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 for an “as is” car sale agreement.
What does the “as is” in an “as is” car sale agreement 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.
What to look for with an “as is” car sale contract.
When you’re thinking about buying an “as is” car, it’s important to understand how to budget for a car properly. This knowledge will help you make a smart choice and avoid any unexpected surprises when talking to the seller.
In addition to this, you need to be aware of the nuances of an “as is” car sale contract, which could lead to unexpected challenges. Here’s a list of what to look for with an “as is” car sale contract:
- No warranty. One important detail of the concept of an “as is” car sale is the absence of a warranty. This means that once the sale is finalized, the buyer assumes all responsibility for any repairs or issues.
- Thorough inspection. Because there is no warranty, it’s very important to inspect the vehicle you’re looking to buy before finalizing the purchase. Consider hiring a trusted mechanic to assess the car’s condition.
- Vehicle history report. In order to understand the car’s past, you should consider requesting a vehicle history report. This will not only provide details about past accidents, title information, and more, but it will also help you understand the durability and current condition of the car.
- State laws. Become familiar with state laws related to “as is” car sales. Some states have specific protections for buyers, while other states may favor the seller.
- Paperwork and title. Always make sure that the car sale’s paperwork is in order. The title should be clear of any liens and should be transferred to you once the sale is completed.
Why enter into an “as is” car sale agreement?
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’s 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.
Benefits of an “as is” car sale contract for both parties.
“As is” car sale contracts aren’t just a standard agreement — they come with benefits for both the seller and the buyer. Here’s a list of the advantages for each party:
For sellers:
- Sale simplicity. When selling a car “as is,” sellers can avoid the complexities of guaranteeing the car’s condition or dealing with claims related to the car’s performance.
- Faster process. Since there is no need for extended warranties, the sales process is usually quicker and simpler.
- Minimized liability. With an “as is” car sale agreement, the seller is protected from future claims or liabilities when it comes to the vehicle’s condition after the sale is completed.
- Price flexibility. The “as is” nature of the sale can provide room for negotiating the price.
For buyers:
- Lower purchase rate. “As is” cars come at a lower price since buyers take on the risk of future repairs.
- Transparency. When you do a proper vehicle inspection and a clear “as is” car sale contract, you can have a transparent understanding of what you’re getting into.
- Flexibility. Buyers have the flexibility to decide how they want to handle any potential repairs.
Tools to sign an “as is” car sale contract.
Whether you’re on the buying or selling end of used cars, you can easily write contract agreements, upload them, and collect legally binding signatures with Adobe Acrobat.
