Selling or buying a car/vehicle? Then make sure to prepare a vehicle purchase agreement in order to legalize the sale. A vehicle purchase agreement is one of the most important documents that comes in handy when it comes to document the car sale transaction. This document is a legal binding contract that save the rights of both seller and buyer. So if you are selling a car or buying one then make sure to pay attention to the vehicle purchase agreement.
If you have a limited knowledge of purchase agreement then no worries, we got you covered. A lot of important information related to the vehicle purchase agreement is shared in this post and we have provided the free templates as well. So let’s get started.
What Is a Vehicle Purchase Agreement?
A vehicle purchase agreement is also know as motor vehicle bill or sale or car sale contract. It’s a legal document that is prepared to record the sale transaction between the buyer and the seller. All the important details related to vehicle such as price, condition, vehicle details, payment terms, payment method, terms and conditions, etc are mentioned in this agreement.
It is important to have a purchase agreement in place to legalize the sale transaction and to protect the legal rights of both the buyer and the seller. This type of written agreement comes in handy when it comes to tackle the misunderstandings and disputes after the sale.
No matter whether you’re selling a car or buying one, make sure to have a proper purchase agreement in place to record and confirm the details of the sale. It’s easier to create a purchase agreement for car, check out the templates below and download a suitable one for your use.
Vehicle Purchase Agreement Template
Why Is a Vehicle Purchase Agreement Important?
There are numerous reasons why a vehicle purchase agreement is important and some of them are listed below:
- The biggest reasons of having a vehicle purcahse agreement is the “Legal Protection”. This document legally binds both the seller and buyer in order to avoid the potential fraud or misrepresentation.
- The transfer of ownership becomes clear and smooth once a purchase agreement is there. This agreement helps in the process of ownership transfer, registration, and insurance purposes.
- This agreement highlights the details of vehicle, sale price, payment term, payment methods, etc which avoids any confusion related to the agreed price and payment schedule.
- There is a “Liability Protection” once this agreement is prepared. By documenting the transaction, the seller is no longer responsible for liabilities related to the vehicle after the sale.
- It is important to have a vehicle purchase agreement for both seller and a buyer. It protects the legal rights of both the parties.
What’s Included in a Vehicle Purchase Agreement
As a seller and buyer, you must be aware of the different elements of a vehicle purchase agreement. Do not sign the agreement before reading and understanding it well. Following are some of the elements that you may find in this agreement:
1. This agreement contains the names and contact information of both buyer and seller. Make sure the details are filled up correctly.
2. Vehicle details should be there such as Make, model, and year of manufacture, Vehicle Identification Number (VIN), Mileage, License plate number, etc.
3. Make sure to specify the “Purchase Price and Payment Terms”. The payment method should be clearly mentioned there, mention the down payment amount (if applicable), Installment plan details (if any), Taxes, fees, and additional costs.
4. The “Condition of the Vehicle” should be clearly stated. Make sure to give a disclosure of any known defects or damages
5. The Date and location of the vehicle handover should be mentioned.
6. There has to be a statement regarding the “Liability Protection” i.e. the seller is no longer responsible for the vehicle after the sale.
7. Both the parties i.e. seller and buyer should read the agreement properly and sign it, if agreed.
In many places, it’s important to have a Witness or notary public signature.
Tips for Creating a Solid Vehicle Purchase Agreement
Here are a quick tips to help you out in creating a solid Vehicle Purchase Agreement with ease.
- Make sure to clearly define all terms and conditions. Both the parties should make aware of their responsibilities.
- All the payment and prices should be clearly written i.e. the total price, any down payment, taxes, additional fees, etc.
- Make sure to cross check and verify the vehicle details i.e. VIN, mileage, and condition of the vehicle before signing the agreement.
- The state of the vehicle condition should be accurately described.
- Get a legal advice or hire a legal professional if you are not able to understand the financial elements involved.
Common Mistakes to Avoid
Mistakes can happen, but there is no room for mistakes when it comes to legal documents. Mistakes in a vehicle purchase agreement may lead to disputes or legal complications, therefore, make sure to be aware of the mistakes that can happen and correct them.
1. Incomplete Information
Incorrect or incomplete information often leads to misunderstandings and legal complication, so avoid it.
2. Failing to Disclose Defects
As a seller, you must disclose any known defects or issues. Failure to do so can result in legal action from the buyer.
3. Not Including Payment Terms
A buyer should know when and how to pay. There cannot be any mistakes when it comes to convey the payment terms and conditions.
4. Forgetting to Transfer the Title
The ownership of the vehicle should be transferred legally. Buyer should register the vehicle in their name immediately after the sale.
5. Not Getting Signatures
An agreement is just a piece of paper if there are no Signatures. The Signatures of both the buyer and seller should be there to legalize the document.
Conclusion
If you are selling or buying a car or any vehicle then educate yourself about the vehicle purchase agreement in order to protect your legal rights. A vehicle purchase agreement is prepared whenever there is a sale or purchase of a vehicle. It includes all the important details related to the purchase such as condition of vehicle, selling price, payment terms, etc. Preparing a vehicle purchase agreement is easy once you have a template with you. Download and print the template from here and make a purchase agreement.