As consumers anticipate new car model releases in October, buyers are preparing to purchase by researching the legal agreements related to owning a new vehicle. Ownership is about more than sitting in a car and turning the key in the ignition. There are Precisely agreements, which buyers sign before leaving the dealer. Here are five contracts to research and consider before buying a new car.
The cost of new vehicles are increasing every year. Some trucks cost as much as a house, leaving new car buyers wondering how to pay for an automobile. Fortunately, vehicle financing agreements require the buyer to only pay a percentage upfront, called the down payment and installments monthly over a period of time. The finance company chooses an interest rate based upon the customer’s credit history or the perceived risk associated with lending the money. Higher interest rates will cost the buyer more money over the repayment period. Auto loan agreements are available directly from dealers, banks, credit unions, and friends. These loan contracts are legally binding and require prompt payment of the monthly note.
Car insurance is a legal requirement. Automobile drivers must insure the vehicle before leaving the car dealership. Insurance agreements outline the broad coverage for the vehicle, which is then explained in detail. Auto insurance provides asset protection in the event of an unforeseen incident or loss. The agreement includes the type of coverage and exclusions, such as drivers not covered during the term of the agreement.
Most dealers include the automobile warranty with the car purchase. With the warranty, a buyer may return the car to fix specified defects for a certain time period after the car’s purchase. A dealer may also include a limited warranty with a used car purchase as an incentive to the buyer to complete the sale.
When a car breaks down, the car’s owner may sign a maintenance or repair agreement with an auto mechanic to fix the vehicle. These agreements detail the type of repair for a one time fix or specifies ongoing maintenance performed over a period of time.
If an owner is not interested in buying a vehicle, he may lease the automobile under a lease agreement. Similar to an auto loan, a lease sometimes requires a down payment and monthly payments over a period of time. Leasing a vehicle may cost less than buying and at the end of the lease the automobile returns to the dealer. However, some lease agreements have a buy out option, which gives ownership to the lessee at the end of the lease period for a specified sum.