Vehicle Purchase Agreement | CTFA Exam Study Guide | ABA

Vehicle Purchase Agreement

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Question

It is an agreement to purchase an automobile that states the offering price and all conditions of the offer; when signed by the buyer and seller, the contract legally binds them to its terms.

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A. B. C. D.

B

The answer to this question is B. Sales Contract.

A sales contract is an agreement between a buyer and a seller that outlines the terms and conditions of a sale, including the offering price and any other conditions of the transaction. When both the buyer and the seller sign the contract, they are legally bound to its terms.

In the context of the purchase of an automobile, a sales contract would typically include details such as the make and model of the vehicle, the year it was manufactured, its condition, the purchase price, and any warranties or guarantees that apply. It may also include provisions for financing, if the buyer is obtaining a loan to purchase the vehicle.

A financing contract, on the other hand, is a separate agreement that outlines the terms of a loan for the purchase of the vehicle. This contract is between the buyer and the lender, rather than between the buyer and the seller. A car financing agreement may refer to the specific terms and conditions of the loan, such as the interest rate, repayment schedule, and any fees or penalties that apply.

A dealer's agreement is a contract between a dealer and a manufacturer or supplier, outlining the terms of their relationship. It would not typically be relevant to the purchase of an individual vehicle by a consumer.

In summary, a sales contract is the most appropriate answer to the question, as it is the agreement that binds the buyer and seller to the terms of the purchase of an automobile.