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If you’re selling your car to an individual, creating a bill of sale is a wise move. A bill of sale is a legal document that outlines the terms of the deal and serves as proof that the vehicle was sold. The document usually includes identifying information about the buyer and seller, conditions attached to the sale, the date of the transfer, and the car’s purchase price. 

Key Takeaways

  • A bill of sale is a legal document that outlines the terms of your agreement with the buyer.
  • Bills of sale are required to sell a car in 16 states.
  • Bills of sale may be required to register a new car.
  • In some states, a bill of sale must be notarized.

What Is a Bill of Sale? 

Bills of sale are used for a range of transactions, but are especially common in car, truck or recreational vehicle sales. The bill of sale is a record of the transaction, serving as an invoice and receipt, and outlines any guarantees or conditions attached to the sale. For the seller, a bill of sale can be used to prove that you’re no longer liable for the vehicle if it’s involved in an accident. If any disputes go to court, the bill of sale will be reviewed to see the terms both parties agreed to honor. 

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

In some states, the bill of sale must be notarized to be recognized as valid. Louisiana, Nebraska, Maryland, New Hampshire, West Virginia, and Montana all require a notary public to witness both parties signing the bill of sale

Even if your state doesn’t require a bill of sale, consider creating one to provide you extra protection. 

What to Include

If you’re creating your own bill of sale, it should include the following: 

  • Vehicle Details: List identifying information about the vehicle, such as year, make, model and color. 
  • VIN: The Vehicle Identification Number (VIN) acts as your car’s fingerprint, its unique identifier. 
  • Odometer Reading: Check the odometer at the time of the sale and record the mileage. 
  • Payment Details: Write down the sale price and how you agreed to be paid. In most cases, the buyer will pay a lump sum. However, if you agreed to installments, describe the terms you agreed to. 
  • Terms and Conditions: Make sure the bill of sale includes language that the car is being sold “as is”—that you make no guarantees about its condition or offer any form of warranty. 
  • Buyer and Seller Information: The names, addresses and phone numbers of both parties should be on the bill of sale. 
  • Signatures: Buyer and seller should sign and date the bill of sale. 

In some states, the department of motor vehicles or highway safety will have bill of sale templates for you to download. For example, Florida, California, and New York all have PDF bills of sale you can use. 

Other Necessary Documents

While the bill of sale is a useful document, ownership of the car doesn’t legally change hands until the title is transferred to the new owner. Typically, you and the buyer can go to the local DMV 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. After that, late fees may be imposed. 

Selling Your Car

If you plan on selling your car, a bill of sale protects you and prevents misunderstandings with the buyer. Even if your state doesn’t require you to have a bill of sale, having one will only help. 

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