Car purchase agreements

Why do you need a car purchase agreement?

A written purchase agreement records what the buyer and seller have agreed. It should describe the car, the price, payment, the car’s condition, the equipment included, and the date of delivery.

Oral agreements may be binding, but they are often difficult to prove. If the parties disagree about promised equipment, a previous defect, or the timing of payment, the written agreement provides a clearer record.

The agreement does not replace the buyer’s inspection of the car. Its purpose is to document the transaction and state how identified defects, conditions, and risks will be handled.

What should a car purchase agreement include?

The agreement should be tailored to the car and the way the transaction will be completed. It should normally include:

• the buyer’s and seller’s names and contact information
• the registration number and vehicle identification number
• the make, model, and model year
• the current mileage
• the purchase price, payment method, and any deposit
• the date and place of payment and delivery
• information about the car’s condition, damage, and known defects
• details of its service history, repairs, and modifications
• the equipment, tires, keys, and documents included
• any warranties or other promises made by the seller
• conditions relating to inspection, a test drive, or financing
• the date and both parties’ signatures.

If the seller has made specific statements about mileage, fuel consumption, battery capacity, previous damage, or recently completed repairs, these statements should also be recorded.

Checks before purchasing the car

The buyer should inspect the car and verify the seller’s information before signing. Confirm that the seller is the registered owner and has the right to sell the vehicle.

The buyer should also check:

• the official vehicle information
• whether the car is registered for road use
• its inspection status and any driving prohibition
• outstanding vehicle-related debts and any use prohibition
• any financing, leasing, or retention-of-title arrangement
• that the vehicle identification number matches the records
• the service book, receipts, and maintenance history
• the car’s actual condition through an inspection and test drive.

Vehicle-related debts may have consequences for a new owner even when the debt arose under a previous owner. These checks should therefore be completed shortly before the transaction.

Buying from a private seller or dealer

When one private individual purchases a car from another, the agreement and the Swedish Sale of Goods Act generally apply. Many of the Act’s provisions may be modified by agreement, making the contract particularly important.

When a consumer purchases a car from a dealer, the Swedish Consumer Sales Act applies. These rules are mandatory for the consumer’s benefit, and the agreement cannot provide the buyer with less protection.

Consumer protection may also apply when a business arranges the sale on behalf of a private owner. The agreement should clearly identify the seller and explain the dealer’s role in the transaction.

Condition and liability for defects

The seller should disclose known defects, damage, repairs, and modifications. The buyer should inspect and test-drive the car or arrange for a qualified person to conduct a technical inspection.

Stating that the car is sold “as is” does not eliminate all liability. The car may still be considered defective if the seller provided incorrect information, withheld an important fact, or if its condition is substantially worse than the buyer could reasonably expect.

The buyer generally cannot rely on a defect that was known before the purchase. The same may apply to defects that should have been discovered during an inspection that the buyer performed or declined without a valid reason.

Known defects and the parties’ agreement on how they will be handled should therefore be stated directly in the purchase agreement.

Payment, delivery, and transfer of ownership

The agreement should state when and how payment will be made and when the buyer will receive the car, keys, and documents. If the buyer pays a deposit, the agreement should explain what happens to it if the transaction is not completed.

The parties should report the ownership transfer when payment and delivery take place. They should verify that the information and effective date are correct.

If the car is registered for road use or will be placed in service as part of the ownership transfer, the buyer must have mandatory traffic insurance effective from the ownership transfer date. The agreement should also allocate responsibility for taxes, fees, and other costs connected with the transfer.

When to involve a lawyer

Legal assistance is recommended when the car has a high value, ownership is unclear, or the transaction requires specific terms concerning financing, warranties, repairs, delayed delivery, or liability for defects.

A lawyer helps ensure that the agreement accurately reflects the transaction and clearly allocates responsibility between the parties.