A bill of sale for car sales helps you verify that you sold your vehicle to a buyer. While not required by every state Department of Motor Vehicles, or DMV, this legal document is a useful addition to the selling process. See why you should consider using a bill of sale for your next used car sales experience and how PrivateAuto can help you create and sign one.

Purpose of a Vehicle Bill of Sale

Similar to the receipt you receive from every other transaction, a bill of sale is a form of evidence that you signed a contract with the buyer. The certificate of title is an official legal document, but the buyer takes that with them. A bill of sale is a contractual document that you can keep a copy of as the seller. While it doesn’t provide any guarantee that the buyer will transfer the title and claim full responsibility of the vehicle, it does help to prove the sale was mutually agreed upon.

This document should give you peace of mind as a seller. You must typically sign the title as well as this document to legally sell a vehicle to a private individual, but it can be a good level of protection in the event that the buyer scams you and doesn’t transfer the title out of your name. 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, if necessary, to prove you’re transferring ownership of the vehicle.

Motor Vehicle Bill of Sale Form Information

The specific form of a bill of sale varies depending on the item being sold and the location. In general, however, your document should include the following information:

  • The date of sale
  • The Vehicle Identification Number
  • Description of the vehicle, including body type, make, model, and year
  • Odometer reading at the time of purchase
  • The full names of buyer and seller
  • The agreed upon purchase price
  • An acknowledgement that the new owner purchases the vehicle with or without a warranty
  • Buyer’s and seller’s signature

These vehicle bill of sale features help describe the particular vehicle, the scope of the agreement, the sale price, and the parties involved. It may not replace a title transfer application in your particular state, but it does help you retain a legal document stating the scope of the agreement between you and the buyer.

Be sure the document contains enough information to clearly identify you, the buyer and your vehicle. Carefully review the key information, like the VIN and your full names, 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.

Bill of Sale with pen on the paper.

State-Specific Requirements

There are many bill of sale form options you can choose from. Some states require a specific bill of sale for car sales between private parties. Whether you’re selling a junk car or transferring the title of your favorite classic vehicle, be sure you know how bills of sale vary by state.

One state-specific requirement you may need to follow is to have the document notarized. A notary public can witness and verify the signatures before putting a seal on the bill. This helps the motor vehicle department in your state verify the bill of sale is valid and was truly signed by both parties.

Another requirement by some states is a promissory note. This is used to show proof of purchase and the use of installments to transfer ownership of the vehicle.

How to Create a Bill of Sale

There are many different ways to create a bill of sale. A well-written bill of sale may help prevent you from getting scammed when selling online. However, these legally binding documents can be difficult to write on your own.

If you’re concerned about writing up a bill of sale that fits the requirements of your state motor vehicle department, then consider using a bill of sale form. Most DMVs that require these documents also have forms available for you to print out and sign or sign online. A technology driven listing service can also offer e-sign convenience for a straightforward way to prepare this contract.

Who Needs to Sign and Obtain Bills of Sales?

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. This can be done at a notary public or in private, if your state doesn’t require notarized signatures.

You can review your state-specific title transfer requirements to see what needs to be included on your bill of sale, or you can use a form from an online listing service for a convenient experience. Simply confirm your state when you create a listing and you can e-sign any relevant documents when you accept an offer from a buyer. This takes the guesswork out of drafting a bill of sale and the frustration out of trying to meet with the buyer to sign this document.

Person signing a document.

What Does a Bill of Sale Mean?

While not an officially certified title, a bill of sale is a legally binding document. This means that you, as the buyer, may not be able to get your vehicle back if you regret the decision.

Be sure the seller is also aware that a bill of sale typically states that the vehicle is being sold as it. This means that any defect that becomes apparent after the document is signed is the sole responsibility of the seller. You should be clear about any known mechanical issues, but if the engine dies without warning the next day then it’s the new owner’s responsibility to deal with the issue.

Use a Bill of Sale Template With PrivateAuto

Learn more about using a bill of sale for car sales to private individuals with PrivateAuto. List your vehicle and use a bill of sale template to easily sign this important document. Whether required or not, you can easily send this bill to the buyer and receive an e-signature of the buyer’s name to complete the contract.