Car Payment Agreement Letter

When someone is going to buy or sell a car, usually they will make an agreement to the owner or buyer of the car written on paper, this is also a form of formal law and so that there is no misunderstanding between the two parties.

The sale and purchase of a car can also be used as a receipt as proof of validation that the first party has given the car to the second party as the buyer. And through this letter both parties will not incur any loss to each other.  

Functions of the Car Sale and Purchase Agreement

  • Guarantee that the first party in the letter is the owner of the car being traded.
  • Ensuring that there is a good and correct car payment method so that there will be no fraud in car buying and selling transactions
  • Ensure that there are no complaints that are outside the written agreement.
  • Make sure that the specifications and condition of the car are in accordance with the mutually agreed agreement
  • Confirm that the seller actually transfers the cars and trucks sold to the buyer legally.


Information that Must Be Included in the Car Sale and Purchase Agreement

A car sale and purchase agreement must be owned for clarity of transactions between the two parties. For this reason, complete personal data to related matters that you can

  • Identity and personal data of the first party (car seller).
  • Identity and personal data of the second party (car buyer).
  • Personality and detailed specifications of the car to be sold.
  • A statement knowingly and without coercion in the process of signing a car sale and purchase agreement.
  • An explanation related to the agreement between the two parties if there are points in the agreement that cannot be fulfilled.
  • Detailed explanation of the amount of fees paid.
  • Detailed explanation related to the process for the car name transfer.


Sample of Car Payment Agreement Letter

Selling a car is not an easy thing to do for everyone. Especially if it’s your first time selling a car. So, you should prepare well the documents needed as proof of ownership. Well, here’s an example of making a car sale and purchase agreement that can be prepared. Car Payment Agreement Letter sample DOWNLOAD  



The first party sells 1 car unit (CAR BRAND) to the second party. And the second party has agreed to buy the car at a price of (CAR PRICE) with the following specifications: Production year, Police number, Chassis number, Machine number, Fuel, Color, Item Condition.


The transfer of ownership along with the letter will be submitted if the car has been paid in full. All profits and losses as well as risks on the car, from now on will be the responsibility of the second party


The second party applies the method of payment with terms and conditions that have also been agreed upon by the first party, namely:

Verse 1

Cash payment of to be paid by the second party after the signing of this agreement.

Verse 2

Payment of (Rp. AMOUNT IN NOMINAL) (TOTAL IN LETTERS) in the form of Bank Bilyet Giro _________ _________ - number: ( _________ ), due date ( _____ date, month, and year _____).


During use and maintenance, the second party is fully responsible for the vehicle. In the event of damage, the second Party is required to repair or incur costs for the damage suffered by the Vehicle in connection with its use. In the event of loss, the second party is still required to pay the lack of payment.


If it turns out that the second party's bilyet giro cannot be cashed according to the date stated on it, the second party is considered late in paying and is subject to sanctions in the form of fines for the late payment.


All tax burdens, as well as the transfer of the name of the car, will be fully borne by the second party. And the costs incurred for making this agreement are borne by the second party.


Matters that have not been stated in this agreement will be resolved amicably or through deliberation for consensus by both parties.


In the event of a dispute and cannot be resolved amicably or through deliberation to reach a consensus, both parties agree to settle it legally and both parties have agreed to choose a common and permanent residence at ( _______ Registrar's Office of the District Court _______ ).


This agreement letter is made in 2 (two) copies with sufficient materials with the same legal force which are held by the first Party and the second Party respectively and shall come into force as of the signing of the two parties.  


The Main Purpose Of The Car Purchase Agreement

To avoid fraud for both parties in the process of buying and selling cars. As a guarantee from the selling party that the condition of the car is still good and in accordance with the agreement and both parties are equally benefited too.

A letter of agreement for the sale of a car is included in the agreement Abstract-Agreement on the sale and purchase of used motor vehicles is included in a formal agreement, meaning that the law has determined that the parties involved in the sale and purchase agreement must follow all the provisions that have been determined.

Due To the Law of Used Car Sale Buying Agreements That Contains Hidden Disabilities

In a used car sale and purchase agreement, of course there will be the possibility of the object being promised contains defects hidden because the object is not a new car that was issued by the dealer, but has been used by the owner previously.

The hidden defect is if it’s against the item according to the buyer’s judgment not as intended or lower than the intended thing so as to reduce value to him and if the buyer knows it probably won’t buy the item or buy at a price below the price which are actually. The definition of hidden defects is distinguished in two ways Positive Hidden Defects.

The hidden flaw that positive, as seen in article 1504, 1506 up to Article 1510 of the Civil Code. Intent of positive hidden defects are when defects the item was not notified by the seller to the buyer or the buyer does not know that the goods it is defective. Against positive hidden defects it is the seller’s obligation to endure it.

Negative Hidden Defects

The hidden flaw that negative, as seen in article 1505 of the Criminal Code Civil. The meaning of negative hidden defects is If the item is defective, the seller is notified to the buyer or the buyer knows that the goods it is defective. Against negative hidden defects it is the buyer’s obligation to accept the risk.

Legal Consequences Of Car Payment Agreement Letter

In an agreement binding on the parties, Of course, there will be legal consequences for the parties involved agreed in the agreement. Some of the legal consequences in the agreement include:

1. Legal consequences of the agreement:

  1. a) The agreement is valid as a law;
  2. b) The agreement cannot be withdrawn unilaterally;
  3. c) Implementation of the agreement in good faith.

2. Legal consequences of an invalid agreement:

Cancellation agreement (Subjective Terms):

This means that one of the parties can apply to the court to cancel the agreement agreed upon, but if the parties no one objected, then the agreement remains considered valid. Cancellations can be requested in grace period of 5 years (Article 1454 of the Civil Code).

Car Payment Agreement Letter that is null and void (Objective Terms):

This means that from the beginning it was considered never existed an agreement or engagement is born, without must be overturned in court.  


Conclusion of Car Payment Agreement Letter

1. The validity of an agreement is regulated in article 1320 The Civil Code, which states that there are 4 (four) conditions the validity of an agreement, namely agreement, skill, certain object and a lawful cause. In implementation of a used car sale and purchase agreement contains hidden defects has violated the terms the validity of an agreement.

That is, it does not meet the conditions a lawful cause in terms of the validity of the agreement where the object of the agreement contains defects. So that it is against the rules legislation in accordance with the provisions of Article 1337 Civil Code, so that the agreement can be declared invalid (legally invalid).

2. In the used car sale and purchase agreement contains hidden defects. Of course causing the agreement is invalid (legally invalid). And cause legal consequences of the agreement become null and void.

Because it does not meet the requirements objective of the legal terms of an agreement in accordance with provisions of Article 1320 of the Civil Code.


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