Free Contract Purchase Agreement

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Contract Purchase Agreement

Where will this Contract Purchase Agreement be used?



Where will this Contract Purchase Agreement be used?

England


EnglandBuilt for England
Different countries have different rules and regulations. Your Contract Purchase Agreement will be customised for England.


Frequently Asked Questions
Who should use a Contract Purchase Agreement?A Contract Purchase Agreement protects the parties within a vehicle financing agreement. This Agreement is ideal for an automobile lease/sale not involving anyone in the business of selling or leasing vehicles (e.g. car dealerships).

Those in the business of selling or leasing vehicles must typically comply with additional regulations (such as obtaining a consumer credit licence, or meeting certain warranty requirements).

Please contact the Financial Conduct Authority if you require further information.


Your Contract Purchase Agreement

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Contract Purchase Agreement Page of
Initials: ______________________________ Page of

CONTRACT PURCHASE AGREEMENT

THIS CONTRACT PURCHASE AGREEMENT (this "Agreement") dated this ________ day of ________________, ________

BETWEEN:


________________________ of _____________________________________
(the "Buyer")

OF THE FIRST PART

- AND -


________________________ of _____________________________________
(the "Seller")

OF THE SECOND PART

(the Buyer and Seller are collectively the "Parties")

IN CONSIDERATION of the mutual covenants and promises in this Agreement and other valuable consideration, the sufficiency of which consideration the Parties hereby acknowledge, the Seller desires to sell the Vehicle described in this Agreement to the Buyer, and the Buyer desires to buy the Vehicle from the Seller on the following terms:

  1. Agreement Details
  2. The Seller desires to sell the Vehicle described as a new 2019 __________ __________ __________, with vehicle identification number __________ (the "Vehicle") to the Buyer, and the Buyer desires to buy the Vehicle from the Seller for personal, family or household use.
  3. The Seller owns the Vehicle that is the subject of this Agreement.
  4. Once the Buyer has paid the Seller all Monthly Payments, the Guaranteed Future Value of the Vehicle, and any fees, taxes, and expenses related to the purchase of the Vehicle, the Seller will transfer title to the Vehicle to the Buyer.
  5. Until the Buyer completes the purchase of the Vehicle, the Seller will lease the Vehicle to the Buyer according to the terms of this Agreement.
  6. Agreement Cost Disclosure
  7. The full retail value of the Vehicle as of this date is £1.
  8. The amount to be amortised over the term of the Agreement is £1.00.
  9. The guaranteed future value of the Vehicle is £_______ (the "Guaranteed Future Value").
  10. The Agreement interest rate is 4.5% per annum.
  11. The term of the Agreement is one month (the "Term").
  12. This Agreement includes unlimited miles. The Buyer will not be required to pay any fees for miles used.
  13. The Buyer will provide a down payment of £_______, which will be subtracted from the amount to be amortised over the Term.
  14. The total amount payable by the Buyer upon signing this Agreement is £1.00.
  15. The monthly payment under this Agreement is £1.00 (the "Monthly Payment"). Any VAT would be allocated over the Term of the Agreement and added to that Monthly Payment. The first payment will be due upon signing and the following payments will continue each month on the same day of the month as the Agreement is signed. If a Monthly Payment is due on the 29th, 30th, or 31st, then it is due on the last day of the month in a month that does not have a 29th, 30th, or 31st.
  16. Monthly Payments may be made by bank transfer, cheque, post-dated cheques, money order, bank draft or pre-authorised payment.
  17. At the conclusion of the Agreement, if all Monthly Payments are made, the total cost of the Agreement, excluding the Guaranteed Future Value, and any cost for repairing excess wear and tear to the Vehicle, will be £1.00.
  18. Except as expressly provided in this Agreement, no warranties, either express or implied, statutory or otherwise, as to any matter whatsoever, have been given by the Seller.
  19. Buyer Obligations
  20. The Buyer will assume all risk of loss and damage to the Vehicle. The Buyer is responsible for insuring the Vehicle based on its full retail value, with the following coverage:
    1. bodily injury and property damage coverage in the minimum amount of £1,000,000;
    2. comprehensive fire and theft insurance with a maximum excess of £250; and
    3. collision insurance with a maximum excess of £250.

    The Buyer will ensure that the Seller is named as registered owner, and as "Additional Insured" and loss payee in the insurance policy (the "Insurance Policy").

  21. The Buyer agrees to co-operate with the Seller and the insurance company in pursuing or defending any claim or action resulting from the use of the Vehicle. Any award or money the Buyer receives as a result of a claim or action is to be assigned to the Seller. If the Buyer fails to maintain insurance or if a claim is denied by the Buyer's insurance company for any reason, the Buyer remains responsible to pay the total cost of the Agreement.
  22. The Buyer agrees to indemnify the Seller from any loss, and in order to prevent such loss, the Buyer will do the following:
    1. keep the Vehicle free of encumbrances, such as fines and liens;
    2. indemnify the Seller from all claims and expenses resulting from the maintenance and use of the Vehicle; and
    3. pay all amounts owed under this Agreement without deducting any amounts the Buyer claims to be owed by the Seller.
  23. The Buyer is prohibited from using, transferring, or altering the Vehicle, as follows:
    1. the Vehicle is not to be used by drivers without an appropriate licence or those restricted under the Insurance Policy;
    2. the Vehicle is not to be used illegally, in a manner contrary to the Insurance Policy, or as a vehicle for hire or public transport;
    3. the Buyer will not transfer or assign this Agreement, or ownership of the Vehicle, to a third party, except with the Seller's prior written consent. The Buyer will also ensure that the Vehicle is not seised, confiscated, or involuntarily transferred, even if the Vehicle is the subject of judicial or administrative proceedings;
    4. the Buyer will not remove the Vehicle from the country in which this Agreement is signed without the Seller's prior written consent, with the exception of trips within continental Europe of less than 60 days; and
    5. the Buyer will not install accessories in the Vehicle, or alter the Vehicle in any way, without the Seller's prior written consent.
  24. During the Term of the Agreement, the Buyer will be responsible for paying all fees required for registration, licensing, testing, and any inspection of the Vehicle requested by a government or other authority. The initial cost of registration must be paid prior to removing the Vehicle from the Seller's possession.
  25. Inspections
  26. The Buyer acknowledges that the Vehicle has been inspected and the Buyer accepts the Vehicle as being in a good state of repair, not including manufacturer's defects which would not have been visible upon inspection.
  27. The Seller has the right to inspect the Vehicle, without prior notice, at all reasonable times during the Term of this Agreement.
  28. Event Of Default
  29. The Buyer will be in default under this Agreement if:
    1. the Buyer fails to make a Monthly Payment on the due date;
    2. a bankruptcy, receivership, or insolvency proceeding is initiated by the Buyer or against the Buyer;
    3. a creditor or a government authority seises the Vehicle;
    4. the Buyer has misrepresented personal or financial information;
    5. the Buyer is no longer living;
    6. the Vehicle is stolen or damaged beyond repair;
    7. the Buyer does not pay the Guaranteed Future Value and the Vehicle is not returned at the end of the Term; or
    8. the Buyer breaches any other term of this Agreement.
  30. In the event that the Buyer defaults under this Agreement, the Buyer will be required to pay the amounts applicable to the Vehicle during the remainder of the Term.
  31. If the Buyer defaults under this Agreement, the Seller will pursue the remedies outlined in this Agreement, in addition to any other remedies allowed by law. If the Buyer defaults, the Seller may terminate this Agreement, and may recover the Vehicle and sue the Buyer for damages.
  32. There may be a substantial charge if you end this Agreement early without purchasing the Vehicle. The charge may be up to several thousand pounds. The actual charge will depend on when the Agreement is terminated. The earlier you end the Agreement, the greater this charge is likely to be.
  33. Excessive Wear and Tear
  34. The Buyer is responsible for ensuring that the Vehicle is regularly maintained and is kept in good repair. Regular maintenance and repair includes, but is not limited to, the excessive wear and tear provisions below. The Buyer is to pay the costs of regular maintenance and any costs for repairs not covered by warranty.
  35. Excessive wear and tear will include, but is not limited to, the following, even if covered by the Buyer's Insurance Policy:
    1. cracked, damaged, or tinted glass;
    2. dented or damaged body panels, wings, lights, or paint;
    3. missing equipment or accessories that were provided with the Vehicle, including but not limited to wheel covers, jack, wheel wrench, and spare tyre or regular tyres;
    4. tyres with less than 3mm of tread remaining at the lowest point;
    5. damage to the interior of the Vehicle, including but not limited to dash, seats, floor covering, upholstery, truck liner, and center console (if applicable); or
    6. mechanical damage that affects the safe, proper, or lawful operation of the Vehicle, which would include damage that causes the Vehicle to fail a safety inspection in the country where this Agreement is signed.
  36. If the Vehicle has excess wear and tear, there will be a charge to the Buyer for the excess wear and tear.
  37. During the Term, damaged or lost parts, equipment, or accessories may be replaced with items of equal or better quality and construction, and replacement items that meet this standard will be accepted as original items, upon return of the Vehicle.
  38. Returning the Vehicle
  39. If the Buyer has already paid 50% of the Monthly Payments or more, the Buyer may return the Vehicle at any time by paying the following amounts:
    1. the cost of repairs needed as a result of excess wear and tear; and
    2. any outstanding amounts, other than Monthly Payments, under this Agreement.
  40. If the Buyer has not paid 50% of the Monthly Payments, the Buyer may return the Vehicle at any time by paying the following amounts:
    1. 50% of the total Monthly Payments minus the amount of Monthly Payments the Buyer has already paid;
    2. the cost of repairs needed as a result of excess wear and tear; and
    3. any other outstanding amounts under this Agreement.
  41. After the Buyer has returned the Vehicle and paid any required costs and fees, the Seller will return the following amounts, or the remaining portions of these amounts, to the Buyer:
    1. any money received from an insurance claim or action that is not used to repair or replace the Vehicle.
  42. Purchasing the Vehicle
  43. The Buyer may complete the purchase of the Vehicle at any time during the Agreement by paying the following amounts:
    1. the Monthly Payment multiplied by the number of months remaining in the Term;
    2. the Guaranteed Future Value of the Vehicle; and
    3. any fees, taxes, and expenses related to the purchase of the Vehicle.
  44. The Buyer may complete the purchase of the Vehicle at the end of the Term by paying the following amounts:
    1. the Guaranteed Future Value of the Vehicle; and
    2. any fees, taxes, and expenses related to the purchase of the Vehicle.
  45. After the Buyer has paid all of the costs and fees associated with purchasing the Vehicle, the Seller will return the following amounts, or the remaining portions of these amounts, to the Buyer:
    1. any money received from an insurance claim or action that is not used to repair or replace the Vehicle.
  46. General Provisions
  47. This Agreement may not be assigned to a third party without the Seller's prior written consent and approval.
  48. This Agreement will pass to the benefit of and be binding upon the Buyer's respective heirs, executors, administrators, successors and assigns.
  49. This Agreement may only be amended or modified by a written instrument executed by both Parties to this Agreement.
  50. All costs, expenses and expenditures including, and without limitation, the complete legal costs incurred by enforcing this Agreement as a result of any default by the Buyer, will be added to the amount then outstanding and will immediately be paid by the Buyer.
  51. The clauses and paragraphs contained in this Agreement are intended to be read and construed independently of each other. If any part of this Agreement is held to be invalid, this invalidity will not affect the operation of any other part of this Agreement.
  52. If there is a conflict between any provision of this Agreement and any form of agreement prescribed by applicable legislation of England (the "Act"), that prescribed form from the Act will prevail and such provisions of the Agreement will be amended or deleted as necessary in order to comply with that prescribed form. Further, any provisions that are required by the Act are incorporated into this Agreement.
  53. Headings are inserted for the convenience of the Parties to this Agreement only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.
  54. This Agreement constitutes the entire agreement between the Parties to this Agreement and there are no further items or provisions, either oral or otherwise.
  55. The Buyer is entitled to a complete copy of this Agreement. This Agreement should not be signed until all terms have been set out and the Buyer has read it entirely.
  56. This Agreement will be governed by the laws of England.

IN WITNESS WHEREOF the Parties have executed this Agreement on this ________ day of ________________, ________.

 

_______________________________
______________________(Seller)

 

_______________________________
______________________(Buyer)



NOTICE TO THE BUYER:

(1)  This is a financing agreement. You do not own the motor vehicle previously described until you have paid the Seller all Monthly Payments, the Guaranteed Future Value of the Vehicle, and any fees, taxes, and expenses related to the purchase of the Vehicle;

(2)  Do not sign this Agreement before you read it or if it contains any blank spaces to be filled in;

(3)  You are entitled to a completely filled in copy of this Agreement when you sign it;

(4)  Warning -- unless a charge is included in this Agreement for public liability or property damage insurance, payment for that coverage is not provided by this Agreement.

I do hereby acknowledge receipt of a completed and signed copy of this Agreement. ________

Buyer Initials

I do hereby acknowledge receipt of a completed and signed copy of this Agreement. ________

Seller Initials


Itemisation of Gross Capitalised Cost

(A) Value of the Vehicle as equipped at the time of entering into the Agreement ...................................................................................................

 

£1

(B) Values and descriptions of accessories and optional equipment the Seller agrees to add to the Vehicle after entering into the Agreement .......

 


none

(C) Premium to be paid for each policy of insurance ................................

 

none

(D) Charge for each service contract ..........................................................

 

none

(E) Outstanding Agreement balance or prior credit balance  ....................

 

none

(F) Itemisation of any other good or service not included above ..............

 

none

     
   
 

(G) Total Gross Capitalised Cost .............................................................

 

£1.00



Monthly Payment Calculation

Gross capitalised cost. The agreed upon value of the Vehicle (£1) and any items the Buyer pays over the Term (such as service contracts, insurance, any outstanding prior credit or Agreement balance) ....................................................................................................

 

£1.00

Capitalised cost reduction. The amount of the trade in allowance and down payment made by the Buyer to reduce the gross capitalised cost ...................................................................................................................

-

£__________

Adjusted capitalised cost. The amount used in calculating the periodic payments ..................................................................................................
(This amount along with the additional early termination charges will be used in determining your early termination liability.)

=

£1.00

Guaranteed Future Value.  The value of the Vehicle at the end of the Agreement used in calculating the base Monthly Payments ....................

-

£__________

Depreciation and any amortised amounts.  The amount charged for the Vehicle's decline in value through normal use and other items paid over the Term ............................................................................................

=

£1.00

Interest charge.  The interest charged in addition to the depreciation and any amortised amounts .......................................................................

+

£0.00

Total of base monthly payments.  The depreciation and any amortised amounts plus the interest charge ..............................................................

=

£1.00

Agreement payments.  The number of payments in your Agreement ...

 

/ 1

Base monthly payment............................................................................

=

£1.00

Monthly VAT...........................................................................................

 

_____

Total Monthly Payment..........................................................................

=

£1.00

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