When it comes to your car contract, the devil is in the details

As dealers try to boost profits on each car they sell — because current demand far outweighs supply — many are padding contracts with extra fees and products without telling the buyer. This means it’s more important than ever to carefully review the sales contract before you sign it.

“We are seeing a record level of fees across the board,” says Jesse Toprak, chief analyst for Autonomy, an electric car subscription service. In fact, while buying a car for his wife, Toprak, a former auto finance manager, discovered the dealer had added a $1,995 “dealer prep fee” to his contract.

Catching such hidden extras — and even honest mistakes — before you sign the sales contract is key because once it's signed, you're legally bound to the terms. There are no easy after-the-fact remedies if you see that the purchase price, interest rate, trade-in value and extras are not what you assumed.

Pay attention to the details

Oren Weintraub, president of car-buying concierge service Authority Auto in Tarzana, California, said that when he reviews contracts for his clients, he finds problems and mistakes about 30% of the time.

Some are unintentional. For example, a car’s vehicle identification number, or VIN, is 17 digits long. A dealer could accidentally switch VINs because there are two of the same color cars on the lot.

An innocent mistake? Maybe. But if you get the one car that doesn't have all the bells and whistles listed according to the VIN, you’ve lost out.

Watch out for other common mistakes, like the incorrect number of miles allotted in your lease. While these errors can be corrected, they can also cause unnecessary stress.

Then there are what Weintraub calls “sleight of hand” mistakes, which — not surprisingly — are usually in the dealer’s favor. These mistakes can range from listing the wrong residual value on a leased car to drastically inflating the documentation fee, which is simply the cost of filling out the paperwork. This fee can be as high as $900 in states like Florida, and is pure profit for the dealership.

Know what fees are legit

To prevent such “mistakes'' when you’re buying a car, it's best to know what fees are legitimate and all the other costs ahead of time. As Toprak points out, “You don’t want any unpleasant surprises at the dealership.”

Normally, when you buy a car, you pay for four basic things:

• The agreed-upon sales price of the car.
• Your state’s sales tax.
• Registration cost charged by the state.
• A documentation fee.

But if you finance through the dealership, and have a trade-in, the deal becomes more complicated. And instead of a dozen forms in a simple purchase deal, you could be signing nearly 20 different documents, Toprak says.

The sales contract has many different boxes with items that can be added. And that’s where things get confusing. A dealer can add extra fees and give them an official sounding name such as “dealer prep” or “market adjustment.”

Do your research

In today’s tight car market, consumers have little leverage, Toprak says. So you probably won’t be able to get such additional fees removed. Instead, find which dealership has the least amount of these inflated charges.

If there are outrageous fees or additions in this breakdown, ask to have them removed. In all likelihood, the dealer will refuse. So you can either pay the fees or shop for a better deal at another car lot.

Don’t let yourself be pressured.

The finance manager will probably try to sell extras such as an extended warranty. A simple way to decline is just to say you aren’t planning to keep the car past the expiration of the bumper-to-bumper warranty.