Car Buying 101: The Paperwork

With the "Cars for Clunkers" program, one of the biggest complaints by auto dealers has been the amount of paperwork that has to be filled out and the fact that the turnaround has been so slow.

A new issue cropped up in New Jersey where dealers were finding four out of five of their applications returned and that only about two percent of the money owed was being paid.

So, what is the problem? After all, the "Clunkers" program doesn't take an advanced degree in calculus or advanced credentials in car appraisal to figure out. It's a pretty straightforward program that consists of trading a vehicle made in the last 25 years that gets less than 18 mpg for a new vehicle that gets more. There is no need for an appraisal because the dealer is given scrap value for the car and the only items that might vary are incentives offered by the manufacturer and whether the buyer will get $3,500 or $4,500.

At this point, it has been estimated this program has sold about 300,000 cars, or slightly more than one-third of the potential base of vehicles has been sold. And, finally, the Administration has realized there's a paperwork problem and has tripled the number of people working on the program.

The slowdown - and your slowdown, if you let it happen - could be the paperwork. Dealers, according to the director of New Jersey's auto dealer coalition, are, as is usual, rushing to get their paperwork in.

Once the dealer and you reach agreement take your time with the paperwork. Don't let anyone try to rush you through each step of the way as they try to pile on the sales numbers.

First, be sure that any offer sheets that may be required are filled out, signed and dated correctly. They may only be for the dealership's in-house departments but it's a good idea to get you AND THE DEALER conditioned to doing everything correctly.

Then, make sure that the purchase and sales agreement that you will fill out is filled in correctly. Be sure that all of the boxes are correctly filled in. The purchase and sales agreement is the document from which the dealership draws much of its information so be sure that it has your correctly spelled name, current address, and, if required, current phone number. You do not have to include your Social Security number on a purchase and sales as this is not a credit application so even if you are asked for your Social Security, do not put it down. If they require a number, give them your state license number. It's likely to be needed somewhere in the paperwork trail.

Then, let the dealership fill all of the numbers in on the purchase and sales and once that is finished, take a complete look at the document. Make sure that all of the right boxes are filled in. If there is space for the Vehicle Identification Number of the "trade" and mileage of the "trade" and color and such information, be sure that it is also correctly filled in. Hold your dealer's feet to the fire to be sure that all information is correct.

Likewise, if there is any federal paperwork involved be sure that it is filled in correctly because this is the factor that is causing rejections in many cases. A spokesman for the American Automobile Assn. in Washington noted that many of the problems were caused by haste as dealers rush to get their forms in. (This is a common occurrence in the auto industry as dealerships do try to speed their income. It's only natural to do this, but it does lead to errors as dealers across the country have found out. New Jersey is only one example but four of five sets of paperwork are rejected. This is actually not uncommon in federal work, either, as many other programs routinely reject incorrectly filed paperwork.)

Said the AAA spokesman, "It's important that all of the 't's are crossed and the 'i's are dotted."

That cannot be emphasized enough and it should make you take your time when you are in the "business office" to look over each piece of paper to make sure that no boxes are unchecked that should be checked or that they forget to make sure the mileage statement is included.

Granted, this is actually the dealer's responsibility, but since it does impact directly on your new vehicle, it is also incumbent on you to make sure the paperwork is correct. And, remember this, if the business manager has a problem with you wanting to make sure the paperwork is correct or if the sales manager has a problem, then, just cancel your deal with that dealer and go to another one who will work with you. Unless they are funding you via an in-house finance department, then the ball is in your court.

So for this part of Car Buying 101: the key phrase is "hurry up by slowing down!" You'd be surprised it works.

Sources: Author's experience of nearly 40 years as an automotive writer and nearly a decade in direct car sales. AAA in Washington, D.C., New Jersey Auto Retailers Coalition.