A Bill of Sale is a legal document that transfers ownership of an item from one person to another. These forms are similar to retail receipts but are used to record the sale or transfer of valuable things like cars.
This document protects the buyer and the 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 are buying or selling any item over $500.
Bill of Sale Forms – By State
- District of Columbia
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
Bill of Sale Forms – 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 signed, both the buyer and the seller should keep a copy of the bill of sale to prove that the transaction occurred.
Not all states or counties require a bill of sale, but it is generally recommended to sign one to add an extra layer of protection in case of future disputes.
If the asset is transferred as a gift, this can be recorded on the bill of sale, and the purchase price can be set to $0. Depending on your state, you may also need to file an Affidavit of Motor Vehicle Gift Transfer or similar document. For a vehicle purchase, buyers should keep an original copy of the document for registration.
When Should I Use a Bill of Sale?
You should use a bill of sale 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 certain items.
You can use it to transfer ownership of items such as the following:
- Vehicles (cars, RVs, motorcycles, trailers, campers)
- Watercraft (boats, jet skis)
- Personal property (bicycles, furniture, jewelry)
- Animals (horses, dogs, cats, livestock)
- Equipment (tools, exercise equipment)
What happens if I don’t use a Bill of Sale?
If you don’t use a bill of sale, you could encounter legal issues after selling an item. Bills of sale are essential to prove a cash sale took place, and they protect both the buyer and seller in case of a dispute.
For example, you cannot legally prove that an item was sold without a bill of sale to record the transaction.
Therefore, the seller may still be responsible for violations the purchaser commits after transferring the item (such as speeding tickets in the case of a vehicle).
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 have agreed to the purchase and sale of a specific vehicle, they must negotiate the sale price and other terms of the agreement.
The parties should also discuss the payment method and whether the payment will be made upfront or in installments. The vehicle bill of sale must include details of the parties, the vehicle, 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 does not have a warranty, the item is sold “as-is.” Therefore, the buyer must check the item thoroughly and ask any questions before the sale is completed and the form is signed.
Step 2 – Obtain the Vehicle Identification Number (VIN)
Next, 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 is listed 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 will also be able to see whether the car’s odometer has ever been rolled back when it was last inspected and whether it was classified as a “lemon” (a vehicle with a significant malfunction or defect that makes it unsafe to drive).
Step 3 – Gather Vehicle Documents
The seller must gather and provide various documents to complete the sale and transfer ownership to the buyer.
- 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 (maybe 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. Moreover, you must 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 get the bill of sale notarized.
If your state does not require notarization, consider notarizing the bill of sale to prove the transaction happened 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 sales tax.
They can do this by taking the following documents and fee(s) to a local motor vehicle department office:
- 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)
Bill of Sale Sample
The following template is a generic bill of sale that you can use to transfer ownership of any personal property.
DMV Offices in Each State
Whether you’re buying or selling a vehicle or any other item, knowing the following legal terms is essential to fill out your form correctly.
- Buyer — The person who is purchasing the item. She was also known as the purchaser.
- Seller — The person (or party) selling the item.
- As-is — “As-is” means that the item is sold in its current condition at the time of sale and that the buyer accepts any present faults.
- Warranty Provision — A written guarantee that the seller will repair or replace the item if there are any defects over a specified period. If you don’t include a warranty provision, the item is sold “as-is.”
- Certificate of Title — Separate paperwork that states an item’s legal owner. If applicable, this should be transferred when completing the sale. Note that the document proves the transaction occurred, but it’s not always proof of ownership.
- Sales Tax — A tax included in the price of the sale of goods. This tax varies by state, county, or municipality.
- Notarization — A process that authenticates a legal document and the parties’ signatures. Not all states require a bill of sale to be notarized.
- Odometer Reading — A section of an auto bill of sale where you record the vehicle’s mileage at purchase.
- Vehicle Identification Number (VIN) — A unique identification code for a motor vehicle that you must include in a car bill of sale.
Frequently Asked Questions
Is a Bill of Sale legally binding?
Yes, a bill of sale is a legally binding contract between a seller and a buyer.
The document is evidence of an agreement between the two parties that a sale has occurred between them. Some sales agreements can also be a promise that a sale will occur in the future.
Does a Bill of Sale need to be notarized?
Certain types of bills of sale need to be notarized.
For example, it is a requirement that a vehicle bill of sale is notarized in some states. But even if it’s not a legal requirement in your state, getting your document notarized is advised, as it provides legal protections you may need in the future.
Can you get a title with a Bill of Sale?
Yes, in some states, you may be able to get a title to the property you purchased with a Bill of Sale.
Although this mostly happens when buying a vehicle. For some types of property, such as real estate, you will need more legal documents to own the property, such as a title transfer fully.
What’s the difference between a sales agreement and a bill of sale?
A sales agreement and a bill of sale transfer ownership differ. A sales agreement is used before the goods are exchanged, while a bill of sale is used during or after the transaction. In this sense, a sales agreement outlines the purchase terms, and the bill of sales acts as a receipt to record that the purchase took place.
Is a bill of sale the same as a title?
A bill of sale is not the same as a title, but these documents are complementary. Buyers can use the bill of sale to obtain a title.
If the former certifies the transfer of ownership, the latter identifies the purchaser as the vehicle’s legal owner.
Do I need a bill of sale if I have the title?
This depends on the state requirements for registering a vehicle. A bill of sale is required in most states because it outlines the sales tax, selling price, and other fees that must be collected for registration purposes.
Who keeps the bill of sale?
Both buyer and seller should keep a copy of the bill of sale as proof that the transaction took place.
In most cases, the buyer keeps the original document to obtain a title and register the vehicle, and the seller keeps the copy.