A bill of sale is the linchpin of a private-party vehicle transaction. It serves as a written record that legally documents the transfer of ownership from the seller to the buyer.
What info is included in a bill of sale?
What is the purpose of a bill of sale?
What is a loan/bill of sale combo?
What are the different types of a bill of sale?
Who needs to sign a bill of sale?
Is a bill of sale legally binding?
Where can I find a good bill of sale template?
While not required by every state’s Department of Motor Vehicles (DMV), this legal document ensures that both parties are on the same page, keeping misunderstandings at bay and providing legal protection for buyer and seller alike in the unlikely event of a dispute.
See why you should use a bill of sale for your next used car sales experience and how PrivateAuto makes the bill of sale process easy.
What is a Bill of Sale for Car Transactions?
A bill of sale is a legal document that records the transfer of ownership of an asset from one person to another. The asset could be a vehicle, boat, piece of equipment, or any other type of personal property.
A bill of sale provides proof of ownership and can be used to register the asset with the new owner with the appropriate authorities. In some cases, a bill of sale may also be required in order to obtain insurance for the new owner.
The importance of a bill of sale cannot be overstated, as it performs several crucial functions in a private-party vehicle transaction.
- It establishes the date of the sale, which is essential for tax and registration purposes.
- It outlines the vehicle's specifics, such as make, model, year, and vehicle identification number (VIN)
- It includes essential information about the buyer and the seller, such as names, addresses, and contact details. This information comes in handy in the event of a dispute or if the vehicle's history needs to be traced.
Basically, the bill of sale serves as a safety net for both parties.
What Info Needs to Be On a Motor Vehicle Bill of Sale?
Each state might have different requirements for what must be included in a bill of sale, but all include such pertinent info as the names and addresses of the buyer and seller, vehicle info, and purchase price.
Here’s a more exhaustive list of what most states’ bills of sale include:
- Seller's info:
- Full name
- Contact information (phone number and/or email address)
- Buyer's info:
- Full name
- Contact information (phone number and/or email address)
- Vehicle info:
- Make (manufacturer)
- Body type
- Vehicle Identification Number (VIN)
- Odometer reading (mileage)
- Vehicle description, including condition
- Transaction details:
- Purchase price (in words and numbers)
- Date of sale (month, day, and year)
- Payment method (cash, check, money order, or electronic transfer)
- Additional terms and conditions (if any):
- An acknowledgment that the new owner purchases the vehicle with or without a warranty, as the case may be
- Disclosure of known defects or issues with the vehicle
- Any agreed-upon repairs or maintenance to be performed before or after the sale
- Terms of a return policy, if any
- Any other specific terms agreed upon by both parties
- Both the buyer and the seller should sign and print their names
- The date of signing
- Witness signatures, if required by your state, or if desired for extra validation
- Notarization (if required or desired—some states require the bill of sale to be notarized, while others don’t):
Carefully review key information, like the VIN, before signing to be sure there are no errors in the document. Serious errors could void the bill of sale or stall the title transfer process until they’re corrected.
Don’t worry: when you buy or sell a car through PrivateAuto, we include your state’s official bill of sale as part of our in-app process. Both buyer and seller will e-sign the document at the appropriate stage in the transaction, after which the buyer can transfer payment and the seller can sign over the title.
Purpose of a Vehicle Bill of Sale
A bill of sale records the transfer of ownership from the seller to the buyer. It establishes transparency and trust between both parties and safeguards their respective interests. Let's delve deeper into the purpose of a bill of sale from both the buyer's and seller's perspectives.
The Bill of Sale for a Car Buyer
When buying a used car from a private party, a bill of sale protects you in the following ways:
- Proof of ownership: a bill of sale serves as evidence that you have bought the car fair and square from the seller, thus confirming the transfer of ownership.
- Scam protection. If the seller is planning on receiving your payment and then refusing to sign over the title to you, the bill of sale proves that they are required to complete the transaction—or give your money back.
- Legal compliance: in many states, a bill of sale is required for title transfer and vehicle registration, ensuring that the buyer complies with local laws and regulations.
- Insurance: the bill of sale is often necessary for obtaining insurance coverage for the newly acquired vehicle, as it provides proof of purchase and ownership.
- Transparency: the bill of sale outlines the details of the transaction, including the vehicle's specifics and the agreed-upon purchase price, ensuring that both parties understand the terms and conditions of the sale.
- Dispute resolution: In the event of any discrepancies or misunderstandings, the bill of sale serves as a reference point, helping resolve disputes more efficiently.
As a buyer, you definitely want a bill of sale, signed by the seller, to secure your transaction. And we give you one when you buy a car through PrivateAuto.
The Bill of Sale for a Car Seller
When selling your car to a private individual, a bill of sale acts as a safeguard in case the buyer doesn’t transfer the title out of your name.
- Release of liability: a bill of sale helps the seller prove that they have transferred the ownership of the vehicle, thereby releasing them from any future liability related to the vehicle's use, such as traffic violations or accidents.
- Protection against fraud: the bill of sale helps protect the seller from potential fraud by establishing the date of sale and the identity of the buyer, ensuring that any future issues are directed towards the new owner.
- Tax purposes: the bill of sale documents the transaction's details, including the sale price, which may be required for tax reporting and record-keeping purposes.
- Legal compliance: similar to the buyer, the seller is also required to comply with local laws and regulations, and a bill of sale helps in fulfilling this obligation.
- Peace of mind: the bill of sale offers the seller peace of mind, knowing that the transaction is documented and legitimate, reducing the risk of potential issues down the road.
Similar to the receipt you receive from every other transaction, a bill of sale provides evidence that you signed a contract with the buyer. The certificate of title is an official legal document, but the buyer takes it with them, meaning that you won’t be able to use the title to prove that you sold your car.
A bill of sale shows that you are no longer the owner and are not responsible for any collisions, crimes, or parking tickets after the date of sale. Be sure you also sign the title and the odometer disclosure statement.
Auto Loan and Bill of Sale Combination
An auto loan/bill of sale combination usually comes into play when the buyer is financing a vehicle purchase through a lending institution. In such cases, the bill of sale is supplemented with information about the auto loan, linking the vehicle purchase and the financing agreement.
This combined document may include:
- Loan amount: the total amount financed by the lender.
- Annual percentage rate (APR): the annual interest rate applied to the loan.
- Loan term: the duration of the loan, usually in months or years.
- Monthly payment: the fixed amount the buyer must pay the lender each month.
- Lienholder details: the name and contact information of the lending institution that holds the lien on the vehicle until the loan is fully repaid.
The purpose of an auto loan/bill of sale combination is to clearly outline the terms of both the vehicle purchase and the financing agreement. This ensures transparency and allows the buyer, seller, and lender to be on the same page regarding the transaction.
An auto loan/bill of sale combo is different from an auto loan agreement, which is a separate contract between the buyer and the lender that details the terms and conditions of the vehicle financing.
A bill of sale can also be used in an auto loan agreement. For example, if you're buying a car using financing, the complete purchase agreement can be framed as a bill of sale, although technically the transfer of title might not happen until all payments required under the loan are made.
When you buy or sell a car, the state you live in may regulate loan/bill of sale combinations because some sellers or lenders may abuse them.
For example, some sellers may use auto loan/bill of sale combinations to sell cars that have a salvage title or that have mechanical defects. Some lenders may use loan/bill of sale combinations for a loan refinance without the borrower's knowledge or consent. If you're considering entering into a loan/bill of sale agreement, it's important to research your state's laws and regulations surrounding this type of contract.
It's a good idea to consult with an attorney and get all relevant legal information before entering into any loan/bill of sale agreement, just to be sure that your rights are protected.
By doing your due diligence upfront, you can help protect your rights in the event that something goes wrong. For instance, if you're considering entering into a quitclaim deed, you'll want to make sure that you understand all the implications first. Otherwise, you could end up losing your car or becoming liable for someone else's debt.
How to Write a Bill of Sale
There are many different ways to create a bill of sale, but you shouldn’t try to write your own. Each state already has its own official bill of sale, which you can usually download from your state’s website or pick up at DMV offices.
However, PrivateAuto provides an official bill of sale form for your state when you buy or sell a car through our handy app.
Bill of Sale Types
There are several types of bills of sale, ranging from printed to handwritten to electronic—to types for different scenarios.
Printed Basic Bill of Sale
Back in the day, a bill of sale was a printed document. Some people still do it this way. We’ve made it so much easier: both parties electronically sign in our mobile app.
Even the most basic printed bill of sale should include the following info:
- The names and addresses of both the buyer and seller
- The description of the asset being sold
- The date of sale and the purchase price should also be included
Handwritten Bill of Sale
A handwritten bill of sale is—you guessed it—a bill of sale written by hand instead of printed or generated electronically. The buyer, seller, and possibly a notary public should all sign the handwritten document, which should contain all of the same pertinent info as any other bill of sale.
A handwritten bill of sale is a valid document as long as it includes all of the required information and signatures.
Electronic Bill of Sale
An electronic bill of sale, also known as an "e-bill of sale," is a legal document that allows an individual to transfer ownership of a vehicle to another person. In order to create an e-bill of sale, both the buyer and the seller must agree to the terms of the sale and sign the document electronically. Once the bill of sale has been signed, it is considered binding and cannot be altered or revoked.
When you transact via PrivateAuto, we include an easy e-bill of sale as part of every transaction.
Motor Vehicle Bill of Sale
A motor vehicle bill of sale is designed specifically for the sale of a car, truck, or motorcycle. This designation encompasses e-bills, handwritten bills, and printed bills of sale.
Conditional Bill of Sale
A conditional bill of sale is an “if-then” agreement. It outlines the transfer of ownership of an asset (such as a vehicle) with a catch. In this case, the catch is that the transfer of ownership is only possible if certain conditions or obligations are met. So long as these conditions aren't met, the deal isn't finished.
Often, a conditional bill of sale is used when a buyer is purchasing a vehicle through a financing arrangement. In such cases, the condition to be met is usually the full repayment of the loan. Until the buyer pays off the loan in its entirety, the lender retains a security interest in the vehicle, effectively holding the keys to the kingdom, so to speak.
The conditional bill of sale usually has information about the vehicle, the people involved, the purchase price, and any conditions that must be met before ownership can be transferred. Once all the conditions are met, the bill of sale becomes unconditional (i.e., a regular ol’ bill of sale).
In essence, a conditional bill of sale acts as a safeguard for the lender or seller in a financed transaction. It's like having a safety net, ensuring that the buyer holds up their end of the bargain and meets their financial obligations. It provides the lender or seller with legal recourse, such as repossessing the vehicle, if the buyer fails to fulfill the stipulated conditions.
“As-Is” Bill of Sale
An as-is bill of sale stipulates that a vehicle is being sold in its current condition, with the buyer accepting all existing faults or defects. This type of bill of sale implies that the seller offers no warranty or guarantee and that the buyer bears the responsibility for any repairs or issues post-purchase.
Most private-party vehicle transactions involve an as-is bill of sale, since most sellers sell their car as is, with no guarantees of future performance or condition.
Who Needs to Sign Bills of Sale?
Both the buyer and seller must sign a bill of sale for it to be valid. Just like signing your car title, both parties need to sign and date the document to show that the agreement is mutual. Some states require the bill of sale to be witnessed by a notary public, while others only require the signatures of the buyer and seller.
Who Keeps the Bill of Sale?
A buyer and seller should each keep a copy of the bill of sale. The bill of sale protects buyers and sellers equally.
If you’re using a printed or handwritten bill of sale, generate two copies so you each can have one. Then each of you sign both copies.
When doing the deal through PrivateAuto, we store electronic copies of the bill of sale in our app. The buyer and the seller can each forever access their official copy in their respective PrivateAuto account.
Is a Bill Of Sale Legally Binding?
In a nutshell, a bill of sale is indeed legally binding. It outlines the terms and conditions of the agreement, ensuring both parties have a written record of what they agreed to. In the unfortunate and rare event that you end up in court, the bill of sale will help you hold the other party accountable.
Where Can I Find a Good Bill of Sale Template?
Transact through PrivateAuto and forget about searching for the perfect bill of sale template. We provide an official bill of sale for your state and we make it so easy for both parties to e-sign it in our mobile app.
Plus, we provide a host of other benefits, from instantaneous fee-free transactions to secure communications. We’re the only platform that gives you end-to-end convenience and safety to get the deal done.
List your vehicle today and see just how easy it can be. Or, if you’re in the market, browse used cars for sale by owner.
Buy or Sell Used Cars With PrivateAuto
Whether you are trying to find a used vehicle for sale near you or you are trying to sell your vehicle, PrivateAuto makes it happen.
Our integrated banking gateway, PrivateAuto Pay, is truly revolutionary. It allows you to send or receive unlimited funds instantly and for free.
Bill of Sale FAQ
Is a handwritten bill of sale OK?
In most states, a handwritten bill of sale can serve as a legally-binding agreement, provided it has all of the necessary info about the vehicle, the buyer and seller, and the terms of the transaction.
Still, handwritten bills of sale are terribly inconvenient. Transact with PrivateAuto and enjoy the convenience of our electronic bill of sale.
Do I need a bill of sale if I have the title?
While having the title is essential, it's wise (required, even, in some states) to also have a bill of sale. The Department of Motor Vehicles (also known by other titles, such as Bureau Of Motor Vehicles, in some states) often relies on the bill of sale to efficiently track the vehicle's ownership.
Plus, the title and bill of sale serve totally different purposes.
The bill of sale serves as proof that the transaction took place and what exactly was agreed to.
The title proves ownership of a car.
A vehicle title includes information about the vehicle, like make, model, and year, and vehicle identification number (VIN). The bill of sale should include all the same info, plus it usually has a lot of additional info specific to the transaction.
What paperwork do I need to sell my car privately in California?
To sell your car in California, you'll need a few key documents to ensure a smooth and lawful transaction. Here's a handy checklist to help you stay on track:
- Title (Pink Slip): sign and date the title to transfer ownership to the buyer. Ensure all relevant sections, like the odometer reading, are completed.
- Bill of sale: while not mandatory in California, a bill of sale is highly recommended.
- Notice of Transfer and Release of Liability (REG 138): complete and submit this form to the California Department of Motor Vehicles (DMV) within 5 days of the sale to release yourself from any liability related to the vehicle.
- Vehicle/Vessel Transfer and Reassignment Form (REG 262): this form documents the odometer disclosure, transfer of ownership, and any lien releases. It's only available at a DMV office, as it's printed on security paper.
- Smog certification: you’re required to present the buyer with a smog certification, unless your vehicle is exempt. The cert is valid for 90 days.
- Lien release (if applicable): if your vehicle has a lien, you must provide a lien release document from the lender, confirming that the loan has been paid off.
By having these documents ready, you'll be well-prepared for a hassle-free private car sale in the Golden State. Don't forget to double-check the most recent guidelines from the California DMV to stay up-to-date with any changes. Also, read up on transferring a California car title if you’re curious how that process works.
Does a car bill of sale need to be notarized in Utah?
Utah does not require notarization on vehicle bills of sale. So long as the buyer and seller sign it, you’re good to go. Learn about transferring a car title in Utah if you’re wondering how that process works.
Do you need a bill of sale to register a car?
In some states, a bill of sale is required in order to register a car, while in others it is not. However, even if your state does not require a car bill of sale, it is still a good idea to have one.
The process of registering the vehicle can be a bit confusing. In most states, you will need to show some proof of ownership as well as identification (driver licenses, usually). However, a bill of sale can often be used as proof of ownership.
A bill of sale can also be used to establish the purchase price for sales tax purposes.
Is a bill of sale required in Florida?
If you're selling a used car in Florida, you'll need to provide the buyer with a bill of sale form. This form, also known as HSMV Form 82050 from the Florida Department of Highway Safety and Motor Vehicles DMV, acts as legal proof that the sale took place and that the buyer has taken ownership of the vehicle.
The bill of sale form includes information about the car being sold, information about the buyer and the seller, as well as the purchase price and the date of sale. It's important to keep a copy of the bill of sale for your records, in case you need to reference it at a later date.
One of the most important things to do when selling a car is the transfer of ownership. This ensures that the new owner is legally responsible for the vehicle, and not you.
You should also make sure that the buyer has filed for a title and registration for the car. If you don't follow these steps, you could be held legally responsible for actions taken with the vehicle, even if you no longer own it.
PrivateAuto makes private vehicle sales easy by bringing the entire transaction process—including e-signing the bill of sale—into our intuitive application.
Can you get a title with a bill of sale in Arkansas?
In Arkansas, a bill of sale is only valid as a receipt for the purchase of a vehicle. It is not sufficient for transferring ownership of the vehicle or getting a title. To make the ownership transfer official, you will need to complete an Arkansas title transfer. You can get a title transfer form at your local department of revenue office or online through the Arkansas Vehicle Services Portal.
When you complete the title transfer, you will need to provide the following information: the vehicle's make, model, and identification number; personal information like the names and addresses of the buyer and seller; and the date of sale. If you're using a power of attorney to sign over the car, be sure to include that information as well. Once the title transfer is complete, the new owner will be able to register the vehicle in their name.
Can you get a title with a bill of sale in Mississippi?
A Mississippi motor vehicle bill of sale is a document that proves the legal sale of a motor vehicle. The bill of sale is needed for vehicle registration. It does require notarization.
The Mississippi Motor Vehicle Title Act required a bill of sale as a supporting document when making an application for a Certificate of Title.
A bill of sale is an agreement between the buyer and seller that transfers ownership of the vehicle and title to the new owner.
If you do not have a bill of sale form, you may be able to get one from your local DMV office, or from the Mississippi Department of Revenue's Motor Vehicle Division. The official Mississippi bill of sale document is Form 78013188.
To learn more, read our complete article on transferring a car title in Mississippi.
Do I need a bill of sale to transfer a title in Idaho?
If you're selling a car in Idaho, you'll need to provide a bill of sale or receipt to prove the sales price. This is important for transferring an Idaho car title. Without it, the Department of Motor Vehicles will not be able to process the buyer’s title application.
Do commercial vehicles require a separate bill of sale?
While the process for commercial vehicles is similar to that of standard vehicles, some states may have specific requirements for a bill of sale. Check with your local DMV to ensure you're covering all your bases.
When selling my car, do I need to remove the license plate?
Different states have different requirements for what happens to license plates in a private car sale. In some states, the seller must remove the license plate before transferring ownership. Consult your state's DMV to confirm.
Are there specific bill of sale requirements for car transactions in North Dakota?
North Dakota has its own bill of sale form (SFN 2888), which you'll need to complete during a car transaction. The form can be found on the North Dakota Department of Transportation website—or in the PrivateAuto app when you buy or sell a car in North Dakota.
How does a bill of sale affect vessel registrations?
Vessel registrations often require a bill of sale. Consult your state’s rules to determine if you need a bill of sale when buying or selling a boat.
What is a driver's guide?
A driver's guide typically covers licensing and road safety, traffic rules, and other things a driver should know.
Can a freedom of information request help me obtain a copy of a bill of sale for a car transaction?
It depends on the state and the specific information you're seeking. In some cases, a freedom of information request might help you obtain a copy. However, check with your state's DMV to confirm the process and any limitations.
Is the buyer's signature mandatory on a bill of sale during a car transaction?
A buyer signature is typically required on a bill of sale, as it confirms their agreement to the terms and conditions of the transaction.
Are there unique bill of sale requirements for car transactions in Rhode Island?
Rhode Island requires a bill of sale for car transactions when the title isn't available or is insufficient. Visit the Rhode Island DMV website for the required form and additional information—or transact through PrivateAuto to get an official RI bill of sale.
Who pays license fees in a private car transaction?
The buyer of a used car pays license plate fees, taxes, registration fees, and any other taxes and fees that might be due.
Are there specific bill of sale requirements for car transactions in West Virginia?
In West Virginia, a bill of sale must include the buyer and seller's information, a vehicle description, the purchase price, and signatures. The official WV bill of sale is known as Form DMV-7-TR, and is available on the West Virginia DMV website—or in your PrivateAuto account when you transact via our handy app.
Do I need an ID card to complete a bill of sale for a car transaction?
Both parties to a used car transaction should provide identification, such as a driver’s license, passport, or state identification card.
How are registration fees paid in a private party car transaction?
The buyer pays to register the car in their name with the state. Depending on the state, registration fees may be flat, or may be based on the vehicle's make, model, year, weight, or other factors. Consult your state's DMV for specific fee structures.
Are registration applications necessary?
Registration applications are required to transfer the vehicle's title and registration to the new owner. The bill of sale serves as proof of ownership but does not replace the need to register the car with the DMV.
How does the bill of sale process differ for car transactions involving out-of-state buyers?
When dealing with out-of-state buyers, it's crucial to follow the requirements of both states involved in the car transaction. Depending on the rules in each state, you may also need to get documents like temporary registration permits in addition to a bill of sale.
Read our guide to buying a car remotely to see how PrivateAuto makes remote car buying easy.
Do I need to provide proof of insurance during a car transaction?
The buyer typically doesn’t need to show insurance coverage to complete the transaction with the seller. However, they will usually need to show insurance to the DMV in order to register the car..
Does South Dakota require a bill of sale?
South Dakota does not require a bill of sale for private party used car transactions, but it’s still a good idea to have one. When you buy or sell a South Dakota car through PrivateAuto, we provide both parties with an official electronic bill of sale.