Car Note Agreement Template for Canada

The Car Note Agreement serves as the primary financing document for vehicle purchases in Canada, establishing legally binding terms between lenders and borrowers. It is used when a purchaser requires financing to acquire a vehicle and the lender needs to secure their interest in the vehicle as collateral. The agreement must comply with various Canadian federal and provincial regulations, including the Personal Property Security Act (PPSA), Interest Act, and provincial Consumer Protection Acts. It typically includes comprehensive details about the vehicle, financing terms, security interests, insurance requirements, and the rights and obligations of all parties. This document is essential for protecting both the lender's security interest and the borrower's rights under Canadian law, while ensuring all mandatory disclosures and regulatory requirements are met.

1. Parties: Identifies and provides full legal names and addresses of the lender and borrower

2. Background: Establishes the context of the agreement, including the borrower's desire to purchase the vehicle and the lender's willingness to provide financing

3. Definitions: Defines key terms used throughout the agreement including 'Vehicle', 'Principal Amount', 'Interest Rate', and 'Payment Terms'

4. Loan Details: Specifies the principal amount, interest rate, term of the loan, and total amount to be repaid

5. Payment Terms: Details the payment schedule, including payment amounts, due dates, and acceptable payment methods

6. Vehicle Description: Provides complete details of the vehicle including make, model, year, VIN, and current odometer reading

7. Security Interest: Establishes the lender's security interest in the vehicle and references PPSA registration

8. Insurance Requirements: Specifies required insurance coverage and the lender's rights as loss payee

9. Borrower's Covenants: Lists the borrower's obligations regarding vehicle maintenance, use, and compliance with laws

10. Default and Remedies: Defines events of default and outlines the lender's rights and remedies upon default

11. General Provisions: Contains standard legal provisions including governing law, notices, and amendment procedures