Vehicle Payment Plan Agreement

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A vehicle payment plan agreement is a contract between a buyer and seller of an automobile who agree to incremental payments. In most cases, the buyer agrees to pay an amount upfront, known as the ‘down payment’, an interest rate (%), and the term of the payment period.

Upon signing, a Bill of Sale should be completed in regard to the vehicle being purchased.

Common Terms

  • Co-Signer – Also known as a “Guarantor” and is someone that guarantees the payment of the loan.
  • Down-Payment – Deposit paid at the start of the payment agreement. Recommended to be 10% to 20% of the purchase price.
  • Monthly Payment – Payment owed by the borrower on a monthly basis.
  • Term – Length of the payment period. The average is 36 to 60 Months.
  • Interest Rate – The cost of borrowing money. Variable-rate that is dependent on the credit score of the borrower (View Current Rates).

Table of Contents

Vehicle Payment Calculators (3)

  1. Cars.com
  2. Bank of America
  3. NerdWallet

Where to Apply for an Auto Loan

The best place to apply is to find the lender willing to give the best rate. This is often online where your profile and terms will be shown to banks nationwide. The rate will be determined by two (2) factors: Borrower’s Credit Score and the Down-Payment. The higher of both items and better the chance of a lower interest rate.

Best Websites to Apply (3)

  1. NerdWallet – Get a preview of up to 10 other financial institutions and what they offer.
  2. TheSimpleDollar.com – Breaks down the seven (7) most popular auto loan offers.
  3. Interest.com – Compares the top six (6) auto loan offers.

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