A vehicle promissory note is an agreement to pay for a vehicle purchase. It is a legally binding written promise to pay the vehicle seller the purchase amount of the vehicle in accordance with the terms mentioned in the note. Buyers use one when they cannot pay the full price up front. The seller then loans the purchase price to the buyer, using a vehicle promissory note template. The seller is the “lender” and the buyer is the “borrower.”
Last Updated: October 2026. This guide is reviewed and updated regularly to reflect current law. If you notice an error or outdated information, please contact us.
Create a free high quality Vehicle Promissory Note online now!
Build Your Document
Answer a few simple questions to make your document in minutes
Save and Print
Save progress and finish on any device, download and print anytime
Sign and Use
Your valid, lawyer-approved document is ready
... or download your Vehicle Promissory Note Template as a PDF file
A vehicle promissory note works like a short loan agreement for a sale where the buyer pays over time instead of all at once. The seller gets a written record of what the buyer owes, and the buyer knows how much to pay and when. Both sides sign the same page, so the terms are easy to confirm later. Common situations include:
A private car sale where the buyer pays in monthly installments.
A sale between family members or friends who want the payment plan written down.
A purchase where the seller finances the vehicle instead of a bank.
What to Include in a Vehicle Promissory Note
A vehicle promissory note puts the terms of a car sale in writing. It names the buyer and the seller, the amount owed, the rate, the vehicle and the repayment schedule, so both sides can read the same terms in one place. A vehicle promissory note should contain the following information:
Details of the Parties: The note should mention the full name and address of the buyer and seller or the borrower and lender respectively.
Amount of Loan: The amount of the loan will be the total of the purchase price plus interest. The principal amount can also be higher than the purchase price depending upon the mutual agreement between the parties.
Interest Rate: The interest rate to be charged should be mentioned in the note. State laws regarding the maximum interest rate that can be charged should be kept in mind while deciding the rate of interest.
Vehicle Description: A full description of the vehicle including the name, year, make, model, vehicle identification number, and odometer reading should be provided.
Repayment Structure: How and when the loan is to be repaid should be mentioned, whether in lumpsum or in installments. If it is to be paid in installments, the amount of each installment should be mentioned.
Location of Sale: The location of the sale should be mentioned. The county and state where the car is located is usually the location of the sale.
Payment Date and Maturity Date: Dates on which installments are to be paid or the lumpsum payment is to be made should be mentioned.
Non-payment Clause: Mutually agreed consequences of non-payment should be mentioned. It can include repossession and ownership transfer of the sold vehicle to the seller.
Signature and Date: Both parties should sign the agreement and the date should also be mentioned.
Create a free high quality Vehicle Promissory Note online now!
What to Gather Before You Start
Filling out the note goes quickly when the details are on the table first. Collect them before you open the PDF, so you do not have to stop and look things up halfway through. The borrower and the lender should agree on the numbers together, and each keeps a copy of the signed document.
The parties: the full name and address of the borrower and of the lender.
The money terms: the principal amount, the rate, the monthly payment and the payoff day.
The vehicle: the make, model, year, VIN and current odometer reading, taken from the car and its title.
The loan type: whether the note is secured by the vehicle or unsecured.
Filling out a Vehicle Promissory Note
The steps below follow the FormsPal vehicle promissory note on this page, in the same order as the blanks on the form. Download the PDF and fill it in on your screen with the online PDF editor, or print it and write in the blanks by hand.
The screenshots under each step show the FormsPal Vehicle Promissory Note template filled with sample entries in blue, so you can see where each answer goes. The names, addresses, dates and amounts are examples only.
Date, principal amount, parties and interest rate: Agree on the principal amount and the rate with the other party first. Then enter the date and the principal amount at the top, the borrower's name and address, the lender's name and address, and the rate as an annual percent.Step 1: sample entries, not a real document.
Make: Write the vehicle's make on the Make line. This is the company that built the car, such as Chevrolet, BMW or Ford.Step 2: sample entries, not a real document.
Model: Write the model on the Model line. This is the car's name, such as Mustang, M5 or Impala.Step 3: sample entries, not a real document.
Year: Write the model year on the Year line. This is when the company built the car.Step 4: sample entries, not a real document.
VIN: Copy the 17-character vehicle identification number onto the VIN line. Compare it with the title or the plate on the dashboard.Step 5: sample entries, not a real document.
Odometer: Write the current odometer reading on the Odometer line.Step 6: sample entries, not a real document.
Select one, as applicable: Mark one box only. The first box makes the loan secured by the vehicle. The second box makes the loan unsecured. The wording next to each box on the form explains what it means.Step 7: sample entries, not a real document.
Monthly payment day and amount: Enter the day of the month on which each payment is due, then the dollar sum of each monthly payment. To find it, divide the total you plan to repay by the number of months.Step 8: sample entries, not a real document.
Maturity date: Enter the day by which the whole loan, with any interest, is to be paid off.Step 9: sample entries, not a real document.
Governing law state: Enter your state on the State line, right after the maturity line. The form uses it in its governing law sentence.Step 10: sample entries, not a real document.
Borrower signature: The borrower signs on the Signature line and prints their name beneath it.Step 11: sample entries, not a real document.
Lender signature: The lender signs on the Signature line and prints their name beneath it.Step 12: sample entries, not a real document.
How to Sign and Use the Vehicle Promissory Note
After the blanks are filled in, a few last steps turn the blank form into a signed record of the loan. Take your time with them, because the borrower and the lender will both rely on this one page later.
Sign the note. Read through the names and the signing day. Then have the borrower and the lender each sign.
Share copies. Give a signed copy to each party.
Notarize. Notarise the Vehicle Promissory Note in accordance with the state laws.
Keep your signed copy with the other records for the vehicle.
Tips for Keeping the Payment Plan on Track
A clear payment plan keeps the borrower and the lender on the same page. These habits help both parties follow the agreement set out in the note, from the first payment to the last:
Write down how each payment will be made, such as cash or a bank transfer.
Give or ask for a short receipt after every payment.
Keep a simple log of payment days and sums.
Store the signed note and the receipts together in one safe place.
Talk early if either party expects a change in the terms.
Vehicle Promissory Note vs Bill of Sale
A vehicle promissory note and a bill of sale do different jobs in the same car deal. The note records the buyer’s promise to pay the seller over time, and it lists the payment terms both parties agreed on. A bill of sale is the receipt that shows the vehicle changed hands. Some sellers prepare both documents, so each party has a full record of the agreement.
Frequently Asked Questions
What is a Bill of Sale?
A Bill of Sale is the receipt for a vehicle sale. It is proof of the sale between the buyer and the seller and lists details like the sale price, the vehicle description, and the buyer and seller information.
If the buyer pays with a promissory note, the Bill of Sale can say so. Add a line such as “the payment is made through a promissory note dated (note date) and signed at (place of signing) between (party details).” A completed Bill of Sale should be provided only after all payment is received.
What other laws do I need to keep in mind before selling my vehicle?
Different states have different laws related to the sale of a vehicle. For example, some states require the seller to physically remove the license plate before transferring it to the buyer. Some states require signing a mandatory “release of liability form” to transfer liability from seller to buyer.
Therefore, it is important to check all state laws and DMV requirements before selling your vehicle. Download a free vehicle promissory note or use our convenient step-by-step document builder to create a personalized form.
What is the difference between a secured and an unsecured vehicle note?
The form has two boxes, one for a secured loan and one for an unsecured loan. A secured note is tied to the vehicle, and an unsecured note is not. Pick the box that matches the deal you made with the other party.
Where do I find the VIN?
The 17-character VIN is printed in several places on the car. Look at:
The plate on the dashboard, visible through the windshield on the driver's side.
The sticker on the driver's side door jamb.
The title and the registration papers.
What are the principal and the interest?
The principal is the amount of money the buyer still owes on the vehicle. The rate is the extra cost of borrowing that money, shown as an annual percent. The more the buyer owes, and the higher the rate, the more the total payoff grows.
How do I work out the monthly payment?
Start with the total the buyer will repay, which is the principal plus any interest. Divide that total by how many months the payment plan runs. The result is a rough monthly amount that you and the other party can adjust together before you enter it on the form.
What is the maturity date?
The maturity day is when the whole note is due to be paid off. It sits on page 2 of the form, just before the State line and the signature blocks.
Who is the borrower and who is the lender?
The buyer is the borrower. The buyer drives the vehicle away and repays the loan in installments. The seller is the lender. The seller is paid over time and signs the note too.
General information, not legal or tax advice.
Jennifer M. Settles
Author & Attorney
With over 25 years of experience as a business and transactional attorney, Jennifer has mastered the craft of closing highly successful deals for her clients. Through her wide-ranging expertise in commercial contracts, real estate transactions, M&A and corporate law, Jennifer secures results that are second-to-none.
