7+ Auto Sales Contract Templates

Consumers and people, in general, are guilty of signing documents without reading and understanding them first. However, once it is a contract that you sign, you’re already legally bounded to commit to the terms and conditions you have agreed to. This is especially important to remember when it’s a contract for a vehicle sales or purchase, regardless if it’s a new or used car. You may also see Contract Templates.

Elements of a Good Auto Sales Contract

It is easy to be overwhelmed and excited about your purchase and just goes along with what the salesperson tells you, but you need to pay attention to what you are signing and are being legally held to otherwise, you’ll be dragged into costly disputes and a court appearance in a worst-case scenario. Here are the most important elements you have to look for or include in an auto sales contract:

1. Description: To establish the validity of the contract, indicate the buyer and seller’s name, especially and the description of the item. Be specific in identifying the car, the year it was purchased if it’s a used car, the make, and model and the Vehicle Identification Number or VIN. The description is oftentimes the most important part of a sales contract since there’s a lot of room for error when writing it. Make sure that it identifies the exact vehicle the buyer wants to get including relevant details such as:

  • Type and model
  • Model number
  • Weight
  • Color
  • Size

This will ensure that the seller delivers the correct vehicle. Issues with the other terms in the contract usually get easily resolved as long as the buyer is getting his money’s worth.

2. Delivery Instructions: Late and wrong deliveries are also what a makes a transaction fail easily. You, therefore, have to state delivery details clearly such as the date, time and address, including which party has to answer for the risk of, loss or damage of the vehicle while in transit.

3. Pricing and Fees: This is the part where you have to list the vehicle’s overall selling price. Make sure that you are specifying that in exchange for the consideration amount as the seller, you’re releasing the title of the car to the one buying it. You also have to submit all relevant and legal documents for the title transfer to the buyer. You can break down the details into the following:

  • Vehicle sales price
  • Price of each added option, listed separately
  • Possible added fees
  • Sales tax

4. Payment Details: Naturally, the total price of the vehicle sale is very important but there are other payment details you shouldn’t forget to indicate. Will the car or be paid by installments or in one lump sum? Are you requiring a specific mode of payment? In cases where you agree that the buyer won’t be paying the whole amount right away, it is common for both parties to release a promissory note outlining the repayment terms in detail. Among other things, this gives the seller a chance to ask or charge interest and spell out a repayment schedule.

7+ Auto Sales Contract Templates

Simple Auto Sales Contract Template

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Auto Sales Contract Template

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Used Car Sales Contract Template

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Vehicle Lease Agreement Template

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Agreement for the sale of a motor vehicle

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Used Car Sale Agreement

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Size: 12KB

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Vehicle Sale Agreement

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Size: 93KB

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Vehicle Sales Agreement

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Steps to Write an Auto Sales Contract

Whether you’re in a dealership selling automobiles as its primary source of profit or you are buying and selling a business vehicle, a sales contract should outline the details of the transaction. Buying a car can be a very tricky proposition especially if you’re not getting it from a dealer, so here are the steps to make sure your sales contract is complete:

1. Identify the parties: Write the names of both parties at the beginning of the contract, establishing that you’re both agreeing to a contract selling a specific vehicle. Make sure to use full names, with the correct spelling and addresses so that you can find the person easily when it’s necessary.

2. State the contract basics: Also known as the bill of sale, an auto sales contract should have certain elements to make it valid and legally binding. The law in most states requires contracts to have an agreement and consideration. The agreement section is simply the vehicle’s information such as color, make, model and mileage, including the buyer and the seller’s information such as names and addresses.

3. Outline the terms properly: Write down the payment terms and include the full amount, any deposit made, payment dates and the mode of payments agreed by both parties. If you’re handing out a deposit or down payment for the vehicle, always ask for a receipt from the seller. There are some dealers or sellers that can only accept cash so make sure you ask for their preferred payment method before agreeing to the contract. It’s better if you can try making payments via check or deposit since this allows you to have a paper trail.

4. Warranties and guarantee: Include any warranty information or guarantees, or make a note that the car is being sold “as is.” Detail the process for your transfer title in the contract. Some states require both parties to appear before a notary. Other states can simply have them sign the title or pink slip over to the buyer. If you’re not sure how this works, ask a lawyer or an expert to guide you through the process.

5. Add a disclosure clause: The disclosure clause ensures that you’re getting what you’re bargaining for. This is where the seller confirms any damage or mechanical problems about the vehicle that he is aware of. Ask him to confirm that he isn’t aware of any claims or liens claims against the vehicle and take note of any engine issues, problems with horsepower, electronic systems, etc. Just to be on the safe side, make use of any online service to make a vehicle report or inspection before your purchase to learn more about the vehicle’s ownership, past repairs, damage, and financial history. It might reveal some important information regarding the vehicle’s condition or history that the current owner or seller has no knowledge of.

Tips In Writing An Auto Sales Contract

When the time comes for addressing loopholes or issues that weren’t discussed during or before the sale, a simple handshake just isn’t going to cut it, so you have to make sure that your auto sales contract is as detailed and as complete as possible. Add as much information as you think necessary for protecting yourself from blatant miscommunications and dishonest sellers. Let these two tips guide you further in your purchase:

  • Sign the contract: Write the words  “Seller”, “Buyer”, and “Witness” at the bottom of the document where everybody should sign. Each party should have their own witness, including spaces where the buyer and seller can indicate their driver license numbers and the date. Add a statement that the information each party has entered and provided is true and notarize the contract after putting your signatures for further protection.
  • Add any other important provision: Make sure to indicate that the contract will end and both parties will owe nothing else to each other—no commitments, no covenants, no promises or otherwise, once the sale has been completed and add a provision for returns as well. For specific guidance about whether a car sales contract’s terms are legal or favorable to you, consider calling an experienced contracts attorney near you.

Auto Sales Contract FAQs

What is an odometer reading?

You have to find out first if your state requires an odometer reading as part of the vehicle sale agreement. There’s a form of fraud tampering or falsifying the reading on a milometer/odometer and presenting the incorrect number of miles/kilometers traveled to a prospective buyer and is often referred to as “Busting miles” in the United States. Make sure that you get a statement certifying the exact odometer reading at the time of sale.

How do I further enforce the validity of my auto sale contract?

The contract must state the details of any warranty provided. If there is o warranty, it has to state that the vehicle is being sold “as is.” You also have to make a list of any repercussions, consideration for breach of contract. For instance, no “three-day rule” allows auto-buyers to get out of a contract within three days of purchase.

Drafting a legit and fully enforceable auto sale contract may seem like a challenging task because of the legality it involves, but it’s actually more doable than you’d think as long as you research what it requires and ask the right people if you’re unsure of how it should be written. Once you sign the contract, you and your business as well as the other party, are legally bound to honor it.