What a Colorado bill of sale is and why you need one

A bill of sale is a written record that documents the transfer of a vehicle from one owner to another. In Colorado, it serves as proof that you bought or sold a car, truck, or motorcycle, and it protects both the buyer and seller by creating a dated, signed record of the transaction.

Colorado law does not require a bill of sale to register a vehicle, but the Colorado Department of Revenue's Division of Motor Vehicles strongly recommends one. If a dispute arises later—about the sale price, the condition of the vehicle, or who owned it on a particular date—a bill of sale is your only written evidence. Without one, you have only your word against the other person's.

The bill of sale also protects you from liability. If you sell a car and the buyer causes an accident before the title transfers to their name, the state may still consider you the registered owner. A signed bill of sale with the date and the buyer's signature shows you no longer owned the vehicle at the time of the incident.

Key Takeaways

  • Colorado does not legally require a bill of sale, but the state recommends one because it is your only written proof of who owned the vehicle and when.
  • You can use the Colorado-specific form (MV-5) or write your own bill of sale as long as it includes the vehicle identification number, both parties' names and addresses, the sale price, and the date and signatures of both buyer and seller.
  • The bill of sale should be completed before or at the time of the sale, signed by both parties, and kept by both the buyer and seller as a permanent record.
  • A bill of sale does not transfer the title itself; the buyer must still submit the title and registration documents to the Colorado DMV to become the legal owner.

Colorado's recommended bill of sale form

The Colorado Division of Motor Vehicles does not issue an official bill of sale form, but it does provide guidance on what information must be included. Many Colorado counties and the state's DMV website point buyers and sellers to use a standard bill of sale template that covers all required details.

You can obtain a bill of sale template from the Colorado DMV website, from your county clerk's office, or from a notary public. Some title companies and car dealerships also provide their own versions. The form does not need to be notarized in Colorado unless you choose to have it notarized for extra protection, but notarization is not a legal requirement.

If you prefer to write your own bill of sale instead of using a template, Colorado law allows it. Your handwritten or typed document is valid as long as it includes all the essential information and is signed by both parties.

Information that must be included on the bill of sale

Whether you use a template or write your own bill of sale, include the following details:

  • The vehicle identification number (VIN), which appears on the dashboard and the title
  • The year, make, model, and color of the vehicle
  • The license plate number (if one is currently assigned)
  • The full name and current address of the seller
  • The full name and current address of the buyer
  • The sale price (write the amount in both numbers and words to avoid disputes)
  • The date of the sale
  • The odometer reading at the time of sale (required by federal law)
  • A statement of the vehicle's condition (for example, "sold as-is" or a description of any known defects)
  • The signature of the seller and the signature of the buyer

If the vehicle has a lien (meaning a bank or lender still owns part of it), note that on the bill of sale. The buyer should understand that they cannot take full ownership until the lien is paid off and released by the lender.

When to complete and sign the bill of sale

Complete and sign the bill of sale at the time of the sale, before money changes hands. Both the buyer and seller should sign and date the document in front of each other. This prevents later disagreements about when the sale occurred or what was agreed to.

Make at least two copies—one for the seller and one for the buyer. If you have the document notarized, the notary will provide you with a certified copy. Keep your copy in a safe place, along with any other vehicle records, for at least three to five years.

If you are buying a used car from a private seller, ask for the bill of sale before you hand over payment. If you are selling, do not release the keys or the title until the buyer has signed the bill of sale and you have a copy for your records.

How the bill of sale relates to the title transfer

The bill of sale and the title are two separate documents. The bill of sale proves the sale happened; the title proves who owns the vehicle. After you sign the bill of sale, the buyer must take the title, the bill of sale, and other required documents to the Colorado DMV to register the vehicle in their name.

The seller should also notify the Colorado DMV that they have sold the vehicle. You can do this by submitting the title with a note that the vehicle was sold, or by completing a release of liability form. This step removes you from the state's records as the owner and protects you from future liability or parking tickets associated with the vehicle.

Until the buyer completes the title transfer at the DMV, the vehicle remains registered in the seller's name. This is why it is important to complete the bill of sale promptly and keep a copy—it documents that you no longer own the vehicle, even if the title has not yet been updated.

What to do if you lose the bill of sale

If you have already sold the vehicle and lost your copy of the bill of sale, you can request a duplicate from the other party. If they refuse or you cannot reach them, you can file a report with the Colorado DMV explaining the situation. The DMV record of the title transfer will show who owns the vehicle, but you will not have your personal copy of the sale agreement.

If you are the buyer and you lost the bill of sale before registering the vehicle, ask the seller for another signed copy. If the seller will not provide one, you can still register the vehicle using the title alone, but you will have no written record of the sale price or condition. For future transactions, always keep copies of the bill of sale in multiple locations.

Frequently Asked Questions

Does Colorado require a notary to sign the bill of sale?

No, Colorado does not require a notary. The bill of sale is valid when signed by both the buyer and seller. However, having it notarized adds an extra layer of proof that both parties actually signed it, which can be useful if a dispute arises later.

Can I use a bill of sale from another state?

Yes, a bill of sale from another state is generally accepted in Colorado as long as it includes all the required information and is signed by both parties. However, using a Colorado-specific template ensures you have included everything the state recommends and avoids confusion when you register the vehicle.

What if the seller will not sign a bill of sale?

A seller who refuses to sign a bill of sale is a red flag. It suggests they may not be the legal owner, the vehicle may have outstanding liens, or they are trying to avoid a paper trail. Do not complete the purchase without a signed bill of sale. If you have already paid for the vehicle, consult a lawyer before proceeding.

Do I need a bill of sale if I am buying from a dealership?

Dealerships provide their own sales contracts and paperwork, which serve the same purpose as a bill of sale. You do not need a separate bill of sale, but keep the dealership's paperwork in your records as proof of purchase.

What should I do with the bill of sale after I register the vehicle?

Keep your copy of the bill of sale permanently, along with your vehicle title, registration, and maintenance records. It proves when you bought the vehicle and what you paid for it, which can be useful for insurance claims, resale, or tax purposes.