Free Vehicle Purchase Agreement Templates [Word, PDF]

free vehicle purchase agreement 7

A vehicle purchase agreement is an agreement between the buyer and the seller. It is usually made for the sale and purchase of the car or some other vehicle. This agreement is also used in terms of the vehicle’s Bill of Sale. It communicates the terms of the sale from the previous owner to the current one.

Components of the Vehicle Purchase Agreement:

This agreement refers to in different terms like car sale contract that includes information about the buyer, the seller, the prices, and the car itself. Moreover, the simplest form of a purchase agreement is a Bill of Sale. It is an important document for the private individual because it acts as proof that he/she is no longer in possession of the vehicle. For the buyer, it serves as pink slip until the paperwork for the new ownership is done. It is just one page long and contains the following data;

  • The full name and complete address of the seller and the buyer.
  • Vehicle details like model, year, color, etc.
  • The Vehicle Information Number (VIN)
  • At the time of scale, the mileage on the odometer.
  • The date of sale
  • The purchase amount
  • Signatures of the buyer and the seller.

The purchases made with dealerships are more complex to sign, especially in case the buyer is financing a new vehicle. The dealerships require many documents and you might feel overwhelmed if you are buying the car for the first time. But if you are buying it for the second time, the documents are simple and easy to understand. The general contracts are used and they consist of the following three parts;

The information of the buyer:

This section contains the personal information and is usually provided in the driver’s license. The information of the co-signer or co-owner is mentioned in the contract as well. The most important details may include such as the buyer name and address, his date of birth, and social security number.

The information about the sale and pricing:

It contains the sales price of the vehicle and the amount of your sales tax. Other additional fees are;

  • Documentation fee
  • Destination fee
  • Advertising fee
  • Dealership fee
  • Registration fee

The financing information:

This part consists of all the relevant financing. It includes;

  • The total purchase amount of your vehicle i.e. fees and taxes
  • The down payment
  • Value of your trade-in
  • Financing amount
  • Interest rate of the loan
  • The length of the payment period

During your car sale contract, keep all these components in mind. Before purchasing, the buyer should be aware of the requirements. Ensure that all the information on the document is accurate before signing it.

Things to consider before signing the vehicle purchase agreement:

You should bear in mind that the vehicle purchase agreement is a binding contract. Carefully review the important factors of the agreement. Following are the things that you should review carefully;

Mistakes in your information:

Make sure the information provided by the buyer should be accurate.

Extra fees:

The sellers include unscrupulous and questionable fees to jack up their profits. Therefore, the buyers should review all the additional fees. If you don’t understand the fees, ask questions from the dealerships. If you receive an unsatisfactory explanation, then don’t sign the contract.

Free items which you are agreed on:

Some dealerships offer the buyers free items or services so make sure to include all in the purchase agreement. These free items or services should contain a zero amount in the agreement.

Extras which you didn’t want:

Find the items you didn’t request to purchase. After finding them, underline them and subtract its amount to the total.

The interest rate:

Another important factor in purchase agreement is an offer of great interest rates on financing. Ensure that it is present in the contract.

The worth of trade-in:

The trade-in value of the vehicle in the agreement should match the offer made by the salesperson. However, sometimes mistakes happen due to data entry errors. Everyone should double-check the contract before signing.

Why should you use a vehicle purchase agreement?

Here are the reasons for using a vehicle purchase agreement;

  • You should make a vehicle purchase agreement to specify the details of a vehicle purchase. This way, you ensure that the dealer doesn’t sell it to somebody else.
  • You may have to sign a contract for purchase in case you require an extended payment period for financing your vehicle as well as you don’t want the involvement of banks. Thus, you can negotiate a payment plan with a car purchase agreement.
  • When both the seller and buyer sign this contract, they prevent shady practices between them.

How to write your own vehicle purchase agreement?

Here are some useful steps to follow for writing your own vehicle purchase agreement;

  • At first, determine the reason for the contract. Write the full name and complete address of the buyer and the seller. For the purpose of identification, include the driver licenses for both parties.
  • Next, provide the detailed description of the vehicle. Write the identifying characteristics of the vehicles such as the color, the model, VIN, etc.
  • Make sure that all information is correct because providing false information may lead to a voidable contract. Both parties should understand the contents of the contract.
  • Mention the date of sale, the purchase price, and the method of payments. Until the payments are fully paid, hold on the car’s title. When all the obligations are settled send the title to the buyer via certified mail. Also, state that whether the purchase price is inclusive of sales taxes.
  • After that, state the method of delivery i.e. How the vehicle would be delivered. Discuss the condition of the vehicle. To sell the car “as is” is the most convenient for the seller.
  • Furthermore, mention the documents that the seller will provide to the buyer at the time of purchase.
  • State the status of the title and it should be clear.
  • In the end, affix the signatures of the buyer and the seller to make the contract valid. Make a copy of it and the original contract keeps by one party and the other will retain the copy. In addition, if possible sign the agreement in the presence of a notary.

How to start the process of a car purchase?

Let us discuss step-by-step the process of a car purchase;

Set up your budget

Firstly, you have to set up your budget i.e. how much money you have for a new car.

Find your ideal car

Finding your ideal car is the next step. Use the websites of local dealers or drive around in person to find the car. To make sure you get the best deal, you should spend a day to select cars and don’t select the first best thing you saw at the dealers.

Do a checkup

The seller just gives you suggestions not genuine information so don’t buy what they tell. Do a quick check-up on a car rather than trusting the friendly seller. You should focus on the following things;

  • Oil stains underneath the car
  • Signs of covered-up corrosion
  • Loose plastic details inside
  • Worn-out tires
  • Worn-out window seals
  • Messy dirty engine

Test drive it

You can better understand a vehicle by driving it. Do a quick test drive in case it doesn’t look like the one you’re looking at has a problem.

Negotiate the price

It’s time to start negotiating a price if you end up loving the test drive. Also, you can purchase the car on a payment plan. But, you have to be very specific in this case about the down payment size and monthly payments.

Make a vehicle purchase agreement

After finalizing the deal, make a vehicle purchase agreement that is signed by both parties. You should ensure that to include everything in the agreement.

Sign the deal

You should read the agreement thoroughly when you have made it and then sign it.


In conclusion, a vehicle purchase agreement is a legal binding document between the seller and the buyer made for the sale and purchase of the vehicle. It should also contain the amount and the manner the vehicle is paid for. Both parties should carefully read the contract before signing the agreement.

Faqs (Frequently Asked Questions)

What is a purchase agreement for a car?

A purchase agreement for a car is a legal contract between the buyer and the seller. It specifies all the important details about the transaction. The parties aren’t able to change the registration to the new owner without such a certified document of sale.

Is a vehicle purchase agreement legally binding?

Yes, a vehicle purchase agreement is legally binding. This document attests to a transfer in ownership from the seller to the buyer.

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