Get Your Free Car Bill of Sale Information Guide

What Is a Car Bill of Sale and Why You Need One

A car bill of sale is a legal document that records the transfer of vehicle ownership from one person to another. When someone sells a car, the bill of sale serves as proof that the transaction took place. It documents important details about the vehicle, the seller, the buyer, and the terms of the sale. This document protects both parties involved in the transaction.

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The bill of sale becomes part of your vehicle records and may be required when registering the car with your state's Department of Motor Vehicles (DMV). Each state has different requirements for what must appear on a bill of sale, but most require similar core information. Without a proper bill of sale, disputes can arise about who owns the vehicle, what was paid, and when the sale occurred.

Many people underestimate the importance of a bill of sale. According to the National Automobile Dealers Association, approximately 40 million used vehicles are sold annually in the United States. A significant portion of these sales involve private parties rather than dealerships. Private sales increase the likelihood that a bill of sale will be missing or incomplete, which can create legal problems later.

The bill of sale protects you in several ways. If you are the seller, it proves you no longer own the vehicle and cannot be held responsible for accidents or violations that occur after the sale. If you are the buyer, it proves you own the vehicle and have the right to register it in your name. It also documents the purchase price, which affects the sales tax you may owe.

Practical takeaway: Even if your state does not legally require a bill of sale, creating one for any vehicle transaction is a smart practice. This document can prevent future disputes and protects your legal rights as either buyer or seller.

State-by-State Requirements and Variations

Every state in the United States has its own rules about bills of sale. Some states have specific forms that must be used, while others allow you to create your own document as long as it includes required information. Understanding your state's specific requirements is essential before completing a sale.

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States like California, Florida, and Texas provide official bill of sale forms through their DMV websites. These forms are designed to meet state requirements and are often free to download. If your state provides an official form, using it reduces the chance of missing important information. Other states, including New York and Pennsylvania, do not have official forms but still require certain information to appear on the document.

The information required on a bill of sale typically includes the vehicle identification number (VIN), make, model, year, color, and odometer reading. Most states require the full names and addresses of both the buyer and seller. The sale price or trade-in value must also be documented. Many states require the date of the sale and the signatures of both parties.

Some states have additional requirements. For example, odometer mileage discrepancies must be noted in some states due to federal regulations. Certain states require the bill of sale to be notarized, meaning a notary public must witness the signatures. A notary is an official authorized by the state to verify identities and witness signatures. Notarization costs between $5 and $15 in most locations.

Several states distinguish between different types of sales. Private party sales, dealer sales, and sales between family members may have different requirements. A sale involving a title transfer may require different documentation than a sale where the title is not being transferred. Check your state's DMV website or contact them directly to learn about your specific situation.

Practical takeaway: Before completing a vehicle sale, visit your state's DMV website or call their office to learn the exact requirements. Spending 15 minutes confirming requirements can prevent problems when registering the vehicle later.

What Information Must Be Included in Your Bill of Sale

A complete bill of sale contains specific information about the vehicle, the people involved in the transaction, and the terms of the sale. Each piece of information serves a purpose in documenting the transaction accurately and legally.

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The vehicle identification number, or VIN, is one of the most important pieces of information on a bill of sale. This 17-character code is unique to every vehicle and appears on the vehicle's title and registration documents. It can be found on the driver's side dashboard near the windshield or on the door jamb. Including the correct VIN prevents confusion if multiple vehicles are involved or if there are questions about which vehicle was sold.

Basic vehicle information includes the year, make, model, and color. While the VIN technically contains some of this information, writing it out in plain language makes the document easier to read and understand. The color is particularly useful because it helps anyone reading the document visualize the correct vehicle. For example, "2018 Honda Civic, Silver" is clearer than a VIN alone.

The odometer reading at the time of sale should be included on the bill of sale. This documents the vehicle's mileage when ownership transferred. Federal law requires that odometer readings be recorded accurately during vehicle sales. If the odometer is broken or reads more than 99,999 miles, this fact must be noted on the bill of sale. Recording the odometer reading helps prevent fraud and provides a record of the vehicle's condition at the time of sale.

The bill of sale must identify both the seller and the buyer. Full legal names, complete addresses, and phone numbers should be included for both parties. If the vehicle is owned by more than one person, all owners should be listed. Similarly, if the vehicle is being purchased by more than one person, all buyers should be identified. This clarity prevents questions about who had the authority to sell or buy the vehicle.

The sale price or trade-in value is a critical piece of information. Recording the actual amount paid establishes the value of the transaction. This amount affects sales taxes in many states. Some states base vehicle registration fees on the sale price. If no money changed hands and the vehicle was given as a gift, this should be noted as "gift" or "$0" depending on state requirements.

Practical takeaway: Create a checklist of required information before meeting to sign the bill of sale. Verify the VIN in person by looking at the vehicle's dashboard. Ask the seller to provide their full legal name and address, and provide yours. This ensures nothing is missed and the document is complete.

How to Create and Complete Your Bill of Sale

Creating a bill of sale can be done by hand, typed on a computer, or completed using an official state form. The method you choose does not matter as long as all required information is included and both parties sign the document. Many people choose to type their bills of sale because they are easier to read and can be saved as a record.

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If your state provides an official form, obtaining and using it is recommended. Official forms are designed to meet your state's legal requirements and are tested in court. You can usually find official forms on your state's DMV website. Search for "[Your State] DMV bill of sale form" or "[Your State] motor vehicle bill of sale." If you cannot find an official form, contact your state DMV directly to ask if one exists or to learn what information your state requires.

If no official form exists or you prefer to create your own, you can write the bill of sale from scratch or use a template from a reputable source. Templates are available through many websites, including some state DMV sites and legal document services. When using a template, choose one specific to your state, not a generic national template. State requirements vary significantly, and using a national template may miss important requirements for your state.

When completing the bill of sale, print or write clearly so all information is legible. Both the buyer and seller must sign and date the document. Some states require only one copy, while others require multiple copies. It is wise to create at least three copies: one for the seller, one for the buyer, and one for your records. If your state requires the document to be notarized, schedule an appointment with a notary before signing.

Pay close attention to dates. The date on the bill of sale should match the date the vehicle actually changes hands. The buyer and seller signatures should both be dated the same day. Mismatched dates can raise questions during the registration process. If you make a mistake while writing by hand, cross it out neatly, write the correction above it, and initial the change. Do not use white-out or erasers on important legal documents.

Practical takeaway: Type your bill of sale rather than hand-writing it. This prevents misreadings and makes the document look professional. Keep a copy for yourself and provide copies to the other party at the time of signing.