Vehicle Finance Contract Template for Saudi Arabia

The Vehicle Finance Contract serves as the primary legal instrument for financing vehicle purchases in Saudi Arabia, structured in compliance with Islamic Sharia principles and Saudi banking regulations. This document is essential when a customer seeks financing for a vehicle purchase from a licensed financial institution. It encompasses crucial elements including financing terms, profit rates, payment schedules, vehicle specifications, ownership transfer conditions, and security arrangements. The contract must adhere to SAMA guidelines, the Finance Companies Control Law, and Islamic finance principles prohibiting conventional interest. It includes consumer protection provisions and requirements for Takaful insurance coverage. This standardized agreement helps financial institutions manage risk while providing customers with transparent, Sharia-compliant vehicle financing options.

1. Parties: Identification of the finance provider and the customer, including full legal names and contact details

2. Background: Context of the agreement and brief description of the financing arrangement

3. Definitions: Definitions of key terms used throughout the agreement

4. Vehicle Details: Comprehensive description of the vehicle including make, model, year, VIN, and specifications

5. Finance Terms: Details of the financing structure, including purchase price, down payment, and profit rate (structured in Sharia-compliant manner)

6. Payment Terms: Payment schedule, installment amounts, and method of payment

7. Vehicle Ownership and Transfer: Terms regarding vehicle ownership during financing period and transfer conditions

8. Insurance Requirements: Mandatory insurance coverage and related obligations

9. Customer Obligations: Customer's responsibilities regarding vehicle maintenance, use, and compliance with laws

10. Finance Provider Rights: Rights of the finance provider, including inspection rights and security interests

11. Default and Remedies: Events of default and available remedies

12. Early Settlement: Terms and conditions for early repayment of the finance amount

13. Representations and Warranties: Standard declarations by both parties

14. Governing Law and Jurisdiction: Confirmation of Saudi law application and jurisdiction

15. Notices: Process for formal communications between parties

16. Termination: Conditions and process for agreement termination