Dealer Tricks: Single Document Rule

single document ruleAccording to the requirements of the Automobile Sales Finance Act (AFSA) all obligations of both parties in a transaction must be contained according to the single document rule. This, basically explains the reason why purchase agreements are so long in the auto industry.

However, sometimes dealerships use fraudulent practices and ask customers to sign additional documents, including trade-in forms stating that the customer agrees to pay any difference between the value of their trade-in vehicle and the amount owed on that vehicle.

The other trick is when the dealership agrees to make payments on a trade-in vehicle but does not include the trade-in vehicle in the purchase agreement. The “hold check agreement” when the customer agrees to pay additional money towards the down payment on a later date is also a common practice. These documents violate the single document rule.