Using a Vehicle Bill of Sale

The paperwork you need to sell your car may seem overwhelming, but you can make it easier if you familiarize yourself with the process. Creating a vehicle bill of sale is an important part of the transaction because it's evidence of transferring your car to the buyer. Not all states require a bill of sale, but it's a good idea to have one when selling your used car. Having a bill of sale prepared in advance can make the sale go smoothly.

How to use a vehicle bill of sale

An automobile bill of sale or used vehicle bill of sale is like a receipt that proves you've transferred the car to the buyer. A car bill of sale is not required in all states—as of 2018, one is not required in Alaska, Illinois, Michigan, Tennessee, and a few others. However, whether you're the buyer or the seller, it's highly advisable to have a bill of sale in private car sales in case there are issues later on.

A vehicle bill of sale shows that you, the seller, have sold your car. This document protects you because, as soon as you've sold your car, you're no longer liable should the vehicle be involved in an accident. If you're the buyer of a used car, a properly prepared bill of sale shows that you're the new legal owner of the car.

In some states, you must also transfer title to the buyer to complete the sale. Check with your state's motor vehicle department to see whether you need either a bill of sale or a signed title to sell your car or both.

Requirement of notarization

A few states require that a bill of sale also be notarized. As of 2018, these states are:

• Louisiana
• Maryland
• Montana
• Nebraska
• West Virginia

If you live in another state, that doesn't mean you can't get the bill of sale notarized, but it's not a requirement.

Private-party 'as is' sales

Sales of vehicles between private parties are common. Without using a car dealership, a seller may be able to get more money for the car, while a buyer usually ends up paying a lot less than when buying from a dealership.

Private-party sales usually mean you sell the car “as is," without any warranties except for the warranty that you, the seller, legally own the car. The seller doesn't warrant that the car is in excellent running condition and, once you sell the car, the buyer can't sue you for defects in the vehicle. If you're the buyer, you can have greater peace of mind about your purchase by having a mechanic inspect the car before you buy it or by checking the VIN on the motor vehicle department website to view the car's history.

Preparing a vehicle bill of sale

Vehicle bills of sale are sometimes provided on motor vehicle department websites. If you prefer to prepare one yourself, be sure to include the following information:

• Sale date
• Names and addresses of the buyer and seller
• State and county of the sale
• Purchase price of the car
• Description of the car, including body type, make, model, and year
• VIN
• Odometer reading
• A warranty that the seller owns the car and a statement that there are no other warranties
• A statement that the car is being sold “as is"
• Signatures of both parties with notarization, as required

Other information you can include in the bill of sale

If you want, you can also include additional information in the document, such as:

• License plate number
• Registration number
• Method of payment, such as certified check, money order, or bank check
• Any other identification numbers on the car
• The color of the car and any distinguishing characteristics, such as wood or paint designs
• If the car isn't paid in full as of the date of sale, how the buyer will pay the installments and what interest or fees, if any, apply for missed payments
• The vehicle's last date of inspection

If you follow the outline above, you can create a valid bill of sale on your own. If you would prefer the peace of mind that the document has been created properly, you can use an online service provider to help with the process.