If you’re selling your car to an individual, creating a bill of sale is a wise move. A bill of sale is a legal document that outlines the terms of the deal and serves as proof that the vehicle was sold. The document usually includes identifying information about the buyer and seller, conditions attached to the sale, the date of the transfer, and the car’s purchase price.
Key Takeaways
- A bill of sale is a legal document that outlines the terms of your agreement with the buyer.
- Bills of sale are required to sell a car in 16 states.
- Bills of sale may be required to register a new car.
- In some states, a bill of sale must be notarized.
What Is a Bill of Sale?
Bills of sale are used for a range of transactions but are especially common in car, truck or recreational vehicle sales. The bill of sale is a record of the transaction, serving as an invoice and receipt, and outlines any guarantees or conditions attached to the sale. For the seller, a bill of sale can prove that you’re no longer liable for the vehicle if it’s involved in an accident. If any disputes go to court, the bill of sale will be reviewed to see the terms both parties agreed to honor.
Bills of sale are legally required in the following states:
- Alabama
- Arkansas
- Colorado
- Connecticut
- Hawaii
- Idaho
- Maine
- Nebraska
- New York
- Ohio
- Rhode Island
- South Dakota
- Vermont
- Washington
- West Virginia
- Wyoming
In some states, the bill of sale must be notarized to be recognized as valid. Louisiana, Nebraska, Maryland, New Hampshire, West
Virginia, and Montana all require a notary public to witness both parties signing the bill of sale.
Even if your state doesn’t require a bill of sale, consider creating one to provide you with extra protection.
What to Include
If you’re creating your own bill of sale, it should include the following:
- Vehicle details: List identifying information about the vehicle, such as year, make, model, and color.
- VIN: The vehicle identification number (VIN) acts as your car’s fingerprint, its unique identifier.
- Odometer reading: Check the odometer at the time of the sale and record its mileage.
- Payment details: Write down the sale price and how you agreed to be paid. In most cases, the buyer will pay a lump sum. However, if you agreed to installments, describe the agreed-upon terms.
- Terms and Cconditions: Make sure the bill of sale includes language that the car is being sold “as is”—that you make no guarantees about its condition or offer any form of warranty.
- Buyer and seller information: The names, addresses and phone numbers of both parties should be on the bill of sale.
- Signatures: Buyer and seller should sign and date the bill of sale.
In some states, the department of motor vehicles or highway safety will have bill of sale templates for you to download. For example, Florida, California, and New York all have PDF bills of sale you can use.
Other Necessary Documents
Though the bill of sale is a useful document, ownership of the car doesn’t legally change hands until the title is transferred to the new owner. Typically, you and the buyer can go to the local DMV and complete the necessary paperwork together.
The buyer usually has 10 to 30 days after buying the car to apply for a title transfer, pay the necessary title fees, and register the vehicle. After that, late fees may be imposed.
Selling Your Car
If you plan on selling your car, a bill of sale protects you and prevents misunderstandings with the buyer. Even if your state doesn’t require you to have a bill of sale, having one will only help.
A bill of sale is a document that transfers ownership from one person (the Seller) to another (the Buyer). It is a legally binding document that is commonly used when the former owner transfers possession of the goods to a new owner. The bill of sale acts as a receipt or record of necessary information. That includes the names and addresses of both buyer/seller, date of sale, price, and vehicle information. Buying or selling a vehicle? Make sure you have a copy of a bill of sale signed by both parties at the time of the sale. This will help prevent any problems that may arise later on. The bill of sale combined with a registration certificate may be enough to prove ownership, if a valid title isn’t available. Local requirements will vary, so be sure to check with your local department of motor vehicles.
What is a Vehicle Bill of Sale?
A bill of sale document lines out the details of a transaction between a buyer and seller of the vehicle. The seller’s bill of sale form will show the date the vehicle was sold and the buying party’s information. The buyer’s form will show specific information about the vehicle.
Information On The Form
- The purchase date.
- The purchase price.
- The names of the buyer and seller.
- The addresses of the buyer and seller.
- A description of the vehicle, including vehicle identification number (VIN).
- Any warranty that was agreed upon.
- The county and state in which the sale occurred.
Having a bill of sale helps sellers with reporting taxes and provides “as-is” protection if no warranty is agreed upon.
For buyers, a bill of sale can help determine the Vehicle Registration Fee in some states.
While a bill of sale provides a legal proof of the sale agreement, it generally does not prove ownership of the vehicle. For that, a title transfer is required. In some cases, a bill of sale alongside a registration certificate can prove ownership. Some states have specific requirements as to what must appear on a bill of sale form for it to be accepted. Check with your local department of motor vehicles for verification.
Depending on the state, an odometer disclosure statement may be needed. It could be a separate form or part of the state’s bill of sale form.
Title Transfer
A title transfer proves ownership of a vehicle. Until this document has been completed, a sale cannot be considered final. The seller may remain liable for any fines/violations associated with the car. Verify the VIN on the title to make sure it matches the actual VIN and that there are no liens.
Legal Considerations
A bill of sale represents a record of a sold vehicle. It is a legal document although it is not as formalized as a title or deed. If a dispute arises regarding the details or conditions of the transaction, the form can be used as evidence that the transaction took place.
Just like any other legal document, double check and understand all of the parts before signing. Since the seller provides the bill of sale, a buyer must read over the terms diligently.
States Requiring a Bill of Sale for Buying/Selling Cars
Not all states require a bill of sale when buying or selling a car, but for a few of them it is required. If it isn’t required in your state, it is recommended that you fill one out anyways for your own records. This way you will have record of the date, price, and other details of the transaction. The following are states that require a bill of sale when buying or selling a car:
- Alabama
- Arkansas
- Colorado
- Connecticut
- Hawaii
- Idaho
- Maine
- Nebraska
- New York
- Ohio
- Rhode Island
- South Dakota
- Vermont
- Washington
- West Virginia
- Wyoming
States with an Official Bill of Sale Form
The following states have a specific bill of sale form when you buy or sell a vehicle. If you are completing a vehicle sale in one of these states, download the official bill of sale template at the links below.
- Arizona
- California
- Connecticut
- Florida
- Georgia
- Idaho
- Indiana
- Kansas
- Maryland
- Missouri
- Montana
- Nevada
- New Mexico
- New York
- North Dakota
- Oregon
- South Dakota
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
States Requiring a Bill of Sale to be Witnessed and Notarized
Most states don’t require you to have a bill of sale signed with the witness of a notary. Although, there are a few states that require you to do so:
- Louisiana
- Maryland
- Montana
- Nebraska
- New Hampshire
- West Virginia
Downloadable Generic Bill of Sale Form (Free Template)
If your state does not require or offer a bill of sale form, download our generic, printable bill of sale template:
Download Bill of Sale Form
Vehicle History Report
If you are a buyer, it is always wise to order a vehicle history report. It’ll help you be sure you won’t be getting any unpleasant surprises later on. Vehicle history reports reveal details about a vehicle’s past, including:
- Previous owners
- States where the vehicle was registered.
- Past accidents and damage.
Compare the details on the bill of sale with the vehicle history report so you don’t purchase a lemon. You can also take the used car to your mechanic. This way you’ll be sure that everything will run smoothly and there won’t be any unexpected issues down the road.