10 Steps to Buying a New Car
Step 8: Finishing the New Car Deal
Once you have struck the right price with the salesperson, you will be introduced to the F&I person. The “F&I” are financing and insurance. This person will help you finish the deal by guiding you through the paperwork. They will tell you what sales tax and fees will have to be paid in addition to the price of the car. Fees such as licensing and taxes are government fees that must be paid and are non-negotiable. Other fees -- such as service fees, prep fees, and advertising fees -- are negotiable at most dealerships. If the fee looks questionable, do not be afraid to refuse to pay it. If the dealer will not remove the fee from the contract and cannot prove to your satisfaction that the fee is required, it is time to get up and shop at a different dealership. If it comes to this point – and it rarely does -- you have to ask yourself if canceling the deal over a couple hundred dollars is worth it. Sometimes it is, but oftentimes it is not.
The F&I person will also be the one who submits your credit information to lenders if you have not lined up financing beforehand. They will likely be able to get you a financing deal that is better than you can get with your local bank, but it never hurts to shop around for financing.
Lastly, the F&I department may hit you with extras such as extended warranties, undercoating, and other services you may not want or need. If you feel an add-on offer is a good deal, go for it. However, in most cases you will want to bypass the add-ons. There are a couple of reasons for this. The first is that these dealer-supplied add-ons can usually be purchased after the sale if you should find yourself in need of them. The second reason is that when you are “on the spot” you do not have the appropriate time to compare prices and services. Many dealers will quickly gloss over the add-ons and will not pressure you into anything you do not want at this stage. Having a buyer walk out on a car they were ready to sign for because the F&I department pushed an unwanted extended warranty is not good business, and the dealer knows it.
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