Purchasing a vehicle is a significant transaction, and understanding every aspect of the deal is crucial for buyers. One of the most important documents in this process is the buyer’s order. This document, often a precursor to the final sales contract, outlines the terms of the vehicle sale agreement between a dealership and a buyer. For anyone looking to buy a car, especially in states with specific regulations like Virginia, grasping what a buyer’s order entails is essential.
A buyer’s order is essentially a detailed receipt and agreement that a car dealership prepares for every vehicle sale or exchange. It’s more than just a price quote; it’s a legally significant document that lists all the key details of the transaction. Dealerships are typically required to provide a copy of the buyer’s order form to potential purchasers during the negotiation phase, even before a final sales agreement is reached. This allows buyers to review all terms and conditions transparently. The original, completed buyer’s order is then kept by the dealer for record-keeping, while a duplicate is given to the purchaser at the time of sale.
Several key components must be included in a buyer’s order to ensure clarity and legality. These components protect both the buyer and the seller by documenting every detail of the sale. Let’s break down the essential elements:
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Buyer and Seller Information: The buyer’s order must clearly state the full name and address of the person buying or trading in the vehicle. Similarly, it must include the name and address of the motor vehicle dealership conducting the sale or trade. This ensures that all parties involved are clearly identified.
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Date of Transaction: The date on which the sale or trade occurs is a critical piece of information. This date serves as a reference point for all aspects of the transaction, including warranties, return policies if applicable, and legal timelines.
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Vehicle Description: Detailed information about the vehicle being sold is mandatory. This includes the make, model year, Vehicle Identification Number (VIN), and body style. Accurate vehicle identification is crucial to avoid any disputes about which vehicle is actually being purchased.
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Sale Price: The buyer’s order must explicitly state the agreed-upon sale price of the vehicle. This is the base cost before any additional charges, taxes, or fees are applied.
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Cash Deposit Details: If the buyer provides a cash deposit, the amount must be recorded in the buyer’s order. This protects the buyer by acknowledging their upfront payment and ensures accurate accounting.
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Trade-In Vehicle Information: In cases where a buyer is trading in a vehicle, the buyer’s order must include a description of the trade-in vehicle. This description should be as detailed as the description of the vehicle being sold, including make, model year, VIN, and body style. Crucially, the amount credited to the buyer for the trade-in must also be clearly stated.
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Taxes and Fees: A transparent breakdown of all applicable taxes and fees is a vital part of the buyer’s order. This includes sales and use tax, title fee, registration fee, online systems filing fees, or any other legally mandated fees for which the buyer is responsible and that the dealer collects. Each tax and fee must be individually listed and clearly identified to avoid confusion.
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Net Balance Due: After factoring in the sale price, deposit, trade-in credit, and all applicable taxes and fees, the buyer’s order must state the net balance due at settlement. This is the final amount the buyer needs to pay to complete the purchase.
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Processing Fee Disclosure: If a dealership charges a processing fee, it must be designated as “processing fee” and the exact amount must be listed. It’s important to note what this processing fee covers. Typically, it includes obtaining title and license plates for the purchaser but should not include separate fees like “purchaser’s online systems filing fee” or “dealer’s manual transaction fee,” which should be listed separately if applicable.
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Dealer’s Business License Tax: Some dealerships might include a “dealer’s business license tax.” If this is the case, it needs to be itemized and the amount charged must be specified in the buyer’s order.
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Financing Contingency Notice: This is a very important clause, especially when financing is involved. If the vehicle purchase is conditional on dealer-arranged financing, the buyer’s order must include a specific notice printed in bold, 10-point type or larger. This notice clearly explains that if the financing is not approved, the sale can be cancelled. It outlines the buyer’s rights and responsibilities in such a scenario, including the return of the vehicle and the refund of any down payment or trade-in, as well as the dealer’s rights if the vehicle is not returned.
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Used Vehicle Disclosure: For sales of used motor vehicles, the buyer’s order must include a disclosure as required by specific state laws. This often relates to the vehicle’s history, condition, and any known issues.
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No Liability Insurance Notice: Except for trailers and travel trailers, if the vehicle transaction does not include a motor vehicle liability insurance policy, the buyer’s order must be stamped or marked with a bold, 18-point type or larger statement: “No Liability Insurance Included.” This is a critical warning for buyers to ensure they obtain necessary insurance coverage.
In essence, a completed buyer’s order, once signed by both the buyer and seller, can serve as a legally binding bill of sale. This underscores the importance of carefully reviewing and understanding every detail before signing.
An example of a Buyer’s Order form, highlighting the structured format and necessary fields for vehicle sale agreements.
Dealerships also have obligations related to buyer’s orders. They are generally required to have their buyer’s order form approved by the relevant state board. Dealers must file their buyer’s order form, which states their processing fee amount, with their original license application. Furthermore, if a processing fee is charged, dealerships must disclose this fact clearly and conspicuously. This disclosure is typically done through a sign in the public sales area, of a minimum size, with easily readable print, in a form approved by the state board.
There are specific situations where additional disclosures are required. For instance, if a new motor vehicle has accumulated more than 750 miles – perhaps as a demonstrator or due to prior delivery to a customer who returned it without taking title – it can still be sold as new, but only if a specific written disclosure is provided on the buyer’s order. This disclosure must be in 10-point type or larger on the buyer’s order or in a separate document (in 14-point type or larger), signed by the purchaser, acknowledging the vehicle’s mileage and prior use.
It’s also important to note that certain types of vehicles are often exempt from these buyer’s order requirements. These typically include tractor trucks, trucks with a high gross vehicle weight rating (e.g., 16,000 pounds or more), and semitrailers, which are often subject to different commercial vehicle regulations.
A detailed view of sections within a Buyer’s Order, showing itemized charges and vehicle information fields.
In conclusion, the buyer’s order is a vital document in the vehicle purchasing process. It serves as a comprehensive agreement protecting both buyers and sellers by clearly outlining the terms of the sale. For buyers, thoroughly reviewing and understanding every section of the buyer’s order before signing is paramount. It ensures transparency, helps prevent misunderstandings, and provides a solid foundation for a successful vehicle purchase. Whether you are a first-time car buyer or experienced, being familiar with the components and implications of a buyer’s order is an essential step in navigating the car buying landscape confidently.
