Vehicle Bill of Sale: Everything You Need to Know

  • by: Patrick Peterson
  • May 19, 2020

Bill of sale
A bill of sale is a document that memorializes the transfer of a valuable piece of property from one person to another. This document may be required under certain circumstances, and under others, it can be a good idea to create one for record-keeping purposes.

Bills of sale are most often created to record the transfer of title of a vehicle because in the past that was all that was required. Now, vehicles have titles that are official documents held by the owner, making a bill of sale unnecessary in about half of the U.S. states.

How to Write a Bill of Sale For a Car

Whether hand-written or typed, an official form downloaded from a state website or a do-it-yourself version should have the following basic information:

  1. Date,
  2. Buyer’s name and address,
  3. Seller’s name and address,
  4. A complete and detailed description of the item sold,
  5. Sale price, and
  6. Signatures of the buyer(s) and the seller(s).

If the bill of sale is for a motor vehicle:

  • Check to see if it’s a requirement in your state;
  • Make sure that details on the bill of sale match details on the vehicle title;
  • State whether there is any warranty for the condition or use of the vehicle (if not, the phrase “as is” should be included);
  • Include the vehicle VIN number on the bill of sale;
  • Always include the vehicle odometer reading (number of miles), and
  • Find out if your state requires the form to be notarized.

States that require a bill of sale to accompany the transfer of vehicle ownership include Alabama, Arkansas, Colorado, Connecticut, Hawaii, Idaho, Maine, Nebraska, New York, Ohio, Rhode Island, South Dakota, Vermont, Washington, Wyoming, and West Virginia. Because a bill of sale is a requirement in these states, each will have its own template that can be copied or downloaded from the Department of Motor Vehicles website. Use that version rather than creating your own as a home-made bill of sale might not include all of the necessary information (or the format may not be accepted) and may be rejected.

If giving or receiving a vehicle as a gift a bill of sale is particularly helpful – and still necessary. Departments of motor vehicles may use the form to calculate and collect sales tax. Such a bill of sale should include the fair market value of the vehicle.

Warranties and Loans

When an item is sold to another person the bill of sale reflects any warranty for longevity or performance, such as a vehicle that may be returned to the original owner if it doesn’t function as advertised for a specific period of time. If there are no implied or stated warranties the bill of sale should clearly state “as is.”

A bill of sale for an item that is being exchanged for money or in-kind services is a legal contract. If the buyer doesn’t have the full sale price at the time that he takes possession of the item the bill of sale may reflect a payment schedule or other arrangement for services in lieu of payment.

Other Times Car Bill of Sale May Be Helpful

A bill of sale may provide “back up” data to apply for a replacement title for auto if the actual title is lost. A bill of sale for another valuable item such as a television, wristwatch, or computer may be helpful if making an insurance claim for items lost in a fire or stolen in a burglary. Also if you are moving and items are lost during the transition, a bill of sale may be helpful to prove the value of things that need to be replaced.

Keep important documents like vehicle titles and bills of sale in a fireproof box in a safe place. Other documents that should be kept safely include birth certificates, vaccination records, passports, immigration documents, and other contracts.