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Vehicle bill of sale: How-to guide 

You've listed your car and found a buyer, or you are an excited new buyer of a car—now it's time to complete the deal. In today's market, you need more than a handshake to finish this transaction. You would be required to file with your state’s motor vehicle department and other local agencies. This process calls for a complete, well-drafted vehicle bill of sale. A bill of sale outlines the terms of your arrangement and prepares for your car’s new title and registration.

Keep reading to know more about a vehicle bill of sale, its components, and key aspects to be taken care of while drafting this document.

What is a vehicle bill of sale?

A bill of sale is like a receipt. It proves that ownership of a particular piece of property has changed hands. It also details the terms of the sale, including information about price, delivery, and condition. Bills of sale for vehicles can help to prove the identity of a vehicle’s true legal owner. Moreover, many states and counties use these documents to determine the amount of sales tax owed on the transaction, if any. A sample vehicle bill of sale is attached at the top of this page.

Vehicle bill of sale template by LegalZoom. Create and download bills of sale easily!

Which vehicles are covered under the automobile bill of sale?

A vehicle bill of sale covers a wide range of vehicles, including:

  • Cars
  • Trucks
  • Motorcycles
  • Boats
  • RVs (Recreational Vehicles)
  • ATVs (All-Terrain Vehicles)
  • Trailers
  • Snowmobiles
  • Personal Watercraft

Essentially, it can be used for any motorized or non-motorized vehicle that is being bought or sold.

What are the types of vehicle bills of sale?

There are a few types of vehicle bills of sale:

  1. Standard vehicle bill of sale: This type is used for the typical sale of a car between a buyer and seller.
  2. As-is bill of sale: This type indicates that the automobile is sold in its current condition, with no warranties.
  3. Gift bill of sale: This one is used when a vehicle is given as a gift rather than sold.
  4. Dealer bill of sale: This document is provided by a car dealership, including details of the sale and any warranties.
  5. Odometer disclosure bill of sale: This is required by federal law for vehicles under 10 years old, confirming the vehicle’s mileage at the time of sale.

What are the key components of an automobile bill of sale?

The following instructions will help you understand the terms of your sale bill. 

1. Location of transaction

Write in the name of the state and county where the transaction will take place. If the parties are from different counties, use the state and county where the automobile is located.

2. Purchase price

Be sure to include the full price paid, including any previous down payments that were made to secure the automobile. 

3. Names and addresses of parties

Provide the details of the involved parties. In a sale bill, the party that will sell the automobile is called the “seller,” and the one who buys it is called the “buyer.”

Note that only the individual whose name is on the title of an automobile is permitted to sell it.

For example, if a married couple is selling a car but that car is titled in the wife’s name, only the wife should sign the sale bill.

4. Automobile description

Here, include the information about the automobile. Be as specific as possible, making sure that the automobile being sold can be identified clearly from the description. You must include the location, make, model, body type, year, and Vehicle Identification Number (VIN). For example:

  • Location: Include the county and state where the automobile is currently situated.
  • Make: Name of automobile companies like Ford, Chevrolet, Lincoln, BMW, etc.
  • Model: Corvette, M5, Mustang, etc.
  • Body type: Sedan, Coupe, Convertible, SUV, etc.
  • VIN: It is a vehicle’s 17-character unique identifier. Generally, it is located in one of the following places: the dashboard, the steering column, the vehicle’s firewall, the driver-side door, or the passenger-side post. If you can’t locate this number in these spots, you can find it in the user manual. 

5. Seller’s representations and warranties

In this section, the seller promises that he/she owns the automobile, and no other party holds an interest in it.

6. Buyer’s representations and warranties

Here, the buyer promises that the individual signing the document has the authority to do so.

7. No other warranties

This element states that the car is being offered "as is." The seller declines any responsibility after the sale of the vehicle, which will be mentioned in this section; therefore, the buyer should take note if the car exhibits issues in the future.

8. Inspection

A summary of recent mechanical inspections done on the motor vehicle should be mentioned here. If the seller knows of any defects in the automobile, those problems must also be disclosed here. Any known defects or any major accident history that are not reported could invalidate the transaction and may bring charges of fraud later. 

9. Delivery of automobile

Mention where and when the purchaser should pick up the vehicle.

10. Conveyance of title

Indicates that title to the vehicle will be given to the buyer on the day it receives that vehicle. This section also includes the seller’s promise that they will sign every document needed to effectuate the title transfer.

11. Cancellation of insurance and tags

The seller agrees to cancel any remaining insurance or tags that were maintained on the automobile.

12. Additional terms of sale

If there are additional terms you’d like to add to your agreement, enter those here.

For example, the parties may wish to include a requirement that the car be cleaned thoroughly before the delivery date.

13. Signatures

Each party must sign and print their name. Several states require that each party provide a phone number as well. Please check your state guidelines. Be sure to date this document, as a number of important deadlines start to run on the sale date, such as the title transfer, sale reporting, and lien release timeframe. If a third party witnessed the signing, have that person also sign the document.  

14. Odometer disclosure statement 

Federal and state laws require an accurate report of a vehicle’s mileage on its transaction bill so as to avoid odometer fraud. Some states require the odometer disclosure statement to be on a page separate from the transaction bill itself. It should include details like the seller’s name and the number of miles on the automobile.

What rules and regulations should be considered for the vehicle bill of sale?

In the United States, the requirements for a vehicle bill of sale vary by state. While federal law does not mandate a bill of sale for vehicle transactions, many states have specific regulations regarding its use. Some states may ask for a notarized bill of sale, while others may not require one at all. It's essential to consult your state's Department of Motor Vehicles (DMV) or equivalent agency to understand the specific requirements in your area.

For your convenience, here are links to the rules for several states:

What are the buyer and seller responsibilities to keep in mind?

An image of a car's tire and wheels during sunset.

Let us now look into what you need to keep in mind whether you are buying or selling a car.

1. Ensure the contact information is correct

Getting the correct name and physical address of the parties involved in your deal is essential. This helps in contacting the person or company in case an emergency arises regarding the ownership of the automobile. 

2. Handover bill of sale only after receiving the sum

Give the buyer a completed sale bill only after the transaction is finalized, and you have received your money if you are selling the car. If the buyer has written proof that the payment is already made, it could be challenging to collect any unpaid balances as the transaction bill indicates that you have already been paid.

3. Execute a promissory note, if required

A signed transaction bill means that the payment of the automobile is complete on the transaction date. If the individual buying intends to make a down payment at the time of purchase and pay the remainder over time, the parties should execute a promissory note for their vehicle transaction and use a bill of sale that contemplates such deferred payment.

4. Make copies to sign

Sign two copies of the sale bill, one for you and one for the other party. This is important as both parties must have a copy to prove the transaction took place. In the absence of this proof, conflicts would be difficult to resolve. 

5. Involve the third party (optional)

Although not strictly required, consider bringing a third party with you when the bill of sale is signed. If questions arise about the transaction, that individual can serve as a reporter of the transaction. Alternatively, you and the other party can notarize your signatures on the document. 

6. Record the bill

Once your sale bill is complete and signed, visit your local county clerk or tax office to record the bill. They will use the bill of sale to estimate your sales tax and record the transaction.

7. Confirm the transaction with the state DMV

The seller should contact its state Department of Motor Vehicles immediately after completion of the transaction and let them know the automobile has been sold and to whom. This will protect the seller if a ticket is issued or an accident occurs during the period between the transaction and the vehicle's re-titling.

To complete the transfer of title, both the seller and the buyer should send a copy of the sale bill to their state’s DMV. Some states require that the seller and buyer report the title transfer within ten (10) days of the transaction.

8. Complete any extra requirements

Additional steps may be required for your automobile transfer. Check with your local motor vehicle agency and tax authority to see what documents may be needed.

9. Take out the old license plate

Remove the vehicle’s license plate before physically transferring it to the buyer. In many states, this is required by law.

What are the other documents required for a vehicle sale?

In addition to the simple vehicle bill of sale, you may need the following documents to complete the sale and transfer of ownership:

  1. Title certificate: The original vehicle title, signed over to the buyer by the seller. This proves ownership and is necessary for transferring the title.
  2. Odometer disclosure statement: Required in some states, this statement records the vehicle’s current mileage at the time of sale.
  3. Identification: Both buyer and seller should have valid photo IDs to verify identities during the transaction.
  4. Proof of insurance: Many states ask for proof of insurance to register the vehicle in the buyer’s name.
  5. Smog or emissions certificate: In states with emissions requirements, a recent emissions test certificate may be necessary for registration.
  6. Lien release: If the seller has a lien on the vehicle, they need a release document from the lender to confirm the loan has been paid off.
  7. Application for title and registration: Typically completed by the buyer, this form is submitted to the Department of Motor Vehicles (DMV) for registering the car.

These documents can help ensure a smooth, legally compliant transfer process and protect both buyer and seller.

Why choose the LegalZoom vehicle bill of sale template?

As you already know, a well-prepared vehicle bill of sale is crucial for documenting the transfer of ownership and protecting both buyer and seller from future disputes. A professional template can give you a jumpstart to add crucial details and draft your vehicle bill of sale form much faster.

LegalZoom’s printable vehicle bill of sale template is pre-drafted and formatted, making it easy to use. Simply follow the guided prompts to fill in your details, and within minutes, your bill of sale will be ready for download in a PDF format or available for printing.

Customization is also a breeze with LegalZoom’s rich editor, allowing users to tailor the template according to specific needs. After both parties have agreed on the terms, LegalZoom's online eSignature feature lets them securely sign the document from anywhere, making the process swift and hassle-free. 

Additionally, users can opt for attorney assistance for extra guidance to ensure their document is legally sound and comprehensive.

Conclusion

Navigating the process of completing a vehicle sale bill with the right steps and attention to detail can be straightforward and convenient. Remember, a well-executed vehicle sale bill is not just a formality—it's your protection and proof in a legal transaction. Ensure all pages are filled out correctly to make your vehicle transfer smooth and hassle-free. By following these guidelines, you can confidently complete your vehicle sale and move on to your next experience.

Frequently asked questions

What does an automobile bill of sale mean?

A bill of sale is a receipt transferring ownership from seller to buyer. A bill of sale for an automobile legally transfers the vehicle ownership from the person selling to the individual buying and clarifies details like title transfer and payment.

What information is required to complete a bill of sale?

To fill out the bill of sale form, you’ll need the name and contact details of the buyer and seller, the vehicle’s make, model, body type, year of purchase, and registration number. 

Does my bill of sale need notarization?

Notarization is not always required, but it can add extra legal protection. Check your state's specific requirements to be sure.

What documents are required along with the vehicle bill of sale?

You'll typically need the vehicle title, a valid photo ID, proof of insurance, any accident history, and sometimes a smog or emissions certificate, along with the automobile bill of sale. Check with your local DMV for any additional requirements.

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