What is an “as is” car sale contract?
Learn more about “as is” contracts, and how private sellers or dealerships may use them when selling used cars.
If you’re in the market for a car, you might have come across the phrase “as is.” These two small words are common in car sale contracts and have legal implications, so it’s important to understand what they mean before you sign on the dotted line.
What does “as is” mean?
The legal term “as is” means that you are purchasing a car — or any item — in its current condition at the time of the sale. In addition, it means the car is being sold without any warranty coverage. As the buyer, you accept that repairs may be necessary now or in the future, and that the seller is not responsible for making or paying for these repairs.
For example, let’s say you find an old sports car you want badly and agree to purchase “as is.” Six months later, if the engine needs to be replaced or the clutch has failed, the entire repair costs must come out of your own pocket, not the seller’s.
The majority of these types of sales go through private sellers, although some car dealers may choose to sell this way too.
Why purchase a car “as is”?
It may seem like an “as is” contract only serves to get the seller off the hook for any repairs, but there are also benefits for the buyer with this type of contract.
When you buy a used car this way, it is usually significantly less expensive than purchasing a certified pre-owned vehicle that comes with a warranty. “As is” doesn’t necessarily mean that a car has a lot of problems — just that the seller isn’t willing to make any further guarantees about its condition.
Keep in mind that private sales may be less regulated than a sale that goes through a dealership, so make sure you thoroughly understand what you’re purchasing when you buy a car “as is.” In addition to the due diligence you should expect to do with any used car, be sure to factor in additional likely repair or maintenance costs when deciding whether you’re really getting a great deal.