How to Write a Bill of Sale for a Car

If you’re selling a car or buying a used vehicle, you may want to consider writing a bill of sale to record the transaction.

A bill of sale for a car outlines the terms of the transaction and provides proof that a transfer of ownership took place. It can protect you in the event of a dispute.

What is a bill of sale for a car?

As the name suggests, a bill of sale serves as a record of a financial transaction between two or more parties. This document is most commonly used when selling or buying cars, trucks and recreational vehicles (RVs).

It mainly serves as an invoice or receipt, but it can also outline any specific terms and conditions that must be met in order for the sale to take place. If the buyer and seller were to go to court, this document would be used to prove whether each party upheld their end of the bargain.

Not every state requires a bill of sale to be used when transferring ownership of a vehicle, but these do:

However, even if your state doesn’t require a bill of sale, it may be worth creating one anyway. It could provide an extra layer of legal protection to the transaction.

 Learn more about how to sell your car even if you still have a loan.

What should you include in your vehicle bill of sale?

Since each state has its own requirements for bills of sale, it’s a good idea to reach out to your local Department of Motor Vehicles (DMV) if you’re drafting a contract on your own. It can provide more specifics on what should be included in the document.

Gather all the information you’ll need, such as your car’s vehicle identification number (VIN), any car warranties and other items. Specifically, the bill of sale should include…

• Date of sale
• Purchase price
• Payment structure (whether the purchase price was paid in full or in installments)
• Payment method (cash, check, card)
• Odometer reading from when the sale took place
• Make and model of the car, including model year and color
• Vehicle identification number (VIN)
• Terms and conditions (whether the vehicle is being sold in as-is condition, or if there are any warranties)
• Full names and addresses of the buyer and seller
• Signatures from the buyer and seller, along with dates of signing
• Witness signatures and notary seal, if applicable

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Other considerations when transferring ownership of a vehicle

Sometimes a bill of sale for a car is not the only thing that’s needed to transfer ownership. Depending on your state’s requirements, you may also need one or more of the following:

Promissory notes

If the buyer is paying for the car in installments, some states may require you to include a promissory note along with the bill of sale. A promissory note is another written loan agreement, specifically one that outlines the loan’s terms and repayment structure.

Notarization

Some states may also require a bill of sale to be notarized in order to be legally binding. If this is the case in your state, both parties will have to sign the document in front of a notary public.

Before the buyer and the seller sign the document, the notary public will verify both parties’ identities. Then, after the signing takes place, the notary will stamp the document with their seal, indicating that the contract is valid.

Most notaries charge a nominal fee to use their services. If you don’t know where to find one, check with your bank, which may have a notary on staff.

Transferring title

Typically, a title transfer needs to take place in order for the sale of a vehicle to be considered complete.

Each state has its own title transfer and vehicle registration deadline, usually between five and 30 days from the time of sale. Missing this could mean facing an extra fee.

For the most part, a title transfer involves filling out some paperwork and paying any applicable taxes. The process may be easiest if the buyer and the seller go to the DMV together to fill out the necessary forms.