Selling a car means a long process as it involves a lengthy documentation process. You might want to settle the deal with a mere handshake, but it does not guarantee that you will stay safe if an issue arises, especially if you’re selling your car to a stranger. To keep yourself safe and out of any legal hassle, you should consider a car sales contract.
Car Sale Contracts
What to include?
A car sale contract usually includes information about yourself as the seller, the buyer, and your car. It also mentions the car’s price and the payment method. A vehicle sale contract consists of the following parts:
- Buyer’s information
This refers to the personal information about the buyer and you can find this in their driver’s license. The details to include are:
The buyer’s full name
The buyer’s address
The buyer’s date of birth
The buyer’s Social Security Number
- Pricing and sales information
This part of the used car sales agreement includes your car’s total sales price, which you will break down into:
Your car’s sales price
The prices of each additional option (if any, list them separately)
All other fees including advertising fee, destination fee, documentation fee, registration fee, and dealership fee
The sales tax amount
- Financing information
This part enumerates all of the relevant financing details. This becomes significant if the buyer will purchase your car through financing. If so, include the following:
Your car’s total price including taxes and fees
The down payment amount paid by the buyer
The trade-in value
The total amount to pay through financing
The loan’s interest rate
The payment period’s length or term
The monthly payment amounts
Used Car Sales Agreements
How to write a car sale contract?
Often, selling your used car to a buyer is more economical than trading in your car to a car dealership. The biggest downside of this deal is the responsibility of creating your own car sales contract.
Fortunately, a car or vehicle sales agreement is a simple document that you can make on your own. Here are the steps to do this:
- Identify the basic details
The first sentence of your should already identify the complete names of both parties, the buyer and yourself as the seller, and a statement that the document is for the sale of a car. Also, mention the addresses of both parties. It is also a good idea to attach copies of the driver’s licenses of both parties for verification purposes.
- Provide details about your car
Enumerate the identifying features of your car including:
Color (exterior and interior)
Make and model
Any unique features like mechanical or cosmetic issues
Vehicle Identification Number (VIN)
- Make sure to add only accurate information
Any fraudulent claims about the car’s details or the terms of the sales can lead to your car sale contract with payments getting voided. Make sure that you and the buyer understand each other and that no one misrepresents the car or the funds that you will exchange.
- State the purchase price and the date of the sale
The contract should be very clear on whether the purchase price includes the sales taxes because, in some states, you’re required to charge sales taxes when you sell your car. You should specify in the document that your purchase price includes the sales tax or decide that you will add the sales tax is to the price.
- Indicate the method of delivery
If the car you’re selling is not located in the place where you and the buyer reside, mention the method of delivery and responsibility in your contract. In such a case, you have a number of delivery options:
Shipping the car
Delivering the car to the buyer yourself
Asking the buyer to pick-up the car
Hiring a third-party to deliver the car
In your contract, you should also specify who will take responsibility for the delivery costs. The expenses incurred may include the shipping of the car, return flight tickets or car rental for owner delivery.
- Describe your car’s condition
In most cases, you will sell your car “as is.” This limits your liability for any issues in terms of your car’s condition. Add a statement or line in your contract stating that you’re selling the car “as is” and that you “make no warranties about the car’s condition.”
- Explain the documents that you will provide to the buyer
The contract should state that you will provide the buyer with the title of the car and other required documentation like the latest emissions test report, and other service or maintenance records. You can get in touch with the DMV office of your state regarding any other document you must provide to the buyer.
- Specify the status of your car’s title
You can only sell your vehicle if it has a clean title. This means that there aren’t any liens on the title for loans or other legal actions against you. There are some cases though where you can sell your car even when the bank still holds the title. Just make sure that the buyer knows this.
- Sign the contract and date it
Both you and the buyer should sign the contract and method. After signing, make copies of this document. One party keeps the original and the other keeps the copy. You can the buyer can decide this.
You can also sign your contract in the presence of a notary. Doing this adds an extra layer of protection as the notary provides solid evidence that both parties are who they claim to be and that both of you agreed to the terms.
Vehicle Sale Contracts
The best time to sell your car
Perhaps the best time to sell your car and create a car sale contract is when everything in it functions properly and there aren’t any service due lights on your dashboard. Just place yourself in the shoes of the buyer.
You would want a reduction in the price if the car is not in good shape. Such deduction makes up for the cost of needed repairs and maintenance. If you want a good price for your car, make sure it works well.