Vehicle Sale Agreement

What is a vehicle sale agreement?

A vehicle sale agreement is a document that can be used to lay out the details of the sale of a vehicle (e.g., a car, truck, van, motorcycle, boat, etc.) from a seller to a buyer. Using this agreement, the buyer and seller can outline the terms and conditions of the sale.

What is the difference between a vehicle sale agreement and a property sale agreement?

This vehicle sale agreement can only be used to sell a four-wheeled vehicle, motorcycle, or boat.

By contrast, a property sale agreement is to be used for the sale of residential or commercial property, such as a home, office building, or plot of land.

Is it mandatory to have a vehicle sale agreement?

No, a vehicle sale agreement is not necessary. The process of selling a vehicle only requires that the title to the vehicle be transferred from the buyer to the seller.

However, though a vehicle sale agreement is not necessary, it is highly advisable to create one as it works to make sure both parties understand the details of the sale. It acts as protection for one or both of the parties in case there is a problem or future dispute related to the sale.

What is a vehicle identification number (VIN) or hull identification number (HIN)?

A vehicle identification number, commonly referred to as a VIN, is a unique number assigned to every vehicle. The VIN is located in numerous places both on the vehicle as well as on the titles, insurance policies, and service records for the vehicle. A hull identification number, also known as a HIN, is the equivalent unique number for a boat.

What must a vehicle sale agreement contain?

A valid vehicle sale agreement must contain at least the following mandatory sections:

• Description of the vehicle: The vehicle sale agreement includes a full description of the vehicle including the make, model, year, and vehicle identification number (or hull identification number if the vehicle is a boat).
• Price of the vehicle: The vehicle sale agreement states the price that the buyer will pay for the vehicle, as well as whether sales tax will be included with the sale.
• Odometer reading and disclosure: If the vehicle being sold is a four-wheeled motor vehicle or motorcycle, the vehicle sale agreement must include a reading of the odometer which displays how many miles the vehicle has been driven. The seller must also sign the odometer disclosure attesting to the accuracy of the odometer reading.
• Warranty: The vehicle sale agreement includes a notification that the vehicle is being sold as-is and states that the buyer has been given the opportunity to inspect the vehicle before purchase.
• Delivery details: The vehicle sale agreement describes when and how the vehicle will be delivered from the seller to the buyer.

What are the prerequisites for using a vehicle sale agreement?

Prior to the sale of a used vehicle, the potential buyer should do their due diligence in researching the background of the vehicle. They can use a service such as CARFAX to get a vehicle history report. This report contains information about past accidents, the status of the vehicle's title, and other important information. The potential buyer may also elect to use trusted mechanic to check the condition of the vehicle and uncover any hidden issues before they purchase it.

What has to be done once the vehicle sale agreement is done?

Once the document is complete, both the buyer and seller should sign and date the vehicle sale agreement. In most states, the document does not need to be notarized or witnessed in order to be legally binding. However, in Louisiana, Maryland, Wyoming, Nebraska, and West Virginia the document should be signed in front of a notary and the notary should complete the included notarization page for the agreement to be legally binding on the parties.

The parties should each save a copy of the vehicle sale agreement in their files for future reference and in case of dispute or disagreement. Once this document has been completed, the seller should transfer the title to the vehicle to the buyer in the manner required by the state in which the car will be located after purchase. More information about this process can be found on the state's Department of Motor Vehicles website.

Is it necessary to notarize a vehicle sale agreement for it to be valid?

In most states, it is not necessary to notarize a vehicle sale agreement. . However, in Louisiana, Maryland, Wyoming, Nebraska, and West Virginia the document should be signed in front of a notary and the notary should complete the included notarization page for the agreement to be legally binding on the parties.

Which laws are applicable to a vehicle sale agreement?

Vehicle sale agreements, like general purpose sale agreements, in the United States are generally subject to both federal law and state specific laws, which cover general contract principles like formation and mutual understanding. Federal law dictates that a vehicle sale agreement must include a disclosure by the seller of the vehicle's odometer reading at the time of the sale. Further, state laws cover commercial transactions and business. For example, in Louisiana, Maryland, Nebraska, Wyoming, and West Virginia, a vehicle sales agreement must be certified by a notary.

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