Vehicle sale agreement

About this vehicle sales agreement

When you sell a second hand car, motorbike or other vehicle through private sales it is critical that you agree the terms of the sale and purchase with the buyer in writing.

Documenting the agreement and the state of the used car prevents the buyer from later claiming that you misled them as to the condition and demanding his money back.

If you are the buyer, then a car sale agreement gives you peace of mind that you know what you are buying.

The law relating to selling your vehicle

In any private sale, you can agree the terms between yourself and the other party. The law is common law.

As a seller, you could advertise your car with a poster in the window with 'sold as seen, no warranty given or implied' written on it and accept cash in hand from the first person who wants to puchase it. The agreement would be verbal and legally binding.

The problem with this sort of arrangement is that there is no record of what was agreed. If the buyer came back (perhaps with a genuine complaint) six months later, they could argue that important information was withheld at sale (or not) and demand money back.

The AA recommends that you use a written agreement and goes as far as producing a free sample download. However, the AA version (and many of the free versions on the Internet), in our opinion, doesn’t go far enough to document the car or the legal agreement.

The Net Lawman version, while not free, is far more comprehensive and thus protects both parties far more greatly.

This document is more than a simple vehicle bill of sale. The warranties (statements of condition) provide protection for both the seller and the new legal owner against claims relating to the condition.

Sale by professional dealers

In a sale of a motor vehicle by a professional dealer to a private individual, consumer protection law gives the purchaser certain rights that are not covered in this agreement. An individual might also buy a used car with credit, provision for which is not included in this contract.

However, if the seller and the buyer are both businesses (one being a dealer selling to another business) or both private individuals, this document is suitable.

How to use this agreement

To use this agreement, complete as many details in advance as possible (the template is in Microsoft Word format) and then print two copies, one for you and one for the other of you.

Complete the remainder of the form in front of the buyer or seller. Both parties should sign both copies and keep them as proof of sale.

The payment method is likely to be cash, but it could also be by bank transfer, money order or Internet payment. What is important is that title to the vehicle (legal ownership) transfers at the same time as full payment.

Contract contents

The document covers:

• details of the buyer and the seller
• details of the vehicle, including the vehicle identification number (VIN), make and model, body type, registration number and the odometer reading
• seller’s warranties
• transfer of ownership
• DVLA owner registration arrangements
• risk