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Automobile loan documents

The short version

  • The main paper is the sales contract. It combines the car deal and the loan into one document — which is exactly why you read it slowly.
  • Check the cost box: APR (the loan's yearly cost with fees included), amount financed, number of payments, and total of payments. They must match the deal you agreed to.
  • Watch for add-ons you didn't ask for: warranties, GAP, paint protection. They're optional. Have them removed.
  • Never sign with blanks, and don't take the car home until the loan is final — not "conditional."

The retail installment sales contract

At a dealership, the car purchase and the loan usually live in one contract. It lists the price, your down payment and trade-in, every fee and add-on, and the loan terms. Before you sign, match it line by line against the out-the-door price you agreed to. Anything you didn't agree to comes out.

The cost disclosure

Federal law requires the contract to show the loan's cost in a standard box: the APR, the finance charge (total interest and fees in dollars), the amount financed, and the total of payments. Compare the APR against the pre-approval you brought from your bank or credit union. If the dealer's number is higher, ask why.

The used-car window sticker (Buyers Guide)

Every used car at a dealer must have this sticker. If it says "As is — no dealer warranty," that means repairs are your problem the moment you drive off. Keep the sticker; it's part of your contract.

Add-on contracts (the ones to slow down on)

GAP coverage pays the difference between what you owe and what insurance pays if the car is totaled. Optional — and your own insurance company may sell it for less. Extended warranties and service contracts are optional too, and can repeat coverage you already have. If you're told any add-on is "required for the loan," ask them to show you where the contract says so.

Title and registration papers

The dealer usually files these and you drive on temporary tags until the real ones come. Buying from a private person? The title transfer at the DMV is your job, usually with a deadline.

One more time, because it matters: don't leave until the loan is final. A "conditional" loan lets the dealer call next week and demand worse terms. Final loan, signed papers, then keys. Full guide: Buying a car, start to finish →
Sources to cite before publish: CFPB (finalizing an auto loan; yo-yo financing; GAP; negotiable items), FTC (Buyers Guide; add-ons).