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How to develop strong auto sales contracts

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In 2019, there were over 17 million vehicles sold in the United States. Your sales team may have sold many of these vehicles at your car dealership, and your operation likely had each consumer sign a sales contract to finalize every purchase. 

Your auto dealership’s contracts should include clear expectations, definite terms and a detailed subject. Otherwise, your clients may try to rescind their end of the agreement, making it difficult for your business to maintain profitability. 

Add these elements to your sales contracts  

Your dealership’s sales contracts should include the following components: 

  • A detailed description of the sold vehicle, whether used or new 
  • The identity of the parties involved and the date of the sale 
  • Information about the payment method and the payment schedule 
  • Details about the condition of the vehicle and how the consumer will receive her or his purchase 

Other information you should add to your sales contracts includes warranty details, breach of contract stipulations, confidentiality provisions and severability terms. 

Include all details in written form  

If you discuss information verbally with a customer, but it is not included in the sales contract, you will not be able to enforce that stipulation. If you forget to include certain information in the original sales contract, you can add a written amendment to the document later on. 

Maintain simplicity  

Even though sales contracts are legally binding documents, they do not need to be complex to ensure enforceability. Draft your sales contracts with simple language and clear formatting to alert your consumers of exactly what is in the contract and their responsibilities. 

A solid sales contract cements the deals your auto dealership creates with your client base and protects your business from financial and reputation loss due to contract breaches. Good contracts between your dealership and your clients can also protect the possibility of repeat business.