How to sign a car sales contract?

Signing contract in a right way will definitrly make you feel relaxed and it will save lots of the troubles. 

Actually it's not as hard as buying a car, because all the words will be written on paper plainly. In general, there are several types of contract you need to know before getting into the terminology part(which will be discussed in detail).

Contract with a concessionaire

The contract defines obligations and remedies and binds the two parties. The contract must therefore describe as faithfully as possible all aspects of the transaction, its limits, as well as exclusions or inclusions, if applicable.

Content of the contract

When the transaction is made with a concessionaire, the latter provides the contract. 

The contract establishes the personal data of the seller and the buyer, a description of the car, including the serial number or VIN, and other details relating to the price paid, taxes and other costs. If the car is covered by a warranty, the details must appear in the contract.


In most provinces, when a car is sold by a professional or a dealer, the transaction is automatically accompanied by a minimum guarantee (in effect for a defined period and / or an established mileage traveled). 

A dealer cannot sell a vehicle "as is" or "without any warranty" unless it finds specific details that the car is not in driving condition.

Contract with a private seller

During a sale between private individuals, it is strongly recommended , although not compulsory, to draw up a formal sales contract. The document must contain the make of the vehicle, the model, the year, the mileage and other relevant information.

The document must also state the scope of the warranty, if applicable. Unlike the dealer, the individual can sell a vehicle "without any warranty" or "as is". 

In practice, this means that the buyer gives up his prerogative to take legal action.

At the very least, an inspection before signing the contract will have provided you with valuable information on the actual condition of the vehicle.

Important note: Before signing any contract, read the entire document. By affixing your signature on the document, you declare that you ACCEPT and UNDERSTAND all the clauses. 

In the event of a lawsuit against the seller, the argument "I have not read the contract" or "It is not what I understood" will not constitute a valid defense before the courts.

The Sales Contract 

The final sales contract is the official document that binds the parties. In several provinces, it is impossible to reverse after signing.

Dealer contract

The final contract is the one that stipulates the method of payment. Unless you pay cash, which is quite rare these days, the contract refers to the type of loan incurred and specifies a large number of elements, including:

  • The final sale price or the amount to be financed;

  • The interest rate;

  • The duration of the contract;

  • The vehicle identification number;

  • The deposit;

  • The value of the trade-in vehicle;

  • The monthly payments;

  • The date of payment or the frequency of payments;

  • Details regarding insurance on the loan;

  • The guarantee (if applicable).

If certain elements are missing or if certain information is incorrect, the contract could be invalidated. At all times, if you plan to use legal measures, we strongly recommend that you consult a lawyer beforehand. It is a very bad idea to stop paying the monthly payments.

Contract with an individual

There is no funding here. If the seller offers it in one form or another, it could very well be a company representative posing as an individual. You should then think about what to get into.

You can write a contract on a paper towel if you want; however, we recommend that you use our model sales contract by an individual or download one from the Internet.

The exclusion or inclusion of any warranty is important and you should study carefully the warranty terms.

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