Whenever you sell a vehicle, drawing up a bill of sale is a wise move. This document typically includes:
The buyer's and seller's identifying information.
The date of the transfer.
The purchase price of the vehicle.
Any restrictions linked to the transaction.
A bill of sale documents a sale and the transfer of property from one party to another. Although it can apply to the sale of various products, it’s most commonly used for vehicles.
What is a Bill of Sale?
Primarily used in vehicle sales, a bill of sale serves as a record of the transaction, acting as both an invoice and a receipt. It outlines any promises or conditions tied to the sale. If you're the previous owner, a bill of sale can demonstrate that you're no longer responsible for the vehicle in case of an accident. In disputes, a judge will review the bill of sale to see what provisions both parties agreed upon. Several states require bills of sale by law, including:
Alabama
Arkansas
Colorado
Connecticut
Hawaii
Idaho
Maine
Nebraska
In some states, the bill of sale must be notarized to be valid. This is mandatory in Louisiana, Nebraska, Maryland, New Hampshire, West Virginia, and Montana. Even if your state doesn’t require it, having a bill of sale provides added protection.
What Should Be Included?
If you're creating a bill of sale, ensure it includes the following:
Vehicle Details: Include the year, make, model, and color.
Odometer Reading: Check and record the mileage at the time of sale.
Payment Details: Specify the sale price and payment method. If payment is in installments, detail the arrangement.
Terms and Conditions: State that the vehicle is sold "as is," meaning no warranties or promises regarding its condition.
Buyer and Seller Information: Include names, addresses, and contact details of both parties.
Signatures and Dates: Both buyer and seller must sign and date the bill of sale.
Some states provide blank bill of sale templates through the Department of Motor Vehicles or Department of Highway Safety, which you can download and use. Florida, California, and New York, for example, offer downloadable bills in PDF format.
Other Essential Documentation
While the bill of sale is important, the vehicle’s ownership isn’t legally transferred until the title is handed over to the new owner. Typically, both buyer and seller should visit the local Department of Motor Vehicles to complete the necessary paperwork. After purchasing a vehicle, the buyer usually has 10 to 30 days to apply for a title transfer, pay title fees, and register the vehicle, or they may incur a late fee.
Selling Your Car
To protect yourself and avoid misunderstandings with the buyer, it’s crucial to have a bill of sale when selling your vehicle. Even if it’s not required by state law, it’s in your best interest to have one.
