Car Finance Contract Template for Philippines

The Car Finance Contract is a crucial document used in the Philippine market when a customer requires financing to purchase a vehicle. It serves as the primary agreement between a financial institution and a borrower, structured in compliance with Philippine banking and consumer protection laws, including the Financing Company Act of 1998 and Truth in Lending Act. The document is designed to protect both lender and borrower interests by clearly defining the financing terms, vehicle details, payment obligations, security arrangements, and regulatory disclosures. It's particularly important in the Philippine context where vehicle financing is a significant component of consumer lending and requires specific regulatory compliance measures. The contract typically includes comprehensive details about the vehicle, payment schedules, insurance requirements, and enforcement mechanisms in case of default, all tailored to meet local legal requirements and market practices.

1. Parties: Identifies the financing company (the Lender), the customer (the Borrower), and any guarantors with their complete details including registration/license numbers

2. Background: Brief context of the transaction, including the Borrower's request for financing and the Lender's agreement to provide it

3. Definitions: Defines key terms used throughout the agreement including 'Vehicle', 'Finance Amount', 'Interest Rate', 'Term', etc.

4. Vehicle Details: Comprehensive description of the vehicle including make, model, year, color, engine number, chassis number, and registration details

5. Finance Terms: Details of the financing including principal amount, interest rate, term, total amount payable, and effective interest rate as required by Truth in Lending Act

6. Payment Terms: Payment schedule, method of payment, due dates, and consequences of late payment or default

7. Security and Title: Provisions regarding vehicle ownership, registration, and security arrangements including chattel mortgage

8. Insurance Requirements: Mandatory insurance coverage requirements and terms

9. Borrower's Representations and Warranties: Borrower's confirmations regarding their capacity, authority, and financial condition

10. Borrower's Obligations: Ongoing obligations regarding vehicle maintenance, usage, and compliance with laws

11. Events of Default: Circumstances constituting default and consequences thereof

12. Lender's Rights and Remedies: Actions the Lender may take in case of default, including repossession rights

13. General Provisions: Standard clauses including notices, amendments, governing law, and dispute resolution