You have crossed off almost everything on your car buying to-do list. According to Carfax, there should not be any hidden damage to the vehicle and the odometer presents an accurate reading. The sales rep honored the discount that was mentioned in an online advertisement on the dealership’s website. Now, there is just one thing to do and that is sign a vehicle purchase agreement.
Also known as a sales contract, a vehicle purchase agreement represents the document that lists the legal obligations of both the buyer and seller. Amidst all the excitement of finding the car of your dreams, you do not want to allow the excitement to overshadow the importance of reading the terms of a vehicle purchase agreement.
Overview of a Vehicle Purchase Agreement
Auto dealers finalize the sale of automobiles by requiring buyers to sign a sales contract. The contract contains the legal terms that both parties must follow, as well as all the information that regards financing the purchase of a vehicle. You should be able to read everything related to the payment schedule that includes fees and taxes.
Vehicle purchase agreements can be long because the contracts present a considerable amount of information. It is because of the length of vehicle purchase agreements, as well as the fine print, that some car buyers sign vehicle purchase agreements without having read everything printed in the contracts.
Here is what you should find in a vehicle purchase agreement:
- Your name and address
- Auto dealer’s name and address
- Make, model, and color of the car
- Vehicle Identification Number (VIN)
- Odometer reading
- Date of sale
- Purchase price
- Payment terms
- Financing terms
- Your signature and the signature of the dealer’s sales manager
Most states require car dealers to use similar forms for vehicle purchase agreements to prevent buyers from making mistakes when signing the contracts. The only difference between the forms used by auto dealerships is the information supplied by both parties signing the sales contract.
Sales and Financing Information
In addition to the price of the vehicle and the total costs of all accessories, a sales contract should include several fees. Make sure you discover what the fees are before signing a vehicle sales agreement.
- Dealership fee
- Registration fee
- Documentation fee
- Destination fee
- Advertising fee
- Amount of sales tax
The financing information in a vehicle purchase agreement presents much of the same information that is written into your auto loan.
- Total purchase price
- Fees and Taxes
- Value of a trade-in
- Amount to be financed by the loan
- Loan interest rate
- Number of months you have to make a payment
- Amount of each monthly payment
- Name and address of the lender
What You Need to Look for in a Vehicle Purchase Agreement
A vehicle purchase agreement is considered a binding contract. If you fail to read the entire sales contract, one or more errors can come back to hurt you financially. You also want to make sure all the non-financial information is accurate.
Consumer Reports came up with a list of things car buyers should look for before signing on the dotted line.
- Errors concerning personal information
- Questionable fees
- Charges for free items
- Unwanted vehicle accessories
- Higher interest rate than agreed upon
- A lower value for your-trade-in
Do Your Homework
An unethical sales rep might ask you to sign a sales contract on the spot. Your answer should be for the sale to consummate, you want to take the vehicle purchase agreement home to spend the right amount of time to read it. If a car dealer sales rep pressures you into signing a vehicle purchase agreement, without first allowing you to spend time reading it, then you should walk away and visit another auto dealership.
Most car dealers operate ethically because they understand the importance of building a base of loyal customers. However, some auto dealerships rather cut corners to make a few extra bucks by ripping off customers. If you believe a car dealer tricked you into signing a sales contract, or worse, coerced you into signing a sales contract, you should reach out to a California consumer protection lawyer who can review your case.
You can even take a proposed vehicle purchase agreement to a business contract attorney to ensure the language is legally appropriate and the terms of the contract do not put you in financial distress.