The Used Car Guide: Signing a Contract

The Used Car Guide: Signing a Contract Signing the contract is one of the most important aspects of a brand new or used car purchase. Here are some useful tips and suggestions to help you negotiate your way to signing a contract without any issues, stress, and hassle.

At the Dealership


The contract is the most important part of the car purchase. It is the binding element that ties one party to another, in this case, the car dealership to the car buyer. Each of the parties should be familiar with the aspects of the contract prior to signing it. The transaction of the contract is defined as certain obligations and a recourse. That's why the contract must state every element possible and clearly describe the transaction and all aspects, its limits, exclusions, inclusions, etc.

The final contract is the one that stipulates the method of payment. Unless you are not paying cash, which does not happen often anymore, the contract will refer to the type of loan and financing. It will include details such as the final sales price or the amount to be financed plus the interest rate and annual percentage rate, the duration of the contract, the VIN, the down payment amount, the trade-in value in case you trade-in a vehicle to the dealership, the monthly payment, the exact date of payment or a schedule of the payments, further details on credit insurance, warranty information, and more.

Contract’s Contents


If you are signing the contract with a dealership, they are the one that will supply and prepare the paperwork. The contract will contain areas for both parties signing the document and personal information about them, a description of the vehicle that is sold including its serial number of the vehicle identification number, details pertaining to the price paid, taxes, other fees. If the vehicle is sold with a warranty it will be described in the contract too.

Warranty


Many dealerships and professionals can offer some sort of minimal coverage warranty along with the contract when the car is sold. This warranty is often for a limited period of time or miles travelled. In general, a dealer cannot sell a vehicle without any warranties.

With a Private Seller


When it comes to buying a vehicle from a private seller, the contract is not necessary, however, it is highly recommended so both parties can have the peace of mind that all aspects of the deal are discussed and described. The contract should contain the vehicle’s make and model, the year of manufacturing, the mileage, and other details found in the contract. The mention of a warranty is important in this case too. A private seller usually sells the vehicle without any warranties or “As is” more commonly. With that being said, the buyer is agreeing upon signing the document to waive all recourse against the seller. The buyer should necessarily inspect the vehicle prior to signing the contract as this will disclose a great amount of information about the condition of the car.

In the case of a private sale, financing does not apply. However, if the private seller is offering you some alternative ways for financing, it pretty much means that he or she is a more curbside, of someone who poses as a private seller but is actually a professional working for a dealership business. Maybe this is the important time to evaluate what are you signing for in this case.

Important


Before you sign any contract make sure to read the document thoroughly. Putting your signature on the document means that you agree with, understand, and accept all clauses and conditions. In case of a lawsuit against the seller the fact that you haven’t read or understood the contract is not a valid defence.
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