- 1 What is a car sale contract?
- 2 The elements to include in a car sale contract:
- 3 Important things to consider before signing a car sale contract:
- 4 Writing a car sale contract:
You need a car sale contract template while buying a car from the seller. This contract contains relevant details about the car and the terms of the sale between you and the buyer. This document serves as evidence of the exchange of ownership.
What is a car sale contract?
A car sale contract is an agreement for the sale and purchase of the car that contains the purchase and sale terms agreed upon by the buyer and seller. When both parties affix their signatures on the agreement then it becomes a binding agreement between them and acts as legal evidence of the transaction.
The elements to include in a car sale contract:
This document is considered the simplest form of a sale contract. This contract is mainly used in private party sales and involves full payment upon purchase. It includes the following information;
- The seller’s complete name and address
- The buyer’s complete name and address
- The vehicle’s details like the make, model, year and color
- Vehicle Information Number (VIN)
- At the time of sale, the mileage on the odometer
- The selling date
- The purchasing price
- The seller and the buyer signatures
Furthermore, those agreements are more complex created for purchases that made with dealerships. The dealership requires many documents and if you were purchasing a car for the first time then you may feel overwhelmed and possibly discouraged. The information you supply this agreement also vary. It consists of the following three sections;
The buyer’s information
In this section, as a buyer, you have to provide your personal information just like you provided in your driver’s license. In case, you are a co-signer or co-owner for the vehicle then you also have to provide details on that person needs in the contract. You have to include the following details here;
- As a buyer, your complete name
- Your complete address
- Your date of birth
- Your Social Security Number (SSN)
The Sale and Pricing information
Here, the overall sales price will be included which consists of the following;
- The vehicle sales price
- The amount of every added option
- All fees including documentation fee, destination fee, advertising fee, dealership fee, and registration fee.
- Your sales tax amount
The financing information
All the relevant financing will be explained in this parts consist of the following;
- Your vehicle total purchase price
- The value of your trade-in
- Your loan interest rate
- Your payment period term or length
- The down payment amount
Thus, you should keep all these components in your mind while making a car sale contract. As a buyer, you should be aware of the requirements before buying a car. You should also make sure that all the information you mentioned in your contract is accurate.
Important things to consider before signing a car sale contract:
Here are some important things that you should consider before signing this contract;
- Again, you as a buyer have to provide accurate information.
- To increase the profits, the businesses always add unscrupulous and questionable fees and this also applies to car dealerships. You should review all the tabulated fees and ask questions in case you don’t understand them. Don’t sign the contract in case you don’t satisfy explanation of the fees.
- The buyers often receive free items or services as an incentive from the dealerships. You should make a list of all of them and make sure that they are included in your contract. These incentives carry zero amount.
- An offer of great interest rates on financing is another incentive for the buyer in buying car. In case, you can’t find it in the contract then ask question about it and have it modified before the contract is signed.
- The amount that you have paid as a down payment in the car sale contract.
- The trade-in value mentioned in the contract must similar to the offer made by the salesman. If the dealership is engaged in some not desirable practices then the buyer has no obligation to sign the contract.
It is important for the buyer to know every aspect of the contract before affixing their signature. The data that you have entered into the contract check it thoroughly.
Writing a car sale contract:
Here are the steps to follow for writing a car sale contract;
Determining the parties
Firstly, place the official date of the agreement at the top of the page. Then below it, provide the complete legal names of the seller and the buyer and their current mailing addresses. Also, specify that this document is a car sale contract.
Describe the car
In order to avoid misinterpretation, describe the car as best as you can. Specify the following characteristics of the car;
- Interior color
- Body type
- Odometer reading
Mention the purchase terms
In this section, write down the agreed-upon purchase price, payment method, and date of sale. If purchase price includes any taxes then also mention them.
Explain a delivery method
If the seller and the buyer don’t live in the same locale then state the method which is used to deliver the car. The options delivery by driver, pick up by buyer, and shipping can be considered. Also, state any applicable delivery fees and who is responsible to pay them.
Explain the condition of sale
You should clearly mention in the contract whether the car is being sold with a warranty or as-is. The private sellers usually prefer the as-is option to protect themselves from liability in case car faces an issue.
The relevant documents
The documents that the sellers given to the buyer at the completion of sale, mention them.
Sign the contract
When both parties are satisfied from the terms of the contract then they have to affix their signatures and date the contract. Make a copy of the contract and keep one for your and give another to the buyer.