I know someone who bought a new car 8 years ago and paid cash for it. Back then, after he and the salesperson came to an agreement for the price to be paid, he was taken into the "finance office"** where he wrote a check for the purchase price and had him sign a bunch of forms. One form, the very last one, was a finance agreement. He thought it was rather odd that if he paid cash for the car, why a finance agreement?
So about 6 years later, he started to wonder why his DMV Certificate of Title still had a lienholder listed. He should have noticed it and questioned it then but not many people do, I suppose. You've got the car and are not being hounded for payments so who is paying attention to a little thing like that? He took the Certificate to the DMV and got a new certificate that had no lienholders listed. He had never made any payments to the finance company...he paid cash after all. So, it was chalked up as some kind of snafu and didn't think much of it until he recently bought another new car...again with cash. Again, they had him sign a bunch of papers and the last one they had him sign was the finance agreement. This time he balked at having to sign it...why, when he was paying cash, should he sign a finance agreement? They said..."well you won't get the car without signing the agreement." So, thinking back that he didn't really have any finance company chasing him for payments, even though he paid cash the last time, that he'd go ahead and sign it again. This time instead of a normal check he gave them a cashiers check for the total amount of the price of the car plus all of the fees and taxes and drove the car away.
It has been several months and he still has not yet received the DMV Certificate of Title or tags and is anxiously awaiting to see if they will have a lienholder listed on the Certificate like last time. If they do, he will immediately take it to DMV to get it corrected and ask why this has happened.
He had done some checking on the internet and found that some new car dealers have been using the customers good credit to borrow money under their name but making payments to the credit company themselves so the buyer never receives a bill from the credit company. Some dealers have been caught when they missed making payments on time and collection agencies started hounding the buyers for the payments.
I think the reason why they save the finance agreement till the very last to sign is so that you get the feeling like you've already committed to buying the car through all of the other forms you signed and that you would have a legal fight if you refused to sign the finance agreement.
I think having to sign a finance agreement, if you are paying by cash, should be illegal on the part of the car dealer.
**The finance office is also where they try to hit you up for purchasing way more warranty and insurance that you will probably never need....especially if you already have a 10 year warranty on the drive train (hint, hint...without naming the car manufacturer). But there are so many electronics in the car that could easily fail that maybe extra insurance isn't a bad idea. My friend said that some of the things that have already ticked him off about the car is the GPS system sometimes won't start when you try to select the agreement that displays on the screen. Another time he took the car to a car wash and the electronic door locks wouldn't work right...it eventually worked after whatever got wet dried out. Intermittent problems like that can be a real son-of-a-gun to get fixed.
I think another reason for the finance agreement was so that it would be easier for the dealer to snoop into your credit report...but then...I don't think it is too hard for many people to snoop into someone's credit history anyway nowadays. Everyone, including dealers are selling your personal credit information to anyone who would pay for them which is part of the reason why one gets so many pesky phone calls and email and snail mail and people knocking on the door trying to scam you out of your money.