To help you get more comfortable with the car buying paperwork you can go over a common car bill of sale for a vehicle. Below you will find a copy of a standard Auto Bill of Sale along with a line by line explanation. At first glance it looks like a lot of confusing information, but after you go through this post you will be comfortable and knowledgeable of every item on this car buying paperwork.
The Bill of Sale – Car Buying Paperwork
The automotive bill of sale is the legal document that shows that you purchased a car or truck. Whether you pay by cash, check or finance your car this part of the car buying paperwork is the same. This is the document you will need to get your license and registration if you did not get it at the car dealer. Dealers will usually handle that process in most states, but if you bought a car in a different state you will have to go to your home state and get your plates and registration.
Car Buying Paperwork Line by Line Bill of Sale
A. This section of the car buying paperwork is very easy to understand. It contains your personal information, phone number and date. When you are reading this document before signing check for accurate information and have the car dealer correct anything as needed.
B. Vehicle Being Purchased: This one is easy to understand it contains all the pertinent information about the car you are going to buy. No secrets or car dealer scam here, just make sure that the serial# or V.I.N. matches that of the car you are buying.
C. Trade-In Vehicle: When you trade in a car on your new car purchase the information get placed here. Nothing special here just all the information about your trade-in, like the section above be sure to confirm your serial number or V.I.N. If you do not have a trade-in this section would be blank.
D. This section will be where the information goes when you still owe money on your trade-in to a lender. When you owe money to a lender on your trade-in these spots will include the name of the lender, your account number and the amount of the pay-off that the lender requires. That way the car dealer will send a check to your lender to pay off your old car loan as part of this transaction. Make sure that the pay-off amount is correct. If for some reason the pay-off is different than the amount of this car buying paperwork bill of sale you are responsible for the difference, not he car dealer. For obvious reasons you want to be this that the payoff amount is accurate.
E. This section of the car buying paperwork contains the amount of any manufacturers rebate, the amount of your deposit if you left one earlier and any cash down. Pretty straight forward, just check for the rebate if there was one.
The Money Side of Car Buying Paperwork
F. This line of the Bill of Sale is the cash price of your purchase. This should reflect the real price after negotiations. (example: if you are buying a $20,000 car and negotiated the car dealer down to $18,500, the $18,500 should be shown here. If you followed the Steps to Buying a Car I am sure you got your 4 FREE -No Obligation Price Quotes from Yahoo! Autos before you went to the dealer.
G. Most dealers do not use these couple of lines. Any factory installed options would be included in the line above. Some dealers may use the section to list certain items such as sunroof or navigation, but the price is included in section F.
H. Dealer Installed Options: These lines would include any options that the dealer installed or will install as part of the purchase. It might be any number of different items like a trailer hitch, DVD, sunroof or anything that will be included in the vehicle. The prices of the options should be listed here on the car buying paperwork.
I. Documentation Fee: This is the documentation fee that is allowed by the state for processing the car buying paperwork and documents. This fee is regulated by the state in which you buy you car. I have seen this fee be anywhere from from about $100 up to several hundred. You can check with your state for the exact amount.
J. ERT Fee: This is the Electronic Registering and Titling Fee. Some states have car dealers set up online to do vehicle registering, licensing and titling via the internet and the state controls the amount of the fee that the dealer can charge. This is not something that can be negotiated. It is usually around $25.
K. Dealer Services: What is this??? The car dealer can use this section for anything they need to add on to your car buying paperwork. One of the most common would be a lost title charge, temporary insurance or anything similar. What ever amount shows up here you want a complete explanation and breakdown. If you decide to purchase an extended warranty I am sure you went here and got FREE Warranty Quotes so you will know if you are getting scammed.
L. Cash price of vehicle and options. This is a subtotal of lines F through K. No mystery here just add each line starting with line F.
M. Less Trade-In Allowance: Check your car buying paperwork closely because this line contains the amount that you agreed on to accept for your trade-in. Car dealers have been known to slip a number on this line that is less than the amount you agreed. This car dealer scam often goes unnoticed at the time of signing the paperwork because of all the numbers on the bill of sale. You can’t come back tomorrow and say they made a mistake. This is a contract so be sure ALL of the numbers are correct before you sign.
N. Amount Subject to Sales Tax: Many states allow you to deduct the amount of your trade-in allowance from the car purchased so that you are only subject to sales tax on the difference. This is a pretty good thing that can save you a couple of bucks. If you sold your car to private party and did not have a trade-in you would not have any way to reduce you sales tax. Be sure to take this tax savings into consideration when you are selling your old car to a private party.
O. State Tax: The sales tax based on the state in which you are registering the car. Most people don’t realize that you pay sales tax based on where you live not where you buy. No secrets here.
P. County Tax: This is the sales tax based on the county in which you reside. It is a small amount anywhere from 1/2% to 3%. All sales tax is usually thought of as the state sales tax, but in the car business it is broken down down to state and county tax because it is based on where you live not where you buy the car. This is a way to keep things fair between car dealers so one car dealer doesn’t have an unfair advantage of a car dealer that is in a higher county.
Q. County Flat Tax: Not all counties have this tax but when they do it is a one time tax on new vehicles ( not used) that is usually small about $15 to $25 and mandated by the specific county.
R. Title & Plates or Transfer: This is an amount that depends on the state of registration. This where your charge for new or transferred license plates goes. This is the same amount you pay for plates no matter where you get then because it is controlled by the state.
S. Service Contracts: If you agreed to buy one from the car dealer the amount would be entered here because it is not taxed. Just make sure the amount is what you agreed on with your Finance Manager.
T. Subtotal: This the the sum total of lines from section L through S.
U. Plus Payoff on Trade-In: This amount comes from section D and is the amount that is added back in to your price so the dealer can write a check to pay off your car. Check the numbers to be sure they are accurate. Remember what I said you are responsible for any errors or shortages.
V. Less cash Down and Rebate: These numbers come from section E and are a negative number so it is subtracted from the amount you are paying for you new car. Notice the brackets on the car buying paperwork in this section that mean that it is subtracted.
W. Balance Due on Delivery: This is the final car buying paperwork amount that you are responsible for paying. At this point you write a check or you finance this amount. If you are financing your new car this is the amount financed.
X. This is where your Finance Manager will sign.
Y. This is where you and your co-buyer (if there is one) will sign the car buying paperwork.
I am sure you noticed that both you and the Finance manager signed the car buying paperwork. That is because this is a legal document. It is a binding contract so it requires both parties to sign. The Finance Manager is not the car dealer but they are the legal representative.
See that car buying paperwork bill of sale wasn’t so bad once you take it line by line and take your time. I hope this helps you next time you go to the car dealer and buy a car.
The Car Bill of Sale Part of the Car Buying Paperwork
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