Bill of Sale for Car
Updated: May 5
If you are buying a used vehicle from a private party, you may need to confirm the sale with a bill of sale, or B.O.S, before registering your car with your state’s motor vehicle agency. A bill of sale records the transfer of possession of personal property from seller to buyer. You can also think of a B.O.S as an official receipt!
This article will be addressing and answering the following questions:
This article will walk you through everything you need to know about a vehicle bill of sale including all elements it should contain, where to find your state’s form, how to write one and helpful tips for both parties to keep in mind when using a bill of sale.
What is the purpose of a bill of sale?
The bill of sale certifies official documentation for both the buyer and the seller. The B.O.S acts as an invoice and a receipt during the vehicle transaction.
On the buyer’s side, a bill of sale acts as the receipt as it documents that a vehicle has been transferred into their possession in return for an agreed upon amount of compensation. In other words, it confirms that the buyer received the car and that the buyer paid the seller in full.
For a seller, a bill of sale acts as an invoice as it records the official transfer of possession of the vehicle without warranty.
A B.O.S can be used for much more than just proof of purchase. It also shows the vehicle’s date and sales price. It can also be useful to both the buyer and seller for tax purposes as both parties can prove the exact date that the vehicle transferred ownership. For a buyer, they can use the bill of sale when getting insurance to prove that they have full ownership rights of the vehicle. Furthermore, if the car is involved in an accident or is found at fault for a traffic violation, the seller can prove that they are not liable as the vehicle was no longer in their possession at the time of the incident.
What does a bill of sale contain?
A bill of sale typically contains the following:
Description of the vehicle being sold in the transaction
Vehicle’s make, model, body type, serial number, license plate number, year, vehicle identification number (VIN number)
Some states (like Tennessee) require the seller to complete an odometer disclosure statement
This form provides documentation of the exact odometer reading and requires that the seller warrants that this number is accurate information regarding the actual mileage of the car at time of sale.
Information on both the buyer and the seller
Printed names (both buyer and seller's name), addresses, phone numbers, drivers license numbers
The date of sale and amount paid
Description of the overall agreement between buyer and seller
Could include a statement that the seller accepts the sale of the described car for the specific price and confirms that they disclosed all information to the best of his or her knowledge
Could also include a statement that the buyer accepts the vehicle sold in as-is condition and that they accept the price of the bill of sale
Must include the presence of a warranty, most bill of sales do not have a warranty, but if there is, all conditions must be outlined by the seller
Signatures from both parties
After drafting your own bill of sale, both parties should receive a copy of the signed form.
Special State Requirements
Some states have special requirements when drafting a bill of sale. For example, some states require that a public notary be present when signing the bill of sale. In this case, the notary public will sign, date and apply his or her notary seal on the bill. Even if your state does not require the presence of a public notary at the time of signing, it can be helpful as it protects both parties.
Another example of special requirements that you might run into is that some states require a “promissory note” section on the bottom of the bill of sale to be filled out. This added section is included in the form if the buyer and seller agree on an installment plan to pay for the vehicle.
This note contains the following:
Names of both parties
Vehicle’s principal purchase price
Number of payments and amount of each payment that the buyer must pay to complete the purchase
Where can you find a bill of sale form?
Some states require that you use a bill of sale form from your state’s Department of Motor Vehicles. You can find the form at a local office or from their website. Find your nearest DMV here. If your state does not require one or does not outline exactly what to include in a bill of sale, you can find a generic form online, use an editable template on the Microsoft Office Templates store or draft your own (refer to the heading, “What does a bill of sale contain?”)
Websites that offer generic bill of sale templates that we suggest include:
What Are Some Tips When Using a Motor Vehicle Bill of Sale?
A bill of sale is an official binding legal document. Once you sign the form, you cannot change the terms of the contract, even if they are inaccurate. Some tips to keep in mind when signing this document include:
If you are the buyer, make sure you take your time and review the fine for inconsistencies between the terms and what you initially agreed upon
If the contracts states that you accept the car “as-is,” this means that you agree to buy the vehicle with all obvious and hidden defects and it also signals that you acknowledge that the seller is not offering any warranty coverage
For these reasons, bring a professional mechanic to inspect and take a look at the car’s condition
A vehicle’s bill of sale is NOT proof of ownership
To claim full ownership, the new owner must have a title
In order to get a title transfer, the car must be free of claims, liens or encumbrances
If the car was financed, whoever is servicing the loans remains the owner of the title until the loans are paid by either the buyer or the seller
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