Car Purchase Agreement

Many private car purchases happen on a handshake. While this is a fast and convenient way to finalize things quickly, in 75% of all cases it results in a court dispute. Here are the most common problems that a written agreement prevents:

• Price dispute after handover. The buyer may claim that you agreed on a lower price or to paying in installments. Without anything in writing, it’s your word against theirs.
• “Hidden defect” claims. The buyer returns weeks later, saying the car had a fault you knew about. A signed agreement with a clear “sold as seen” clause protects you as the seller.
• Payment default. The buyer takes the car and stops making installments. Without a written payment schedule and default clause, enforcing payment is extremely difficult. Moreover, it is always harder to prove what was the initial payment arrangement and schedule between the parties.
• Fraud protection. A buyer with no written agreement can claim they never purchased the vehicle. A signed document with VIN and odometer details removes any ambiguity.

The present vehicle purchase agreement template contains the following mandatory terms:

• Buyer and Seller Details: Full details of the buyer and seller should be included in the text of a document. It is also recommended to include contact details like a phone number or email address to make sure parties may contact each other once there is any default in the future.
• Vehicle Details: Along with a detailed description of a vehicle to be sold, a unique Vehicle Identification Number (VIN) should also be included in the document. Always make sure that the vehicle identification number matches with a vehicle’s engine number.
• Odometer Details: The accurate odometer details should be included in the automobile purchase agreement. Be aware that altering odometer details is a federal crime. Once you suspect that the odometer does not reflect the true mileage, do not hesitate to report this to the National Highway Traffic Administration.
• Purchase Price and Payment Terms: Every purchase agreement for a car or other motor vehicle should address the payment terms. Should the purchase price be paid in whole on a specific date, or should it be paid in installments? If paid in installments, should it be quarterly, weekly, or monthly payments? All those details should be clarified directly in the document.
• Hidden Defects: When it comes to a vehicle purchase contract for a pre-used car, some technical hidden defects can arise in the future. In that case, buyer and seller should decide together how and if those defects will be compensated by a seller. If there are certain defects that a seller clearly communicated to a buyer prior to a car purchase contract being signed, those defects cannot be considered hidden defects. If a buyer subsequently signs a purchase contract, in that case it means that a buyer accepts those defects.
• Delivery of Vehicle: Parties need to set up a due date on which a vehicle will be delivered into the physical possession of a buyer. It could be a date of signing a car purchase agreement between the parties, a date of making a full payment, or any other date in the future. It is also essential to agree upon the place of a car delivery—buyer’s address, seller’s address, or any other pick-up location.
• Transfer of Ownership: A contract for the purchase of a vehicle should include a date on which a buyer becomes the new owner of a vehicle. It could be a date of signing the purchase agreement of the vehicle, the date when a full payment is made, or any other date agreed upon by the parties.

Despite having a template or drafting your own one from scratch, it is always advisable to double-check it with your attorney.

This is one of the most popular questions people ask themselves when it comes to buying a car or selling the old one. You can always get a customized motor vehicle purchase agreement template from FasterDraft, which saves a lot of your time. By customizing this template with FasterDraft, you get the following benefits:

• a state-specific document that is ready in minutes;
• instant digital download after the purchase;
• life-time free license to use and edit the document;
• a template created by real lawyers and never by AI;
• a bespoke legal template for a low one-time fee.

A car purchase agreement is a contract used to sell a vehicle from one party to another in exchange for a price or other remuneration. This is a simple transaction aimed at transferring ownership of a car or other type of vehicle.

A vehicle purchase agreement could be concluded between individuals or business entities. A seller under a car purchase agreement should be a legal owner of a car. It is also a possible scenario when a seller’s attorney acts on behalf of a seller by virtue of a power of attorney.

Once a purchase agreement is signed by both parties, it should remain in full force until the parties perform their mutual obligations. For a buyer it means to pay a full purchase price, and for a seller to transfer title ownership for a purchased vehicle to a buyer.

When a car purchase takes place in Louisiana, Maryland, Wyoming, Nebraska, or West Virginia, the presence of a notary is mandatory. Therefore, a Vehicle Purchase Agreement becomes valid upon notarization of the document’s last page.

Before entering into a motor vehicle purchase agreement for a pre-owned car, you need to investigate the vehicle’s history thoroughly in order to make an informed choice.

• Third Parties’ Rights: Before signing a car purchase agreement, check first if there are any third parties’ rights over a car or a vehicle. This party’s rights might include an existing car bank loan or vehicle lease agreement.
• Know the Owner: Before entering into an auto purchase agreement, make sure you deal with a real owner. Do not hesitate to ask a seller to present a registration document like proof of car title or pink slip.
• Technical Inspection: Do not hesitate to hire a professional in order to inspect a vehicle’s engine and other parts to make sure everything runs smoothly. Even if you purchase a pre-used car, excess wear and tear might be a good sign to think twice.
• Vehicle’s History: Check in advance how a vehicle has been used in the past. Is there any record of car accidents, street racing, etc.? All this information can give you a better picture of a vehicle’s condition.

If you need a legal document to confirm the fact of transfer of legal ownership (title) for a vehicle from the seller to the buyer, use a bill of sale template instead. Unlike the car purchase agreement that defines conditions of the future purchase, the bill of sale is the document that finalize the transaction.

A key feature of vehicle purchase agreement is that title ownership over a vehicle is transferred permanently. This makes it different from a vehicle lease agreement, where one party gets the right of the vehicle’s temporary usage and possession.

Parties involved in a Vehicle Purchase Agreement are called buyer and seller. In Vehicle Lease Agreement parties are called lessor and lessee. A lessor could be an individual or business entity who intends to temporarily transfer usage and possession of a car or other vehicle for a specified period of time. In its turn, under a Vehicle Lease Agreement, a lessee undertakes to make regular payments for getting a car into a lease.

The possession and usage of a vehicle under the Vehicle Lease Agreement are determined. The term of the lease can last from a few days to a few years. Apart from regular lease payments, a lessee receives a set of additional responsibilities, including

• Maintain the vehicle in good condition. If a lessee fails to maintain good condition, a lease agreement could be terminated immediately.
• Do not be engaged in activities like car racing, tax, and similar.
• For excess wear and tear of a vehicle during the lease period, a lessee agrees to pay an additional price on top.

Please note that the available Vehicle Purchase Agreement Template on this page cannot be used for a vehicle lease. Please access the vehicle lease purchase agreement form instead.

Our Vehicle Purchase Agreement template could be helpful in various circumstances:

• Types of Vehicles: When selling various types of vehicles, including bikes, trucks, cars, boats, etc. A document’s template could be used for the purchase of both brand-new and pre-owned vehicles.
• Payment Model: when making either a one-off or regular payment for a car purchase. Our Vehicle Purchase Agreement Template allows you to choose various payment methods for completing the transaction.
• Suitable for all 50 states: despite the geographical location of the buyer and seller, our Vehicle Purchase Agreement Form allows you to automatically adjust provisions of the final document depending on the selected state. Since local legislation may differ from state to state, rest assured that the final template will accommodate all necessary changes to deliver a legally binding document.

After you answer all questions in the questionnaire, you can download the Vehicle Purchase Agreement PDF or Word version. After printing out the document, the following formalities should be done: