Car buying guide
Understand the deal before you sign
Straight answers to the questions car buyers actually ask about price, fees, add-ons, financing, trades and paperwork. Written by RD Matharu, Founder of ASK RD.
What should I check before signing a car deal?
Before you sign, check seven things: the selling price of the vehicle, every fee, every add-on product, the taxes, the trade allowance and payoff, the amount financed, and the APR, term and payment. Each of those should appear in writing on the paperwork you are being asked to sign.
Read the guideWhat is a buyer's order?
A buyer's order is the itemized document a dealership uses to present a vehicle transaction. It lists the selling price, dealer fees, optional products, taxes, government fees, any trade allowance and payoff, cash down or rebates, and the resulting balance due or amount financed.
Read the guideWhat dealer fees should I question?
Fees on a car deal fall into two groups. Government fees — title, registration, license and taxes — are set by your state and passed through. Dealer-charged fees, such as documentation or processing fees, are set by the dealership.
Read the guideWhat are dealer add-ons?
Dealer add-ons are products, packages and services added to a vehicle transaction beyond the vehicle itself. Common examples include appearance or protection packages, paint and fabric treatments, window tint, nitrogen tire service, theft-deterrent products, service contracts and GAP coverage.
Read the guideHow do I calculate the real price of a car?
The real price of a car is the selling price plus every charge attached to the transaction — dealer fees, government fees, taxes and any optional products — minus rebates, incentives and credits. Cash down and trade equity reduce what you owe, not the price itself.
Read the guideHow should I compare car financing offers?
Compare financing on three figures together: the amount financed, the APR, and the term in months. Those three produce the payment, so any offer that gives you a payment without all three is incomplete.
Read the guideHow does a trade-in affect a car deal?
A trade-in involves two separate numbers. The trade allowance is what the dealership credits you for your vehicle. The trade payoff is what you still owe your lender on it. The difference between them is your equity.
Read the guideWhat is negative equity on a car?
Negative equity means your loan payoff is larger than the value your vehicle is being given in trade. If your payoff is $21,300 and the allowance is $18,500, you have $2,800 of negative equity.
Read the guideWhat should I look for on a car payment quote?
A payment quote is only meaningful when it shows the amount financed, the APR and the term alongside it. Without those three, the same payment can represent very different deals.
Read the guideWhat is GAP insurance and what should I check?
GAP — guaranteed asset protection — is an optional product that covers the difference between what you still owe on your loan or lease and what your insurer pays if the vehicle is stolen or totalled.
Read the guideStump the Dealer
A recurring ASK RD format: an anonymized or hypothetical deal, and what a buyer should question about it.
See the format