Since the COVID-19 induced pandemic struck the world and has limited outdoor gatherings and implemented the need for social distancing protocols, the leasing industries are among top industries that…continue reading
In response to the harsh reality of public systems that do not exactly favor the masses, we are motivated to save up to own even the cheapest car unit regardless if the model is outdated. For every car purchase transaction, there is a need to prepare a Car Sale Agreement to ensure the validation of the transaction and protection of the buyer and seller. In this article, we will be discussing what a buyer and even a potential car seller has to know about what a care sale agreement is and how one can compose it. With 7+ of our car sale agreements made downloadable and thus, accessible, you can draft one of your own simply by mimicking what you see in our samples! With no further ado, read more!
7+ Sample Car Sale Agreements
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Car Sale Agreement: Everything You Need to Know
A Car Sale Agreement that is sometimes referred to as a Car Sale Contract, falls under the general term of a purchase agreement. It functions more or less like a contract in the sense that what is stipulated in the agreement is generally what the contract is likely to contain except it will be final once the signatures are affixed. The parties involved in this agreement are the seller, who of course, is the one that is selling the car and the buyer who is the individual interested in purchasing the car.
A car sale agreement has to be prepared by a seller when a buyer wants to seal the deal and finally purchase the car. While complex in nature, the contract generally includes three essential sections that seeks the information about the buyer, the sales price of the vehicle and its accompanying fees and finally, details about its financing if it were the mode that the car will be purchased. This can detail the total amount of the vehicle including its fees and taxes and the amount agreed to serve as the down payment plus, the loan deal and for how long is its corresponding payment period.
Elements of a Car Sale Agreement
For every car purchase agreement, you have to make sure that you understand what you are essentially agreeing to commit to, otherwise consequences will befall you which mostly is more than what you bargained for. In this section of the article, we detail the elements inside a car sale agreement that you must pay attention to before you finally affix your signature and be legally bound to it. The essential elements are as follows:
1. Identify the Parties
The car sale agreement shall require to name the buyer and have them provide the common personal information asked from buyers like their full names, their complete and present address, their date of birth and social security numbers or government-issued identification.
2. Provide Complete Vehicle Information
The contract shall provide the necessary descriptions of the vehicle that are, as much as possible, specific so that it helps in the identification of the car.
3. Purchase Price and Financing Information
In summary, this details how much the buyer should pay for the vehicle including fees and taxes. Your contract should include how the car will be paid for especially if the buyer is not paying it in full and with cash but rather through loans. The contract should specify the kind of loan they applied for to purchase the vehicle, the total amount of the monthly payments and the length of the payment agreement period.
4. Responsibilities of the Buyer and the Seller
It is important that the contract comprehensively details what the parties are legally obliged to do and must provide to each other. This can detail the terms and conditions that should govern how the purchase will be executed.
5. Signatories of Parties
Lastly, an important element in all contracts are the signatures of the parties involved that proves that everyone has acknowledged the existence of the agreement and more so that everyone has read, understood, and agreed to what is stipulated in the contract.
Bill of Sale: What is it?
The Bill of Sale is more of a condensed version of a car sale contract that is at most, one page long and will only require the most essential information regarding the purchase transaction. It is a relatively simple document that is exclusively used by car owners who wish to sell their car to a private buyer as opposed to trading-in the car to a dealership. It is a legal document that proves the transfer of ownership of the vehicle from its previous owner to the new one.
Elements of a Bill of Sale
As a general rule, the bill of sale is drafted by the seller which the buyer must carefully inspect and understand once they are presented the document. In summary, a bill of sale includes the following information:
- Date of purchase
- Name of buyer and seller and their respective complete and present address
- Total amount paid for the transfer of ownership
- Vehicle description which can include the car’s color, make, model, body type, interior color, the vehicle identification number (VIN), odometer reading that displays the mileage limit, and any other unique characteristics that the vehicle possesses and will help in the identification of the property.
- Signatories of the seller, buyer and of a notary public.
Required Documents to Purchase a Car
Before even deciding on purchasing a car, you have to secure the necessary documents required by car sales agents if you were to buy a car from a dealership. In the Philippines, it is required that you secure the following seven documents to proceed with the car purchase regardless if you had the full cash to buy one but more so if you were to buy the car under a financing loan. While the following items are exclusive to the Philippines, they are more or less similar documents that everyone should acquire in order to successfully purchase a car.
The common types of payment documents required for successful car purchase are bank checks, pre-approved loan checks, cashier checks and personal checks. Payment documents vary and are most often dependent on how you plan to get the car, if it’s either through full payment or loan installments and will be dictated by the sales agent. Regardless, it’s best to secure the mentioned payment documents just in case. For second-hand car purchases, payment documents will depend on what the buyer and seller have agreed on.
In general, a driver’s license is not exactly required per se because anyone can buy a car for as long as they can afford to buy one, however, you’re most definitely required to have one in the long run. In the Philippines, it is mandatory to provide a driver’s license because it is generally understood that you are to buy a car with intentions of driving it. Even then, it is mandated by most car dealers that a buyer present a driver’s license as there are protocols that they must adhere to for documentation purposes. Students can firstly acquire a student driver’s license from their local Land Transportation Offices if they still do not have a driver’s license. Eligibility for a non-professional driver’s license will be bestowed after a month and if the government issued tests are passed.
Proof of Insurance
While insurance is not something you want to pay for for the sole reason that it’s an additional financial burden, it can be wise to avail of insurances especially when most car purchase processes would usually have insurance agents offering them very enticingly that it would be very hard to turn them down. However, don’t wait to be sales pitched as these aren’t usually done for your benefit but for an added profit for the insurance agent. Because you are already expecting to be offered these car insurance suggestions, it’s a smarter act to prepare yourself beforehand and do your own research to identify which car insurance is something that has a likelier probability of being useful and one that you can afford for a year or so which will have you thoroughly looking at your monthly household budgets. Tedious, much? Yes but it’s definitely worth it to go through these time-consuming processes if at the end of it is the car you’ve either always longed to have or the car that you know would help you get through daily tasks.
Anyways, there are a lot of car insurances to choose from because not all car insurances have the same coverage options. We list down three of them below:
It is important to keep in mind that car insurances exist mainly to protect you from financial hardships when your car gets into an accident. It also makes sure that covers the costs of the damages that happened, say, from the same accident that has rendered bodily injuries. In general, good car insurances primarily protect you from financially induced burdens which is what makes offers of car insurances something you cannot look away from.
A last tip to apply as you go through the best car insurance options is to not hesitate to ask away should you have any concerns regardless of how trivial or unimportant you feel it may be.
An important document that is important for a potential buyer to ask for is a copy of the car title as it is essentially a document that formally transfers legal ownership of the car from the previous owner to you. It also functions as proof that a sale was made so in a way, it resembles the purpose of a contract.
Because fraud is not one to be easily avoided, it is important to pay closer attention to the documents handed to you especially if you were to purchase a vehicle from an online seller. A legitimate car title has the following details:
- Date of when the purchase was made
- Price of the vehicle in both numbers and words
- Car mileage
- Signatures of both the buyer and seller which should automatically prove that both parties are in mutual agreement with the details provided in the title
Deed of Sale
The Deed of Sale (DOS) or the Deed of Absolute Sale (DOAS) is a legal document that proves that a seller and buyer has come to a conclusion with regards to the sale or the purchase of the vehicle. Because it functions as proof that a sale has in fact transpired, it can protect both the parties involved should disagreements arise. This form must be filled correctly to avoid the disagreements mentioned and lastly, have it notarized. The deed of sale should include the following details:
- Plate number
- Vehicle identification number
- Official receipt number
- Car registration number
- Purchase price
- Sell date
- Personal information of both parties
Although it pays to have the document thoroughly checked by experts to ensure that the documents are not scams or falsified.
A Registration Certificate essentially proves that the vehicle to be purchased is legitimate and is registered in the Land of Transportation Office (LTO) in your region. Once the sale is made, it is important to undergo the processes that the new owner must go through for the transfer of ownership. It is important to take note that LTO car registration is only valid for the first three years. Once the initial period is up, you are required to renew your registration in your region’s LTO.
Purchase receipts do not usually appear in purchases between a buyer and seller not part of a company although it is a document that is just as important as it serves as additional proof of the sale that occurred so it pays to ask for it still because you will be handed it once you do. This can follow the generic template that all receipts follow and details the name of the buyer and the seller, the date the purchase was made, the name of the vehicle and the overall costs.
How do I Write a Car Sale Agreement?
Car Sale Agreements are fairly easy to draft. It firstly has to identify the prospective buyer and ask their personal information such as their address and contact number. The contract should also provide the characteristics of the vehicle and then move forward by detailing the purchase price of the car, the accompanying fees, the financing information, if a mortgage loan were applied for to purchase it and the modes of payment, the monthly payments and for how long the payments shall be made before it is completely paid off. The contract should also explain the terms and conditions that both parties are legally bound to follow and lastly, the signatures that will record and validate the translation that just took place.
What is a Sales Agreement for a Car?
A Vehicle Sale Agreement is basically the document that details the terms and conditions and everything that concerns the sale of the vehicle.
Is a Purchase Agreement the same as a Bill of Sale?
A Sales Purchase Agreement is the eventual contract to make a sale that is more comprehensive and detailed in providing the information of the transaction. The Bill of Sale, on the other hand, is prepared once the sale is sealed and functions more to validate that the ownership of a property is being transferred to its new owner.