transaction.  You are entitled– in some cases required—-to be given these documents.  Without them you leave much to chance and you may make it more difficult for an attorney or other person to review your situation and determine your rights and remedies.  Being a smart consumer pays off in the long run.


1 Comment

  1. So true, I got burned in the past for not having a bill of sale. I never had thought of getting the service contract though. Thanks for the info. Will definitely review the next time I buy or sell a car.

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