A bill of sale is a legal document transferring ownership of an item from one person to another. These forms are similar to retail receipts, but they record the sale or transfer of valuable assets like cars and protect the buyer and seller from future legal disputes over the item’s condition or ownership.
Most states require a completed vehicle bill of sale to register a motor vehicle at the DMV, and many recommend using a bill of sale if you buy or sell any item over $500.
By State
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
By Type
What Is a Bill of Sale?
A bill of sale is a document that details a sales transaction or transfer of ownership between two parties. Once the buyer and seller execute the bill of sale form, they should keep copies to prove the transaction’s completion.
Not all states or counties require a bill of sale for property purchases. However, signing one is good practice to add an extra layer of protection in case of future disputes.
Legal Considerations
- Is a Bill of Sale Legally Binding? YES
- Do I Need to Get a Bill of Sale Notarized? YES (in many cases)
Why Should You Use a Bill of Sale?
Using a bill of sale can be advantageous for several reasons. For instance, it does the following:
Offers Legal Protection
A bill of sale offers legal protection to both parties. The seller can show they’ve transferred the responsibility for the item and avoid future liabilities. The buyer can show that they’ve transferred ownership willingly and legally.
For example, imagine the buyer damages a boat a couple of weeks after purchasing it from a seller. A bill of sale will help ensure that the seller isn’t responsible for paying for damages.
Provides Evidence
A bill of sale serves as evidence when transferring any valuable item to a new owner. Many states require you to provide a signed sale statement as proof of purchase when registering specific items.
You can use this document to transfer ownership of the following items:
- Vehicles (cars, RVs, motorcycles, trailers, campers)
- Watercraft (boats, jet skis)
- Personal property (bicycles, furniture, jewelry)
- Animals (horses, dogs, cats, livestock)
- Equipment (tools, exercise equipment)
- Firearms
IMPORTANT
If you write an auto bill of sale, you must disclose the odometer reading and vehicle identification number (VIN). The odometer reading is the current mileage at the time of the sale, and the VIN is on the windshield or inside the vehicle’s door.
Helps With Gifting
If you want to transfer an asset as a gift, you can document it on a bill of sale by recording the purchase price as $0. Depending on your state, you may also need to file a gift affidavit or a similar document.
Aligns the Buyer’s and Seller’s Expectations
This document prevents misunderstandings by aligning buyers’ and sellers’ expectations. It includes information about the item’s condition and ensures the seller has the legal right to sell the item in question.
Ensures Legal Compliance
Depending on the item the buyer purchases, they may need a bill of sale. Government agencies may need a bill of sale for registrable items like boats and vehicles to register the item and officially record the new owner.
How to Buy and Sell a Vehicle
Buyers and sellers can follow these steps to buy and sell vehicles privately.
Step 1 – Discuss the Terms of the Agreement
Once the buyer and seller agree to initiate the purchase and sale of a specific vehicle, they must negotiate the sale price and other terms.
The parties should also discuss the payment method and whether the buyer will make the payment upfront or in installments. The vehicle bill of sale must include details about the parties, the vehicle’s condition, and the transaction terms.
When a bill of sale includes a warranty, it must clearly explain what damage and repairs the guarantee covers and for how long. If the document doesn’t have a warranty, the item is sold “as-is.” Therefore, the buyer must check the item thoroughly and ask any questions before completing the sale and signing the form.
Step 2 – Obtain the Vehicle Identification Number (VIN)
The buyer should get the motor vehicle’s vehicle identification number (VIN) from the seller. This 17-character number is unique to every car, and you can find it on the automobile’s title or registration.
You can also find the VIN in the following places:
- Where the door meets the vehicle
- The driver’s side windshield
- The front end of the frame
- The front of the engine block under the hood
The buyer can use the VIN to determine the car’s repair and ownership history. They can also see whether someone has ever tampered with the car’s odometer or if the vehicle has a significant malfunction or defect that makes it unsafe to drive.
Conducting your due diligence when buying a used car can help you get the best deal possible.
Step 3 – Gather Vehicle Documents
The seller must provide various documents to complete the sale and transfer ownership to the buyer. These documents include the following:
- The vehicle’s title and registration. If the seller can’t find the title, they can request a duplicate or replacement title from their local motor vehicle office.
- The completed vehicle bill of sale.
- The odometer disclosure statement (it might be a separate document or located on the title and bill of sale).
- A photo ID, such as a valid state driver’s license
A bill of sale includes the following sections that you must complete:
Seller and Buyer Information
The seller and buyer must write their contact details, including their full name, street address, city, state, zip code, telephone number, and email address.
Item Information and Purchase Price
You must write the purchase price and describe the vehicle’s condition at this stage. Outline the model, make, year, body style, and vehicle color. Noting any faults or damage in detail will help you avoid disputes later.
Step 4 – Complete the Sale
The parties can now complete the sale at an in-person meeting. The buyer will bring the funds, and the seller will bring the vehicle. The seller will sign the title to the buyer, and both parties will sign the bill of sale.
If your state requires notarization for vehicle bills of sale, you must have a notary observe both parties’ signatures.
If your state doesn’t require notarization, consider notarizing the bill of sale to prove the transaction occurred and verify both parties’ identities.
Step 5 – Register the Vehicle
After finalizing the bill of sale, the new owner will register the vehicle within a specific time and pay any associated sales tax.
Registering the vehicle involves going to a local motor vehicle department office and presenting the relevant fees and the following documents:
- The signed vehicle bill of sale
- The signed-over title
- The odometer disclosure statement
- Proof of car insurance
- Registration fee(s)
- An emissions test (only required in certain states)
IMPORTANT: Bill of Sale vs. Certificate of Title
In terms of vehicle sales, a bill of sale only shows proof of the transaction. A seller must complete a certificate of title to establish the buyer as the new legal owner in the eyes of the government.
DMV Offices in Each State
State | Location | Bill of Sale Required? |
---|---|---|
Alabama | Vehicle Licensing Offices | Yes |
Alaska | Division of Motor Vehicles | No |
Arizona | Motor Vehicle Division | No |
Arkansas | Department of Revenue Office | Yes |
California | Department of Motor Vehicles | No |
Bill of Sale Sample
Frequently Asked Questions
Who Writes a Bill of Sale?
A buyer or seller can write a bill of sale, but the seller most commonly prepares it.
Is a Bill of Sale the Same as a Receipt?
A bill of sale and receipt both record a transaction between a buyer and seller, but they have different purposes. A bill of sale records the transfer of ownership of a piece of property, while a receipt acknowledges the seller’s receipt of payment.
What’s the Difference Between a Sales Agreement and a Bill of Sale?
A seller creates a sales agreement to outline the sale’s terms before exchanging goods and accepting payment. Alternatively, a seller creates a bill of sale during or after the transaction, serving as proof of the purchase and property transfer.
Who Keeps the Bill of Sale?
Both parties should keep the bill of sale for their records. In most cases, the buyer keeps the original document, and the seller retains a copy or duplicate.