What is included in the term “good faith estimate” in transactions?

The term "good faith estimate" in the context of vehicle transactions refers specifically to an estimate of costs associated with the sale, including taxes and fees. This term is commonly used to ensure that buyers are aware of all potential costs involved in a vehicle purchase upfront, thus promoting transparency and fostering trust in the dealership's practices.

By providing this estimate, dealerships help consumers make informed choices about their purchases, setting expectations on the total cost they might incur. This includes sales taxes, registration fees, dealer documentation fees, and other administrative costs that can affect the overall price of the vehicle.

While estimates of vehicle repair costs, financing interest rates, and insurance premiums can be important in the car buying process, they are not included in the "good faith estimate" in the same regulatory context. The focus of the good faith estimate is strictly on costs directly tied to the transaction of sales, thus ensuring clarity and satisfaction for the buyer at the outset.