Hi there. Whether you've been approved for the CVA program grant are in the process of completing your application, or just want to expand your knowledge about purchase agreements. You've come to the right place. We are going to cover a part of the purchasing process that isn't really talked about, which is understanding the components of the purchase agreement itself. Purchasing a car is a big financial commitment, so I'd like to take this time to review the sample agreement with you, to help you understand the ins and outs of a purchase agreement before signing your own. I will be covering the highlighted sections of this agreement, so let's get started.
Next the year. Please note that the car cannot be more than 8 model years old. Then the make and the model. The odometer or miles a car must have no more than 75,000 original miles in order to qualify for the program. Lastly, the car identification number, also known as the VIN. If you finance your car, the federal truth in lending disclosure section will list the loan information, such as the interest rate, which cannot be higher than 12% to comply with the CVA Program Policies. This rate will affect your monthly payments. The lower the rate, the more of your monthly payment goes towards the principal balance.
The finance charge is the cost of having the loan for the scheduled term, if there is no prepayment penalty, paying your loan off faster will reduce this charge. Amount finance is the principal amount you will be borrowing from the lender. This is also referred to as the principle balance. Total of payment is the monthly payment times, the number of payments. Total sales price includes the price of the car finance, charge taxes, indoor fees, trade in rebates, cash down payments, and all other down payments as well. Loan term and payment schedule is the number of minimum payments it will take to pay off your loan in full.
Further breakdown is available in the down-payment calculation. Sections 2 - 4 detailed additional fees. Such as; amount paid to public officials, amount paid to insurance companies and States, emission certification fee, or State emissions exemption fee. Now, line 5 will have the subtotal of your car. This is the cost after taxes and additional fees have been included. This will take us to line 6, where you'll find the total down-payment section. Line 6a is the agreed trade-in value, which lists information on a car being traded-in along with the agreed upon value.
Scrolling down to page two, you will see underlying '1a', the cash price of motor car and accessories. Which is the sticker, or agreed upon price. With most dealerships, this section is negotiable. Sections 1d - 1i, and 1k - 1n is designated for optional services and sales tax on taxable items. So, be sure to double-check this section, and speak with your sales representative regarding additions to your agreement. Some optional services include; gap or guaranteed asset protection, car modification packages, maintenance packages, warranties, or other services. Point 1j, prior credit or lease balance paid by seller, describes outstanding balances or leases of the cars being traded.
Starting with the basics. You will see yours, and the dealership's information on the top row. The buyer refers to the program participant, and the creditor seller refers to the approved dealership. Below the buyer and seller section, you'll find information that identifies the car being purchased. Starting with whether or not the car is new or used. If the car is used, we will need a car history report, assigned, and dated multi-point inspection from the dealership.
Lastly, before signing a car purchase agreement, you wanna thoroughly go over each section, make sure to ask as many questions as needed to ensure you are fully understanding the terms of agreement presented to you. Keep in mind, agreements must be dated and signed prior to the participants grant expiration date, and after they've been approved for the VC program grant. Agreements dated before the approval, or after the expiration date will not be accepted. And that completes the car purchase agreement overview in relation to our grant. We hope you can take this information and apply it to your car buying experiences.
Line 6b will list the remaining balance of the loan of the car being traded. This may be zero if the car is paid off. 6c is where you'll find the net trade and value, which is the remaining balance after all previous loans are paid. If the remaining loan is larger than the trade-in value, this will be a negative amount. This value will be included in the down-payment. If you are not trading in a car, the above three sections will be blank. 6d is the deferred down payment. This refers to down-payments that will be made after the time of purchase. But are not considered rebates, this is where the CV program grant should be included.
6e will list any manufacturer rebates. Be sure to ask the dealer if these are available for the car you were purchasing. 6f, this space is available for all other down-payment scenarios. 6g will list any additional down-payment amount in the form of cash check or credit card. The total down payment is the amount after adding line 6c - 6g. There may be an arbitration clause on your agreement. This means that in the event of a claim or dispute, you won't be able to go to court, or have a jury trial, but rather deal with the dealer themselves.