How to Write a Bill of Sale

Posted by Frank Gogol

If you are selling your car directly to a private buyer, you might be feeling overwhelmed as you don’t know how to write a bill of sale. Do you even need a bill of sale?

A bill of sale is a legal document that outlines the terms of your sale with your buyer. A bill of sale is an essential part of your sale as it protects you and prevents misunderstandings with the buyer.

Having an agreed bill of sale is a requirement before you can sell your car in 16 states. Many times your buyer might also require a bill of sale to transfer the car title and register their new car in their name. Either way, it is always a good idea to draw up a bill of sale, even if your state doesn’t require it. 

If you don’t know how to write a bill of sale, don’t worry. We cover all the basics in the article below. 

What is a Bill of Sale

A bill of sale is a legal document that is drawn up between the buyer and the seller of a car. It outlines the terms of your agreement with the buyer. As the seller, the bill of sale will verify that you have sold your car. 

The bill of sale will generally include general information about the vehicle and the terms of the sale. Its function is to protect you and prevent misunderstandings with the buyer.

In some states, the buyer needs to take a copy of the bill of sale to the Department of Motor Vehicles when they are transferring the car title. In these states, a bill of sale is a prerequisite. 

Even if a bill of sale is not a prerequisite in your state, it can still be a good idea to create a bill of sale. The bill of sale is a record of the transaction, serving as an invoice and receipt. As the seller, a bill of sale can be used to prove you’re no longer liable for the vehicle if it’s involved in an accident. The bill of sales also outlines any guarantees or conditions attached to the sale. If any disputes go to court, the bill of sale will be reviewed to see the terms both parties agreed to honor. 

When you are ready to sell your car, find out if your state provides a bill of sale form. If not, you can find out how to write a bill of sale with the information provided below. 

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Different Bill of Sale Formats for Different States

 Bills of sale are legally required in the following states: 

  • Alabama
  • Arkansas
  • Colorado
  • Connecticut
  • Hawaii
  • Idaho
  • Maine
  • Nebraska
  • New York
  • Ohio
  • Rhode Island
  • South Dakota
  • Vermont
  • Washington
  • West Virginia
  • Wyoming.

Additionally, Louisiana, Nebraska, Maryland, New Hampshire, West Virginia, and Montana all require a notary public to witness both parties signing the bill of sale.

Different states have different required bill of sale formats. Find your state’s motor vehicle department website to stay up to date with the current state requirements. Some states have a bill of sale form that you can download and fill in. 

While you’re on the department’s site, check whether your state requires that the bill of sale be notarized. Having the bill of sale notarized means it is stamped by a notary public as additional legal proof of its accuracy.

Writing a Bill of Sale for a Car

It can be tricky knowing how to write a bill of sale. If you’re creating your bill of sale, it should include the following elements.

Date of Sale

The date of sale is the date on which the sales transaction was completed. Ownership of the car doesn’t legally change hands until the title is transferred to the new owner. The buyer usually has 10-30 days after buying the car to apply for a title transfer,p pay the necessary title fees, and register the vehicle.

Description of Car

The bill of sale should list all the identifying information about the car. This will include the basic information like the year, make, and model of the car. Check the odometer at the time of the sale and record the mileage. 

Official information about the car, like its license plate number, should also be stated on the bill of sale. You should also include the Vehicle Identification Number (VIN). The VIN acts as your car’s fingerprint, its unique identifier.

Selling Price

Write down the sale price and how you agreed to be paid. In most cases, the buyer will pay a lump sum. If you agreed to instalments, describe the terms you agreed to. If the car is a gift, you should indicate that on the bill of sale and state the reduced price, if any money changed hands.

Warranty Information

Most private party sales are assumed to be “as is.” This means you make no guarantees about the vehicle’s condition or offer any form of warranty. If you have a different agreement, put it in the bill of sale.

Information about Buyer and Seller

The names, addresses, and phone numbers of both parties should be on the bill of sale. The buyer and seller should also sign and date the bill of sale.

Right above the signature, you should also include language stating that the information provided is accurate.

Other Necessary Documents

Once you complete the bill of sale or fill in the state form’s blanks, the buyer and seller should each receive a copy.

Remember that ownership of the car doesn’t legally change hands until the title is transferred to the new owner. The bill of sale is only one of the documents needed to transfer a car title. 

It is quite common to go to the local DMV along with the buyer and complete the necessary paperwork together.

The buyer usually has 10-30 days after buying the car to apply for a title transfer, pay the necessary title fees, and register the vehicle.

Conclusion

A bill of sale is a legal document that outlines the terms of your car sale with a buyer. Many states require a bill of sale to be signed before you can legally sell your car. However even if your state doesn’t require it, it’s always a good idea to still have a bill of sale in place. The bill of sale will prevent any misunderstandings and disputes about the sale in the future. 

If you need a bill of sale but you’re not sure how to write a bill of sale, just follow the easy tips we provided above. You’ll be covered legally and have your car sold in no time.

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