A car purchase agreement is a legally-binding contract that serves to set the verbal agreements between buyer and seller of a motor vehicle in writing. It’s not a document that transfers ownership between the two. This contract only specifies the intention to go through with the sale, and that’s why it’s often called a sales agreement or sales contract. You can download the free vehicle purchase agreement template below or create a custom one online.
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 If you notice an error or outdated information, please contact us.
A vehicle purchase agreement, also called a vehicle sale agreement, is a written agreement that records the terms of a vehicle sale before the vehicle changes hands. It lists the price, the payment plan and the date of the transfer, so both sides know what to expect from the sale.
When you pay in cash or credit and receive a used car at a dealership lot or a private party sales, you also receive a bill of sale or a pink slip with it. This printable purchase and sale agreement transfers the ownership of the vehicle from the seller to the buyer. But before going through with the transaction and making a payment, you can sign a sale agreement.
As the name suggests, this agreement outlines all the details of the upcoming car purchase and indicates the agreement between the parties to commit to selling and buying the vehicle. As such, this document will contain information on:
Why would you want to make an act as simple as buying and selling a used car so complicated, though? Wouldn’t a simple verbal agreement do? Well, there are a couple of reasons.
One reason to create a legally-binding contract to outline the details of a vehicle purchase is to make sure that the dealer doesn’t sell it to somebody else. It may be the case that you’ve found your dream car but don’t have the money to purchase it now and trade-in is not an option. In this case, the dealer won’t have the legal right to sell the car until the time specified in the car sales contract.
Another reason is that you may need a longer payment period for financing your vehicle and don’t want to get banks involved. With a car purchase agreement, you can negotiate a payment plan with your dealership and pay in parts as per the contract.
Last but not least, signing a contract like this would prevent shady practices between buyer and seller. Sometimes, dealerships would charge extra fees on top of the total purchase price for the vehicle. If those fees are not outlined in the contract, you are not required to pay a dime over the total sum. Since the contract is legally-binding, the dealership will have to claim it even if they were to take it to court.
The difference between the vehicle sale agreement and bill of sale is both in timing and purpose. The bill of sale is used to transfer the ownership of a car from seller to buyer after the sale is made.
This document is a bit different. It declares the agreement between the two parties to buy and sell a vehicle. It also declares when the payment and transaction are going to take place, how payments should be made, and what fees should be paid to the dealer.
Creating and signing a car purchase agreement is just a part of the deal, however. This is only a document that gives you peace of mind that should the acquired vehicle be not in the condition you were promised at the dealership, you can win in court. However, it’s best to start the process of car purchase by doing due diligence to avoid going to court whatsoever. Here’s how you go about it.
The first thing to do is to think about how much money can you set aside for a new vehicle. A clear budget keeps you from getting hooked on the sales tactics at the dealership.
The next step in the process is finding your ideal vehicle. You can use the websites of local dealers or drive around in person to see what they have on the menu. Don’t go for the first one you see, though. Spend a day choosing cars to make sure you get the best deal not the first best thing you saw at the dealers.
Now, don’t buy what the salespeople tell you. Unless they set their words in writing, it’s all just suggestions, not genuine information. Instead of trusting the friendly person trying to sell you a vehicle, do a quick checkup on it yourself. Pay attention to the following things in your motor vehicle:
Looking at a vehicle never really lets you understand it as well as driving it. If it doesn’t seem like the one you’re looking at has a problem, hop in for a quick test drive.
If you end up loving the test drive, it’s time to negotiate a price. Normally, you can get a couple of hundred bucks off of a used vehicle in most states. You can also discuss the possibility of purchasing the vehicle on a payment plan. In this case, be very specific about the downpayment size and monthly payments.
Make sure that the dealership tells you about extra fees so that the total purchase price on the vehicle sale agreement doesn’t go up higher than expected. Note that you should include a sales tax on the sum total.
Once the deal is struck, you need to set it in stone. With a car purchase agreement signed by both parties, it would be impossible for the dealership to come up with additional fees that were never initially discussed.
Make sure to include anything and everything that pertains to the transaction when constructing the agreement. When you’re done with the sale agreement, check it a couple of times for mistakes and data entry errors.
Once you have the sale agreement ready, read it thoroughly and sign it. If you’re going to have a co-owner for a newly acquired vehicle, they should co-sign as well.
With that out of the way, all you have left to do is to show up on the specified date to close the deal. Pay the sum either in full or deposit down payment, and get your bill of sale and keys.
Unlike some other contracts, vehicle sales contracts often have a simplified form and a rather typical layout. You can, however, negotiate with your dealer to have a custom agreement. No matter what provisions do you put in the document, it does need to have a range of details to be deemed legally binding and effective. A car sale contract typically consists of the following elements.
If the transaction involves a different mode of payment like trade-in or money order, the car sale agreement should reflect that as well.
It’s okay if your document is not a custom one but a simple form instead. You can get one here for free, and use it for most car purchases save for ones with extremely unique conditions. Here’s how you fill out the template.
The screenshots under each step show the FormsPal Vehicle Purchase Agreement template filled with sample entries in blue, so you can see where each answer goes. The names, addresses, dates and amounts are examples only.
Once every blank is filled in, the agreement goes through a short routine before the vehicle changes hands. You read it through, both sides sign it, and you meet again on the transfer date to complete the sale. These two steps show how to use the finished agreement.
A sale agreement comes before the sale and records the price, the payment plan and the transfer date. A bill of sale comes after the sale and shows that the vehicle changed hands. Many people keep both with the other papers for the vehicle.
A vehicle sale agreement covers a few basics, and the FormsPal template has a blank for each of them.
Yes. You can fill in the downloaded PDF template with an online PDF editor, or create the agreement online and print it afterwards. A printed copy works well when both sides sign in person.
Both sides should keep a signed copy. One copy can go with the other papers for the vehicle, and the other can be filed with the sale records. A phone photo of the signed pages makes a handy backup.
Yes. The template works for a private vehicle sale as well as a sale through a dealer. Fill in the form, check the information against the vehicle, and note the transfer date. Then keep a copy of the template with the other sale papers.
General information, not legal or tax advice.
