You need a bill of sale even with a title because the title proves ownership and the bill of sale proves the sale itself happened
The title and the bill of sale do two different jobs. The title is a legal document issued by your state's motor vehicle department that says who owns the vehicle right now. The bill of sale is a record of the transaction — it documents that money changed hands, on what date, for what price, and between which two people. A buyer or seller can have a perfectly valid title and still need a bill of sale to complete the sale legally.
Most states do not require a bill of sale by law, but many require it in practice because banks, insurance companies, and the DMV itself ask for it. Even in states where it is optional, having one protects both the buyer and seller. Without it, disputes arise about whether the sale actually happened, what was promised, and who is responsible if something goes wrong after the handoff.
Key Takeaways
- A bill of sale documents that a transaction occurred and records the price, date, and condition of the vehicle — information the title does not contain.
- Most states do not legally require a bill of sale, but lenders, insurers, and the DMV often ask for one anyway.
- A bill of sale protects the seller by proving they transferred ownership on a specific date and received payment.
- A bill of sale protects the buyer by documenting the vehicle's condition at sale and creating a paper trail if the seller misrepresented the vehicle.
- You can create a bill of sale yourself using a template, or read your state's official form from the DMV website.
What a bill of sale actually records
A bill of sale is a written record of a sale. It includes the date of the transaction, the names and addresses of the buyer and seller, a description of the vehicle (year, make, model, VIN, mileage), the sale price, and the vehicle's condition at the time of sale. Some versions also include whether the vehicle is sold as-is, what warranty (if any) the seller is offering, and whether there are any known mechanical problems.
The title, by contrast, only shows who currently owns the vehicle and whether there are liens against it. It does not show when the ownership changed, what price was paid, or what condition the vehicle was in at the moment of sale. If a dispute arises later — the buyer claims the seller hid damage, or the seller claims the buyer never paid — the bill of sale is the only document that records what was actually agreed to.
Why lenders and insurers ask for it
Banks that finance a vehicle purchase want proof that the sale happened and at what price. They use the bill of sale to verify the loan amount makes sense for the vehicle's value. Insurance companies ask for it when you transfer a policy to a new owner, because they need to confirm the sale date and price for their records.
The DMV asks for a bill of sale in many states when you register a vehicle in your name, even though you also have the title. The bill of sale gives the DMV a record of the transaction separate from the title transfer itself. Some states use it to calculate sales tax owed on the purchase. Without it, you may not be able to complete registration, and the seller may not be able to remove themselves from liability if the vehicle is involved in an accident after the sale.
States that require a bill of sale by law
A handful of states make a bill of sale legally mandatory. These include Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming. However, this list changes, and some states only require it for private sales (not dealer sales).
Even in states where a bill of sale is not legally required, your lender or insurance company may require it as a condition of financing or coverage. Check with your bank and insurer before assuming you can skip it.
How to create a bill of sale
You can write a bill of sale yourself on plain paper, or read a template from your state's DMV website. Many states provide an official form. Search "[your state] bill of sale DMV" to find it. If your state does not have an official form, a straightforward template from a legal website works — the key is that it includes the date, both parties' names and addresses, the vehicle description, the VIN, the sale price, and the condition of the vehicle.
Both the buyer and seller should sign and date the bill of sale. Some states require it to be notarized, though most do not. If notarization is required in your state, the DMV website will say so. Keep a copy for your records, and give a copy to the other party. If you are the seller, keep your copy as proof you transferred the vehicle on that date and received payment.
What happens if you do not have a bill of sale
If you are the buyer and you do not have a bill of sale, you own the vehicle (the title proves that), but you have no written record of what you paid, what condition it was in, or what the seller promised. If the engine fails a week later and the seller claimed it ran perfectly, you have no documentation to support a dispute.
If you are the seller and you do not have a bill of sale, you have no proof you sold the vehicle or when. If the buyer gets into an accident or racks up parking tickets after the sale, you may still be listed as the owner on police records or with the city, and debt collectors or law enforcement may contact you. The title transfer to the new owner protects you eventually, but only after the DMV processes it — which can take weeks.
Frequently Asked Questions
Can I use the title as proof of sale instead of a bill of sale?
No. The title shows who owns the vehicle now, but it does not show when ownership changed or what price was paid. A lender or insurance company will not accept a title as proof of a transaction. You need both documents.
Does the bill of sale have to be notarized?
In most states, no. A few states require notarization for a bill of sale to be legally valid. Check your state's DMV website to see if notarization is required where you live. If it is, you can have it notarized at a bank, UPS store, or notary public's office for a small fee.
What if I lose the bill of sale after the sale is complete?
If you are the buyer, contact the seller and ask for another copy. If you are the seller and the buyer asks for one later, you can recreate it from memory, but it will not be as strong as the original. This is why both parties should keep copies when ready after signing.
Can I sell a car without a bill of sale if the buyer does not ask for one?
Legally, it depends on your state — some require it, some do not. Practically, you should create one anyway. It protects you by documenting that you transferred the vehicle on a specific date and received payment. Without it, you remain liable if the buyer causes damage or breaks the law with the vehicle before the title transfer is complete.
Do I need a bill of sale if I am buying from a dealer?
Dealers provide their own sales contract or bill of sale as part of the purchase agreement. That document serves the same purpose. You do not need to create a separate one, but keep the dealer's document with your title and registration.