Car Referral Fee Agreement Form

Car Referral Fee Agreement Form: A Comprehensive Guide for Car Dealerships

Car dealerships often rely on referrals to boost their sales and grow their business. A referral fee agreement form is an essential document that outlines the terms and conditions of the referral program between the dealership and the referring party. In this article, we will explore everything you need to know about car referral fee agreements.

What is a Car Referral Fee Agreement?

A car referral fee agreement is a legal document that outlines the terms and conditions of a referral program between a car dealership and a referring party. The referring party could be anyone, including a customer, a friend, or a family member. The agreement specifies the referral fee that the dealership will pay for every successful sale resulting from the referral.

The referral fee agreement is a binding legal contract that protects the interests of all parties involved. It helps to avoid misunderstandings and disputes and ensures that everyone is clear on the terms and conditions of the referral program.

Components of a Car Referral Fee Agreement

The referral fee agreement forms vary from dealership to dealership, but they typically include the following components:

1. Referral Fee Percentage: This is the amount the dealership agrees to pay the referring party for every successful sale resulting from the referral.

2. Referral Criteria: The agreement specifies the criteria that must be met for the referral to qualify for the referral fee. This may include the type of vehicle being sold, the sales price, and any other relevant factors.

3. Term of Agreement: The length of time the referral agreement will be valid is specified in the agreement.

4. Disclosure Requirements: The agreement may require the referring party to disclose their referral relationship with the dealership to potential buyers.

5. Non-Circumvention Clause: The referral agreement may include a non-circumvention clause that prohibits the referring party from taking the dealership`s customers to another dealer.

6. Termination Clause: The agreement may include a clause that allows either party to terminate the agreement in specific circumstances.

Benefits of a Car Referral Fee Agreement

A well-drafted referral fee agreement benefits everyone involved, including the dealership, the referring party, and potential customers. Here are some of the benefits:

1. Increased Sales: Referral programs are an effective way to generate new business and drive sales growth.

2. Cost-Effective Marketing: Referral programs are relatively inexpensive compared to other marketing channels, such as advertising.

3. Customer Loyalty: Referral programs reward loyal customers and encourage them to continue doing business with the dealership.

4. Increased Trust: Referrals from friends and family members are more trustworthy and credible than traditional advertising.


Referral fee agreements are essential for car dealerships that rely on referrals to drive sales growth. The agreement outlines the terms and conditions of the referral program, including the referral fee percentage, referral criteria, term of the agreement, disclosure requirements, non-circumvention clause, and termination clause.

By having a well-drafted referral agreement in place, car dealerships can ensure that everyone involved understands the terms and conditions of the referral program, and potential disputes are avoided. A referral program is an effective way to increase sales, drive customer loyalty, and develop a trustworthy reputation in the community.

This entry was posted on April 19, 2023, in Uncategorized. Bookmark the permalink.