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Car Purchase Agreement
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What Is a Car Purchase Agreement?
A car purchase agreement acts as a binding contract. It’s a document that seals a car’s dealership when signed. It’s a sale agreement between a dealer and a buyer that details all the information regarding the vehicle purchase. Every matter regarding your purchase must be clear to you to prevent future complications.
According to Statista, globally, the United States is the second-largest auto market with a record of 17.2 million new light-vehicle registrations in 2018. From 2017 to 2019, there are 279 million active vehicles in operation all over the country; the same research firm states. It is also revealed that this is approximately 85% of the country’s population of 329 million people, according to theUnited States Census Bureau.
What To Look for in a Car Purchase Agreement?
When you go shopping for something, you stroll the mall, spend hours looking for a cute dress or a Michael Jordan kicks, call a salesperson and settle the transaction with a swipe or a quick look at your wallet to make sure that the price just leaves you enough for gas or a bus ride. Purchasing a car isn’t as easy as that. It comes with an enormous liability and a binding promise to make it easy for every party involved.
A car purchase agreement might look like it’s not easy to comprehend, but it is, once you know what the essential parts are. If you’re going over your documents here’s the part of the agreement that you should look for to understand all the items better:
Sale and Pricing
This where most, if not all, dollar signs are found. It is, without a doubt, a crucial part of any buy-sell agreement. This where you’ll find the amount of your purchase, additional fees for the inclusions, and your sales tax. Anything that concerns your sales price is found in this part.
Auto financing or borrowing money to purchase a car is a typical scene, but it takes a special spot on your document. If you’re financing your purchase, this section is vital for you. This will include your down payment or deposit, loan interest, payment duration and monthly installment, and your trade-in value.
This looks a lot less intimidating than the other two, but the absence of dollar signs doesn’t make it less. This will include basic details such as the buyer’s name, address, date of birth, and other significant identification numbers.
What To Review When Signing Your Car Purchase Agreement
An incident in 2013 served as a lesson for people to thread car dealership carefully. According to the investigation, Saratoga Springs, LLC, charged its customers with $5,000 without their consent from May 2010 to September 2013. They were asked to pay their 119 deceived client for restitution that cost them $102,000. There are multiple factors to consider as well as some things to check on your agreement to ensure that you’re signing up for something that you’re aware of. Here are some things to check when reading your agreement:
Car Purchase Documents
Before you tiptoe your way to a car dealer’s office and purchase your own vehicle, do you know what documents you’ll be reading and receiving aside from the receipt and a signed check? Any significant purchase requires the right documentation, and a new car purchase is among them. Here are some documents you should know about:
Bill of Sale
A bill of sale is essentially a sales contract. This is an important document to present when registering your car and getting a license plate. Everything you’ve discussed with a dealer should be written on the bill of sale.
Mileage Disclosure Form
The mileage disclosure form contains both the buyer and the seller’s information, the car’s details, and the mileage. This is an important document when you decide to sell the car.
This defines the legality of your car ownership. The application for a certificate is made within the purchase. Your application will submit your application, and your title will reach your doorstep if you paid the full amount. However, the title can serve as your dealer’s leverage, as stipulated in your contract, if financed the car. You have to make the necessary payment before the company releases the title to you.
Retail Installment Contract
This is an agreement used for both new and used cars when they’re being financed, a written requirement in Georgia law.
A buyer’s guide is specific only to the purchase of used cars, and a legal requirement for selling second-hand vehicles. It contains all information regarding the unit on whether or not some parts have been replaced, the unit is still under warranty, and if there are underlying mechanical problems that the buyer should know about. This also contains the dealer’s basic information in case of complaints.
How to Make a Car Purchase Agreement
You need to ensure that both parties have equal rights and privileges and that no one is put at a disadvantageous spot. Buying a car might a teen’s coming of age present or an average man’s personal milestone after many years. To some, it’s a status of status and success. To many, it’s a need and a convenience. Don’t let a faulty agreement ruin that. Writing any type of dealer agreement requires is a crucial part of any transaction. When you draft a car purchase agreement, take note of the following:
Step 1: Appropriately Name All the Parties
In any agreement, paying attention to how the names of the parties are being presented in the document is important. All the names and addresses of both the dealer and the customer should be stipulated in the contract in complete detail. This is not only to ensure that both parties are correctly identified on the paper, but this will also serve as a contact when it’s necessary to look for that certain person in the future, even though it’s apparent that this person’s details are already written on a form.
Step 2: Set the Terms in Details
An agreement is never without its corresponding terms. And when you begin to lay them all out, be sure to get rid of any ambiguity or generic remarks. Everything should be written in detailed and specific statements to put off any confusion or misunderstanding. Specify all amounts, dates, and warranty information, among others. If the car on sale is a second-hand model, there should be details on the transfer of ownership. There might be instances that your state law requires both the new and the former owner to appear together to finalize the sale. These are all precautionary measures to prevent any future complications.
Step 3: Ensure an Accurate Car Description
You must include a complete and detailed account of the car’s description of your buy and sell agreement. And it’s not only the model and the physical description of the vehicle, but it should also include the mileage, year of release, and the vehicle identification number (VIN). You should also include details if a car has any history of repair because it should have not only the descriptive aspect of the product but also the condition.
Step 4: Don’t Forget the Disclosure Clause
The disclosure clause in an auto purchase contract is for the seller or the sales dealer to inform the buyer that the car is in stellar condition and that the vehicle has no underlying defects that might compromise the buyer’s safety. This is an important issue for used car purchases, but the brand new ones are no exception as well. The agent or the seller must confirm that he or she has already disclosed all technical information regarding the vehicle and that nothing has been hidden from the buyer. This can pose a great issue later on when there’s damage is discovered and that the former vehicle owners have something to do with it, but they refused to divulge such important information.
Are the bill of sale and the purchase agreement the same?
The purchase is given as an intention to make a sale. It contains all the information regarding the purchase, including the amount, the quality and quantity of the unit, and other important information regarding the transaction. On the other hand, a bill of sale is given after the purchase as a testament that the buyer already owns the item and has already claimed ownership of the unit.
Do you need a contract for a personal car sale?
If you’re personally selling a car, yes, there’s still a need to provide a contract to ensure that you and the buyer both understand and agree to the terms of the purchase. You would also need to provide the takeover documents that come with the sale.
What is the 10-day rule?
The 10-day rule is the period where a seller can cancel the contract for a financed car. This means that a seller can take back the vehicle within ten days after the contract was signed. The seller must return everything that the buyer gave them, including the down payment.
If only car shopping is as easy (and as cheap) as a day in Walmart, there would not need to do a foolproof transaction. Buying a car not only requires you to have the right amount or a good credit point, but it also demands responsibility. Understanding your car purchase agreement will help you get past your excitement for a new ride and help you focus on matters that are relevant when getting one. With the right terms and a firm handshake, you won’t only be getting a new sedan but a beneficial agreement as well.