What Information Should a Car Dealer Give You Before You Sign?

Buying a car usually starts with excitement and ends with paperwork. Somewhere between the test drive and being shown how the sat nav works, you’re handed a stack of documents and a pen that always seems to run out just before the important bit.

It’s tempting to nod, sign, and think, I’ll read this properly later. But this is the point where some of the most important information should be explained clearly, and not just pointed at vaguely on a screen.

In the UK, car dealers are expected to give customers certain information before they sign a finance agreement. Knowing what that information is can help buyers slow things down just enough to make an informed decision.

The Big Picture: What Are You Actually Paying?

One of the first things a dealer should explain is the total cost of the car, not just the monthly figure that looks reassuring on a sales screen.

Monthly payments matter, of course, but they don’t tell the whole story. You should understand the cash price of the vehicle, how much you’re putting down as a deposit, and what you’ll pay in total over the life of the agreement. Seeing the full figure can sometimes be a moment of clarity, the kind that makes you sit a little straighter in the chair.

Interest Rates Without the Fog

Before signing, you should also be told how much interest you’re paying and what the APR actually is. APR reflects the overall cost of borrowing and can make a noticeable difference to the final amount paid, even when monthly payments seem similar.

If interest is mentioned quickly or glossed over, it’s reasonable to pause and ask how it affects the total cost. This isn’t being difficult, it’s understanding what you’re agreeing to.

What Type of Finance Is This, Exactly?

Car finance isn’t just “car finance”. Dealers should explain whether you’re being offered PCP, Hire Purchase, or leasing, and what that means in practical terms.

This matters because each option works differently. Some lead to ownership, some don’t. Some involve a large payment at the end, others don’t. A clear explanation helps avoid the surprise of discovering later that the car isn’t actually yours, or that keeping it involves a much larger payment than expected.

The Parts People Often Miss

Certain terms tend to be mentioned briefly or left for the paperwork, even though they can have a real impact later on. Things like mileage limits, early settlement terms, and charges for damage or excess wear are worth understanding upfront.

They’re not the most exciting details, but they can suddenly become very interesting when circumstances change, or when a car is handed back at the end of an agreement.

What Happens at the End?

If the agreement is a PCP, the dealer should clearly explain what happens when it finishes. That usually means outlining your options, including returning the car, paying a final balloon payment, or using any equity towards another vehicle.

This is especially important because the final payment can be significantly larger than the monthly ones. Knowing it’s coming is one thing; understanding it is another.

Commission and How Deals Are Arranged

In some cases, dealers receive commission for arranging finance. Where this applies, it should be explained clearly and transparently.

This doesn’t mean commission is wrong or unusual, it simply helps consumers understand how the deal is structured and whether the finance being offered is right for them.

Your Rights (Yes, You Have Them)

Before signing, you should also be told about your consumer rights, including whether a cooling-off period applies and how it works.

Knowing you have time to reconsider can take some of the pressure out of the decision. It’s information that’s useful to have before you need it, rather than after.

You’re Allowed to Ask Questions

Perhaps most importantly, you should be given time to ask questions and think things through. Buying a car shouldn’t feel like a race, even if the showroom is busy and the coffee has gone cold.

If something isn’t clear, asking for an explanation is entirely reasonable, and a good dealer should be happy to provide one.

Review Your Old Agreement

Sometimes, people only realise what they didn’t fully understand once the agreement is already in place. In those situations, reviewing the paperwork can help clarify what information was provided and how clearly it was explained.

Independent specialists such as Mis-Sold Expert help consumers understand car finance agreements and the information they were given at the time

If you believe you were mis-sold car finance, you can visit Mis-Sold Expert for more information.

Seeking specialist support is optional and depends on individual circumstances.

This article is for general information and is not a substitute for personal financial advice.

Read The Fineprint

Before signing a car finance agreement, you should be given more than just a pen and a place to sign. Clear explanations, transparent information, and time to think are all part of the process.

Taking a few extra minutes to understand what’s being offered can make the difference between driving away excited, and wondering later what you agreed to once the novelty wears off.

You can claim without using a claims management company; you can go to your finance provider and then to FOS, for free. Additionally, the FCA is introducing a free consumer redress scheme.