Car Sale Agreement

No, a car sale agreement in Croatia does not have to be certified by a notary public – a written contract with the signatures of both parties is enough. This is an important difference from the sale of real estate, which does require certification. To transfer ownership of the vehicle at the MUP (Ministry of the Interior), a power of attorney for deregistration or the seller’s presence in person is enough, together with the sale agreement. The contract serves as evidence of the transaction and as the basis for transferring ownership in the vehicle records. The written form is recommended for legal certainty and for proving the terms of the sale. Certification of signatures can give extra security if the parties want it, but it is not required by law. It is important that the contract contains all the essential elements – the vehicle details, the price, the method of payment and statements about the condition of the vehicle.

A car sale agreement must contain the details of the contracting parties – name, surname, OIB (personal identification number) and address of the seller and the buyer. The vehicle details include the make, model, year of manufacture, chassis number (VIN), registration plates and the mileage. The purchase price must be stated clearly, together with the method and deadline for payment. A statement by the seller about ownership – that he or she is the sole owner and that the vehicle is free of encumbrances and not the subject of a dispute. A statement about the condition of the vehicle – known faults and defects that the buyer accepts. The date and place of handover of the vehicle. The seller’s duty to hand over the documentation – the registration certificate, the keys and the service book. The signatures of both parties and the date the contract is concluded. Our template contains all of these elements and further useful clauses protecting both parties.

At least two counterparts of the car sale agreement are recommended – one for each party. In practice three or four counterparts are often prepared, because one may be needed to transfer ownership at the MUP (Ministry of the Interior). Every counterpart must be signed by both parties in order to have evidential force. The seller keeps a counterpart as proof that the vehicle has been sold and on what terms. The buyer keeps a counterpart for the transfer of ownership and for any future need to prove the purchase. If the purchase is financed by leasing or a loan, the bank or leasing company will also require a counterpart. The MUP does not retain a counterpart after the transfer of ownership, but may ask to inspect it. We advise keeping the contract permanently, because it may be needed to prove the history of the vehicle or in the event of hidden defects.

Buying a car that is under a loan or leasing arrangement is possible, but it calls for particular care and coordination with the financial institution. While the loan is unpaid, the bank or leasing company holds security over the vehicle and is formally recorded as the owner or co-owner in the registration certificate. The seller must obtain the bank’s consent to the sale and settle the remaining debt out of the purchase price. The safe procedure is for the buyer to pay part of the price directly to the bank to close the loan, and the rest to the seller. Once the bank receives payment it issues a deletion consent (brisovno očitovanje) that removes the security. Only after that can ownership be transferred to the buyer free of encumbrances. Never pay the full price to the seller before the loan has been dealt with. Carrying out the transaction in the presence of a bank representative, or using an escrow account, is recommended.