Contents
What a car sale contract is for
Is it mandatory to sign a contract?
What a vehicle sale contract must include
How to draft the contract step by step
Car sale contract template
Special clauses depending on the type of sale
Common mistakes in sale and purchase contracts
Frequently asked questions
When you sell or buy a second-hand car between private individuals, the sale and purchase contract is the document that puts in writing what both parties have agreed: which car is being sold, at what price, in what condition and under what terms. In practice, it is your main protection if something goes wrong after the deal is completed.
Despite its importance, many private transactions are closed without a contract or with an incomplete document that does not cover the essential points. The result is disputes that could have been avoided with five minutes of advance work.
In this article we explain what a car sale contract must include, how to draft it correctly and we provide you with a template you can adapt to your transaction.
What a car sale contract is for
The contract has one main function: to leave a written record of the terms of the sale so that both parties have a clear reference in the event of a disagreement.
For the seller, the contract is proof that they delivered the car in a certain condition, at an agreed price and on a specific date. If the buyer later makes a claim for a defect that was already disclosed in the contract, the seller has a document to back them up.
For the buyer, the contract proves ownership of the vehicle from the moment of signature, the agreed terms and the price paid. It is an essential document for processing the change of ownership with the DGT and for paying the Property Transfer Tax (ITP).
In addition, the contract is the document used by HM Revenue and Customs as a reference to check the declared price of the transaction. If the price in the contract is lower than the vehicle’s tax value, the tax authority may issue an additional assessment to the buyer.
The contract is essential for processing the change of ownership with the DGT. See the full guide to the procedures for selling a car in Spain.
Is it mandatory to sign a contract?
Strictly speaking, no. Spanish law recognises the validity of verbal agreements in private sales and purchases. Two people can verbally agree to sell a car, exchange money and keys, and the transaction is legal.
That said, selling a car without a written contract is one of the worst decisions you can make. Without a signed document, you have no way of proving the terms of the sale. If the buyer claims for a defect that did not exist, if the seller denies having received the money, or if any discrepancy arises about what was agreed, one person’s word against the other’s solves nothing.
The contract does not need to be drawn up before a notary or follow any specific legal format. A document signed by both parties, containing the essential details of the transaction, is enough. It can be written by hand, on a computer or using a standard template. What matters is that it is signed, dated and that both parties keep a copy.
When you sell to a dealership or through a professional platform, the buyer takes care of preparing the contractual documentation. In that case, your responsibility is to check that the details are correct before signing.
If you sell to a dealership or direct-purchase company, the buyer prepares the documentation. See what you should know before accepting an offer of this type.
What a vehicle sale contract must include
A complete car sale contract must include, at a minimum, the following elements.
Seller details. Full name, ID number, address and contact telephone number. If the seller is a company, the company’s tax details and the identity of the person signing on its behalf.
Buyer details. The same details as for the seller: name, ID number, address and telephone number.
Vehicle details. Make, model, trim level, chassis number (VIN), registration number, date of first registration, current mileage and colour. The chassis number is especially important because it is the vehicle’s unique and unchangeable identifier.
Sale price. The exact agreed amount, written in figures and in words to avoid ambiguity. If there is any additional payment (for extras, paperwork, admin), it should be itemised separately.
Payment method. How the payment has been or will be made: bank transfer, bank-guaranteed cheque or another method. If the payment is made in instalments, the dates and amounts of each instalment must be included. Remember that cash payments between private individuals are limited by law to 1,000 euros.
Date and place of the transaction. The exact date of signature of the contract and the place where it is formalised. The date is important because it marks the start of the legal deadlines (notification to the DGT, tax payment, etc.).
Declaration of the vehicle’s condition. A description of the car’s overall condition at the time of sale. It is advisable to include any known defects: dents, scratches, mechanical faults, wear and tear on components, pending MOT, etc. This declaration protects the seller against later claims for defects that were already disclosed.
Declaration of encumbrances. A clause in which the seller declares that the vehicle is free of encumbrances, seizures and charges, or in which the situation is detailed if there is any encumbrance (for example, active finance that will be cleared with the sale proceeds).
Signature of both parties. Handwritten signature of both the seller and the buyer on every page of the document. Each party must keep a signed copy.
How to draft the contract step by step
You do not need to be a solicitor to draft a car sale contract. Just follow a clear structure and make sure all the details are correct.
Step 1: Gather the details. Before you sit down to draft it, have both parties’ ID cards to hand, the vehicle registration document (where the car’s details appear) and the V5C/technical data sheet. Note down the vehicle’s current mileage.
Step 2: Use a template as a base. You can use the template we include further down in this article or any standard form. What matters is that it covers all the points we have described.
Step 3: Fill in the details accurately. Check that the names match the ID cards, that the registration number and chassis number are correct and that the price is the agreed one. An error in the details can cause problems with the DGT when processing the transfer.
Step 4: Describe the car’s condition. Be specific. Instead of "the car is in good condition", write "the vehicle has a 10 cm scratch on the rear bumper and normal wear on the driver’s seat upholstery". The more precise the description, the better protected both parties will be.
Step 5: Sign and distribute copies. Both parties sign every page. Each person keeps a complete, signed copy. If the document has several pages, it is advisable for both parties to sign or initial each one.
Car sale contract template
Below we include a basic template that you can adapt to your transaction. It is not a legally binding document as such, but an indicative template that covers the essential elements. If you prefer a ready-to-use template in Excel format, you can download Dealcar’s free sale and purchase contract template.
USED VEHICLE SALE AND PURCHASE CONTRACT
In [city], on [date].
PARTIES
On one side, as the SELLER: Mr/Ms [full name], with ID [number], and address at [full address].
On the other side, as the BUYER: Mr/Ms [full name], with ID [number], and address at [full address].
STATE
That the SELLER owns the vehicle with the following details: Make: [make] / Model: [model] / Trim: [trim] / Registration number: [registration] / Chassis number (VIN): [VIN] / Date of first registration: [date] / Current mileage: [km] / Colour: [colour] / Fuel: [type]
That both parties agree to formalise the sale and purchase of the aforementioned vehicle in accordance with the following:
CLAUSES
First. Subject. The SELLER sells and transfers to the BUYER ownership of the vehicle described, and the BUYER acquires it in its current condition.
Second. Price and payment method. The total sale price is [amount in figures] euros ([amount in words] euros), which the BUYER pays by [bank transfer / bank-guaranteed cheque] at the time this contract is signed.
Third. Condition of the vehicle. The SELLER declares that the vehicle is delivered in the following condition: [detailed description of the condition, including known defects]. The BUYER declares that they have inspected the vehicle and accepts it in its current condition.
Fourth. Encumbrances and charges. The SELLER declares that the vehicle is free of encumbrances, seizures, charges and ownership reservations. [If applicable: "Except for an ownership reservation in favour of [financial institution], which will be cancelled with the proceeds of this sale."]
Fifth. Seller’s obligations. The SELLER undertakes to notify the sale to the DGT within 10 calendar days and to hand over to the BUYER the vehicle documentation: registration document, technical data sheet and keys.
Sixth. Buyer’s obligations. The BUYER undertakes to process the change of ownership with the DGT and to pay the corresponding Property Transfer Tax (ITP).
Seventh. Costs. The transfer costs and the ITP shall be borne by the BUYER. [Optional: "Administrative fees will be split 50/50".]
And in witness whereof, both parties sign this contract in duplicate at the place and on the date stated above.
Special clauses depending on the type of sale
Depending on the situation, it may be necessary to add extra clauses to the basic template.
If the car has active finance. Add a clause detailing the outstanding debt, the finance company, the commitment to settle it and the deadline by which the ownership reservation will be removed. If you are in this situation, you should take a closer look at how to sell a financed car in order to manage the process correctly.
If payment is deferred. Include a clause detailing the dates and amounts of each instalment, the consequences of non-payment and whether the vehicle is handed over before or after full payment. It is advisable not to hand over the car until full payment has been received.
If the car is sold 'as is'. You can include an explicit exclusion-of-warranty clause in which the buyer acknowledges that they have inspected the vehicle and accepts its current condition. This protects the seller against claims for defects that were visible or already disclosed.
If the car’s MOT has expired. State this in the contract and agree who will take responsibility for and pay the cost of passing it. Usually it is the buyer, but it is worth putting it in writing.
Common mistakes in sale and purchase contracts
Not signing a contract. The most serious mistake and the easiest to avoid. Without a written contract, any later claim becomes a problem with no clear solution.
Incorrect or incomplete details. A misspelt name, a registration number with one digit changed or an incorrect chassis number can block the transfer process with the DGT. Check all the details against the original documents before signing.
Not declaring known defects. If the car has a dent, a mechanical fault or any problem you know about, declare it in the contract. If you do not and the buyer makes a claim, you may have legal problems over hidden defects. Transparency protects you.
Leaving the price blank or putting in a fictitious price. Some buyers and sellers agree to declare a lower price than the real one to pay less ITP. This is an illegal practice (tax fraud) and, if HM Revenue and Customs detects it, the consequences fall on both parties. Always declare the real price.
If you are not clear about the market price of your car, see how to find out what your car is worth before fixing the contract figure.
Not including the payment method. Without a record of how payment was made, it can be difficult to prove that payment was made. Always include the payment method and, if it is a bank transfer, the reference number or receipt.
Not keeping a signed copy. Each party must keep a copy of the contract signed by both parties. Keep it together with the payment receipt and the proof of notification to the DGT.
Dealcar: get your car valued for free and receive dealership offers
Dealcar gives you access to a free valuation tool that values your car in less than 30 seconds. You enter the registration number and vehicle details, and you receive a valuation based on real prices from completed sales in the market.
When you sell your car to a dealership in the Dealcar network, the professional takes care of all the contractual documentation, the transfer and the administrative formalities. You do not need to draft a contract or worry about clauses: the dealership manages everything and you simply sign and get paid.
100% free for you. No commissions or hidden costs.
You get paid before handing over the keys. The payment reaches your account by bank transfer before you hand over the car.
They collect the car from your home. The buying dealership collects the car from wherever you say.
No paperwork. The dealership handles the transfer, notification to the DGT and all the paperwork.
On average, 1,400 euros more than selling on Wallapop.
More than 12,000 cars sold and an average rating of 4.9 out of 5.
If you want to know how much your car is worth, use Dealcar’s free valuation tool.
Frequently asked questions
Do I need to take the contract to a notary?
No, it is not necessary. A private contract signed by both parties is fully legally valid in Spain for the sale and purchase of vehicles between private individuals. You would only need a notary if you wanted greater legal protection (a public deed), which is not usual in car transactions.
Can I use a contract downloaded from the internet?
Yes, as long as you check that it covers all the essential points we have described: party details, vehicle details, price, payment method, condition of the car, encumbrances and signatures. Dealcar offers a free sale and purchase contract template in Excel ready to fill in. Adapt any template to your specific situation.
What happens if the buyer does not process the transfer?
If you have notified the sale to the DGT within the 10 days following the transaction, fines and liabilities relating to the vehicle will no longer be issued in your name. If you have not made the notification, you will still appear as the registered keeper for administrative purposes. That is why it is essential always to notify the sale, regardless of what the buyer does.
Can the contract be used as proof for HM Revenue and Customs?
Yes. The sale and purchase contract is the document the buyer presents to HM Revenue and Customs to pay the ITP. The price stated in the contract is the one used as the tax reference, although HM Revenue and Customs may apply the vehicle’s tax value if it is higher.
What should I do if the buyer wants to pay in cash?
In Spain, cash payments between private individuals are limited to 1,000 euros. For higher amounts, payment must be made by bank transfer, bank-guaranteed cheque or another method that leaves documentary proof. Accepting cash above that limit is illegal and may lead to penalties.
Contents
What a car sale contract is for
Is it mandatory to sign a contract?
What a vehicle sale contract must include
How to draft the contract step by step
Car sale contract template
Special clauses depending on the type of sale
Common mistakes in sale and purchase contracts
Frequently asked questions
When you sell or buy a second-hand car between private individuals, the sale and purchase contract is the document that puts in writing what both parties have agreed: which car is being sold, at what price, in what condition and under what terms. In practice, it is your main protection if something goes wrong after the deal is completed.
Despite its importance, many private transactions are closed without a contract or with an incomplete document that does not cover the essential points. The result is disputes that could have been avoided with five minutes of advance work.
In this article we explain what a car sale contract must include, how to draft it correctly and we provide you with a template you can adapt to your transaction.
What a car sale contract is for
The contract has one main function: to leave a written record of the terms of the sale so that both parties have a clear reference in the event of a disagreement.
For the seller, the contract is proof that they delivered the car in a certain condition, at an agreed price and on a specific date. If the buyer later makes a claim for a defect that was already disclosed in the contract, the seller has a document to back them up.
For the buyer, the contract proves ownership of the vehicle from the moment of signature, the agreed terms and the price paid. It is an essential document for processing the change of ownership with the DGT and for paying the Property Transfer Tax (ITP).
In addition, the contract is the document used by HM Revenue and Customs as a reference to check the declared price of the transaction. If the price in the contract is lower than the vehicle’s tax value, the tax authority may issue an additional assessment to the buyer.
The contract is essential for processing the change of ownership with the DGT. See the full guide to the procedures for selling a car in Spain.
Is it mandatory to sign a contract?
Strictly speaking, no. Spanish law recognises the validity of verbal agreements in private sales and purchases. Two people can verbally agree to sell a car, exchange money and keys, and the transaction is legal.
That said, selling a car without a written contract is one of the worst decisions you can make. Without a signed document, you have no way of proving the terms of the sale. If the buyer claims for a defect that did not exist, if the seller denies having received the money, or if any discrepancy arises about what was agreed, one person’s word against the other’s solves nothing.
The contract does not need to be drawn up before a notary or follow any specific legal format. A document signed by both parties, containing the essential details of the transaction, is enough. It can be written by hand, on a computer or using a standard template. What matters is that it is signed, dated and that both parties keep a copy.
When you sell to a dealership or through a professional platform, the buyer takes care of preparing the contractual documentation. In that case, your responsibility is to check that the details are correct before signing.
If you sell to a dealership or direct-purchase company, the buyer prepares the documentation. See what you should know before accepting an offer of this type.
What a vehicle sale contract must include
A complete car sale contract must include, at a minimum, the following elements.
Seller details. Full name, ID number, address and contact telephone number. If the seller is a company, the company’s tax details and the identity of the person signing on its behalf.
Buyer details. The same details as for the seller: name, ID number, address and telephone number.
Vehicle details. Make, model, trim level, chassis number (VIN), registration number, date of first registration, current mileage and colour. The chassis number is especially important because it is the vehicle’s unique and unchangeable identifier.
Sale price. The exact agreed amount, written in figures and in words to avoid ambiguity. If there is any additional payment (for extras, paperwork, admin), it should be itemised separately.
Payment method. How the payment has been or will be made: bank transfer, bank-guaranteed cheque or another method. If the payment is made in instalments, the dates and amounts of each instalment must be included. Remember that cash payments between private individuals are limited by law to 1,000 euros.
Date and place of the transaction. The exact date of signature of the contract and the place where it is formalised. The date is important because it marks the start of the legal deadlines (notification to the DGT, tax payment, etc.).
Declaration of the vehicle’s condition. A description of the car’s overall condition at the time of sale. It is advisable to include any known defects: dents, scratches, mechanical faults, wear and tear on components, pending MOT, etc. This declaration protects the seller against later claims for defects that were already disclosed.
Declaration of encumbrances. A clause in which the seller declares that the vehicle is free of encumbrances, seizures and charges, or in which the situation is detailed if there is any encumbrance (for example, active finance that will be cleared with the sale proceeds).
Signature of both parties. Handwritten signature of both the seller and the buyer on every page of the document. Each party must keep a signed copy.
How to draft the contract step by step
You do not need to be a solicitor to draft a car sale contract. Just follow a clear structure and make sure all the details are correct.
Step 1: Gather the details. Before you sit down to draft it, have both parties’ ID cards to hand, the vehicle registration document (where the car’s details appear) and the V5C/technical data sheet. Note down the vehicle’s current mileage.
Step 2: Use a template as a base. You can use the template we include further down in this article or any standard form. What matters is that it covers all the points we have described.
Step 3: Fill in the details accurately. Check that the names match the ID cards, that the registration number and chassis number are correct and that the price is the agreed one. An error in the details can cause problems with the DGT when processing the transfer.
Step 4: Describe the car’s condition. Be specific. Instead of "the car is in good condition", write "the vehicle has a 10 cm scratch on the rear bumper and normal wear on the driver’s seat upholstery". The more precise the description, the better protected both parties will be.
Step 5: Sign and distribute copies. Both parties sign every page. Each person keeps a complete, signed copy. If the document has several pages, it is advisable for both parties to sign or initial each one.
Car sale contract template
Below we include a basic template that you can adapt to your transaction. It is not a legally binding document as such, but an indicative template that covers the essential elements. If you prefer a ready-to-use template in Excel format, you can download Dealcar’s free sale and purchase contract template.
USED VEHICLE SALE AND PURCHASE CONTRACT
In [city], on [date].
PARTIES
On one side, as the SELLER: Mr/Ms [full name], with ID [number], and address at [full address].
On the other side, as the BUYER: Mr/Ms [full name], with ID [number], and address at [full address].
STATE
That the SELLER owns the vehicle with the following details: Make: [make] / Model: [model] / Trim: [trim] / Registration number: [registration] / Chassis number (VIN): [VIN] / Date of first registration: [date] / Current mileage: [km] / Colour: [colour] / Fuel: [type]
That both parties agree to formalise the sale and purchase of the aforementioned vehicle in accordance with the following:
CLAUSES
First. Subject. The SELLER sells and transfers to the BUYER ownership of the vehicle described, and the BUYER acquires it in its current condition.
Second. Price and payment method. The total sale price is [amount in figures] euros ([amount in words] euros), which the BUYER pays by [bank transfer / bank-guaranteed cheque] at the time this contract is signed.
Third. Condition of the vehicle. The SELLER declares that the vehicle is delivered in the following condition: [detailed description of the condition, including known defects]. The BUYER declares that they have inspected the vehicle and accepts it in its current condition.
Fourth. Encumbrances and charges. The SELLER declares that the vehicle is free of encumbrances, seizures, charges and ownership reservations. [If applicable: "Except for an ownership reservation in favour of [financial institution], which will be cancelled with the proceeds of this sale."]
Fifth. Seller’s obligations. The SELLER undertakes to notify the sale to the DGT within 10 calendar days and to hand over to the BUYER the vehicle documentation: registration document, technical data sheet and keys.
Sixth. Buyer’s obligations. The BUYER undertakes to process the change of ownership with the DGT and to pay the corresponding Property Transfer Tax (ITP).
Seventh. Costs. The transfer costs and the ITP shall be borne by the BUYER. [Optional: "Administrative fees will be split 50/50".]
And in witness whereof, both parties sign this contract in duplicate at the place and on the date stated above.
Special clauses depending on the type of sale
Depending on the situation, it may be necessary to add extra clauses to the basic template.
If the car has active finance. Add a clause detailing the outstanding debt, the finance company, the commitment to settle it and the deadline by which the ownership reservation will be removed. If you are in this situation, you should take a closer look at how to sell a financed car in order to manage the process correctly.
If payment is deferred. Include a clause detailing the dates and amounts of each instalment, the consequences of non-payment and whether the vehicle is handed over before or after full payment. It is advisable not to hand over the car until full payment has been received.
If the car is sold 'as is'. You can include an explicit exclusion-of-warranty clause in which the buyer acknowledges that they have inspected the vehicle and accepts its current condition. This protects the seller against claims for defects that were visible or already disclosed.
If the car’s MOT has expired. State this in the contract and agree who will take responsibility for and pay the cost of passing it. Usually it is the buyer, but it is worth putting it in writing.
Common mistakes in sale and purchase contracts
Not signing a contract. The most serious mistake and the easiest to avoid. Without a written contract, any later claim becomes a problem with no clear solution.
Incorrect or incomplete details. A misspelt name, a registration number with one digit changed or an incorrect chassis number can block the transfer process with the DGT. Check all the details against the original documents before signing.
Not declaring known defects. If the car has a dent, a mechanical fault or any problem you know about, declare it in the contract. If you do not and the buyer makes a claim, you may have legal problems over hidden defects. Transparency protects you.
Leaving the price blank or putting in a fictitious price. Some buyers and sellers agree to declare a lower price than the real one to pay less ITP. This is an illegal practice (tax fraud) and, if HM Revenue and Customs detects it, the consequences fall on both parties. Always declare the real price.
If you are not clear about the market price of your car, see how to find out what your car is worth before fixing the contract figure.
Not including the payment method. Without a record of how payment was made, it can be difficult to prove that payment was made. Always include the payment method and, if it is a bank transfer, the reference number or receipt.
Not keeping a signed copy. Each party must keep a copy of the contract signed by both parties. Keep it together with the payment receipt and the proof of notification to the DGT.
Dealcar: get your car valued for free and receive dealership offers
Dealcar gives you access to a free valuation tool that values your car in less than 30 seconds. You enter the registration number and vehicle details, and you receive a valuation based on real prices from completed sales in the market.
When you sell your car to a dealership in the Dealcar network, the professional takes care of all the contractual documentation, the transfer and the administrative formalities. You do not need to draft a contract or worry about clauses: the dealership manages everything and you simply sign and get paid.
100% free for you. No commissions or hidden costs.
You get paid before handing over the keys. The payment reaches your account by bank transfer before you hand over the car.
They collect the car from your home. The buying dealership collects the car from wherever you say.
No paperwork. The dealership handles the transfer, notification to the DGT and all the paperwork.
On average, 1,400 euros more than selling on Wallapop.
More than 12,000 cars sold and an average rating of 4.9 out of 5.
If you want to know how much your car is worth, use Dealcar’s free valuation tool.
Frequently asked questions
Do I need to take the contract to a notary?
No, it is not necessary. A private contract signed by both parties is fully legally valid in Spain for the sale and purchase of vehicles between private individuals. You would only need a notary if you wanted greater legal protection (a public deed), which is not usual in car transactions.
Can I use a contract downloaded from the internet?
Yes, as long as you check that it covers all the essential points we have described: party details, vehicle details, price, payment method, condition of the car, encumbrances and signatures. Dealcar offers a free sale and purchase contract template in Excel ready to fill in. Adapt any template to your specific situation.
What happens if the buyer does not process the transfer?
If you have notified the sale to the DGT within the 10 days following the transaction, fines and liabilities relating to the vehicle will no longer be issued in your name. If you have not made the notification, you will still appear as the registered keeper for administrative purposes. That is why it is essential always to notify the sale, regardless of what the buyer does.
Can the contract be used as proof for HM Revenue and Customs?
Yes. The sale and purchase contract is the document the buyer presents to HM Revenue and Customs to pay the ITP. The price stated in the contract is the one used as the tax reference, although HM Revenue and Customs may apply the vehicle’s tax value if it is higher.
What should I do if the buyer wants to pay in cash?
In Spain, cash payments between private individuals are limited to 1,000 euros. For higher amounts, payment must be made by bank transfer, bank-guaranteed cheque or another method that leaves documentary proof. Accepting cash above that limit is illegal and may lead to penalties.
