A bill of sale is an important document in any private transaction for a used car, motorcycle, boat, RV, or other type of vehicle.
If you’ve never been involved in a used car sale through a private party, you may be wondering exactly what a bill of sale is, what it’s used for, and when it’s required.
This page will answer all of your questions and then some.
Plus, we’ll point you in the right direction towards some of our other free resources and information to help you get the transaction done right.
Ready to get started? Check out our free bill of sale template.
What is a Bill of Sale?
A bill of sale is a legal document that is used to record the sale and transfer of a used vehicle.
It is common for purchases of higher value items, such as:
- Cars.
- Trailers.
- Motorcycles.
- RVs and motorhomes.
- Off-road vehicles.
- Boats.
- Livestock.
- Property.
For the purposes of this website, we’re interested in bill of sale documents for the private sale of used vehicles.
What is a Bill of Sale Used For?
A bill of sale is used to document the transaction and act as proof of transfer and purchase when selling a used vehicle.
In a used car sale between private parties, a bill of sale is a key document to protect both the buyer and the seller.
A bill of sale should be used any time you sell or buy any item of significant value.
How Does a Bill of Sale Work?
A bill of sale is a document that benefits both the buyer and the seller of a used vehicle.
For one, it serves as a receipt of the transaction.
As the seller, a bill of sale protects you from liability. If the buyer claims something other than what was agreed upon in the transaction, you have the signed bill of sale to protect yourself.
As the buyer, the signed bill of sale helps protect you from a seller who tries to back out of a transaction or alter the deal after the fact.
Do I need a Bill of Sale when Buying a Used Car?
While a bill of sale is not always required by every state Department of Motor Vehicle when buying or selling a used car, it is always a good idea.
As the buyer, you should definitely retain a signed copy of a bill of sale for the vehicle you are buying.
The seller should keep a copy for their records too.
Even when it is not a requirement to transfer the vehicle, it can help:
- Eliminate any potential disputes that arise.
- Provide proof of the sale and the agreed upon sale price.
- Provide a paper trail of the chain of ownership.
Additionally, a bill of sale is extremely valuable in cases of purchasing an old vehicle where the title may be lost and the previous title holder may be deceased.
When is a Bill of Sale Required?
Not every state DMV requires a bill of sale for private vehicle transactions.
The states that do require a bill of sale include:
- Alabama
- Arkansas
- Colorado
- Connecticut
- Hawaii
- Idaho
- Maine
- Nebraska
- New York
- Ohio
- Rhode Island
- South Dakota
- Vermont
- Washington
- West Virginia
- Wyoming
However, even if your state is NOT on that list, you should still make one whenever buying or selling a used vehicle.
What Does a Bill of Sale Look Like?
While there is no universal format for a bill of sale, all bill of sale forms should include the same information.
At a minimum, the bill of sale should include:
- The details and signature of the seller.
- The details and signature of the buyer.
- The details about the vehicle that is being sold.
- The date of the transaction.
- The sale price.
- Any agreed upon warranties that come along with the sale.
Learn how to fill out a bill of sale form here.
What makes a bill of sale valid?
Generally, a bill of sale is valid so long as it contains all the necessary information and signatures.
In some states, a bill of sale is a required document in the title transfer process. Additionally, some states require that the bill of sale be notarized.
Be sure to check out your state’s requirements when buying or selling a used vehicle.
Check out some examples of what a bill of sale looks like below.
How do I get a Bill of Sale?
In most cases, you have a few different options for getting a bill of sale. They include:
- Checking your state DMV website for an official bill of sale form.
- Handwriting a bill of sale yourself.
- Using a generic bill of sale template.
As long as you record all the necessary information and capture all the required signatures, you should be good to go!