A bill of sale is a written record that you and the seller (or buyer) sign to document the transfer of a vehicle from one owner to the next
It serves as proof that money changed hands, that the seller no longer owns the car, and that you now do. A bill of sale protects both parties: it shows a lender or insurance company that the transaction was legitimate, it creates a paper trail if a dispute arises later, and it can protect you if the seller claims the car was stolen or if the car turns out to have an outstanding loan against it.
The bill of sale is separate from the title document itself — the title is the legal ownership record kept by your state's Department of Motor Vehicles or equivalent agency. The bill of sale is the private agreement between you and the other party. Many states do not require a bill of sale by law, but having one is nearly always a good idea, especially when buying from a private seller rather than a dealership.
Key Takeaways
- A bill of sale documents the sale price, the vehicle identification number (VIN), the odometer reading, and the signatures of both buyer and seller.
- Most states do not legally require a bill of sale, but it protects you if a dispute arises or if the seller later claims ownership of the car.
- You can use a generic template from your state's DMV website, a legal document service, or a straightforward handwritten form as long as it includes the essential details.
- Both the buyer and seller should keep a signed copy, and you should complete the bill of sale on the same day you exchange money and keys.
What information must appear on a bill of sale
The bill of sale should include the full legal names and addresses of both the buyer and the seller. It must show the vehicle identification number (VIN), which you can find on the dashboard, the driver's side door jamb, or the title document itself. The odometer reading at the time of sale should be recorded — this is important for detecting odometer fraud and is required by federal law in most states.
The sale price must be stated clearly. If you are paying in cash, write "cash." If you are financing part of the purchase, note the amount paid in cash and the amount financed. The date of the sale should appear on the form. Many templates also include a line for the vehicle's condition (for example, "as-is" or "with warranty"), though this is optional. Both parties must sign and date the form.
Some states request additional information, such as the title number, the make and model of the vehicle, the color, or whether there are any liens (outstanding loans) against the car. Check your state's DMV website to see if there is an official template or recommended format, though a generic template will work in most cases.
Where to find a bill of sale template
Your state's Department of Motor Vehicles website often provides a free bill of sale form or a link to one. Search "[your state] DMV bill of sale" to find it. If your state does not offer an official form, you can use a generic template from a legal document website, a free template from a reputable source, or even a handwritten form on plain paper.
The form does not need to be fancy or printed on special paper. What matters is that it contains the essential information, is signed by both parties, and is dated. If you are buying from a dealership, the dealership will usually provide its own bill of sale form, which you should review before signing to make sure it includes all the details above.
When and how to complete the bill of sale
Complete the bill of sale at the time of the sale, ideally before you hand over money or keys. Both the buyer and the seller should read it carefully to make sure all information is accurate. If there are errors, cross them out, write the correction above, and have both parties initial the change. Do not use white-out or tape — handwritten corrections with initials are clearer and harder to dispute later.
Each party should sign and date the form in front of the other. Some people have the transaction witnessed by a third party or notarized, though this is not required in most states. If you are concerned about the legitimacy of the sale or if the seller is reluctant to sign, a notary public can verify the signatures for a small fee (usually $5 to $15) and add an extra layer of protection.
How a bill of sale protects you as the buyer
If the seller later claims the car was stolen or that they still own it, the signed bill of sale is your proof that the sale was legitimate and that you paid for it. If the car has an outstanding loan and the lender tries to repossess it, the bill of sale shows when you purchased it and can help you prove you were an innocent buyer. If the seller misrepresented the condition of the car or promised repairs that were never made, the bill of sale (especially if it notes the condition as "as-is") protects you by showing what was agreed to at the time of sale.
The bill of sale also protects you when you register the car with your state's DMV. When you submit the title transfer paperwork, you will usually need to include the bill of sale or reference the sale price on the title process. This creates an official record that you are the new owner and helps prevent title fraud.
How a bill of sale protects the seller
The bill of sale protects the seller by showing that they transferred ownership on a specific date. If the buyer later gets into an accident or receives a traffic ticket in the car, the bill of sale proves the seller no longer owned the vehicle at that time. If the buyer fails to register the car or pay taxes on it, the bill of sale shows the seller is not responsible.
The bill of sale also protects the seller if there is a dispute over the sale price or the condition of the vehicle. If the buyer later claims the seller promised something that was not in writing, the bill of sale (which typically states the car is sold "as-is") can help the seller defend against that claim.
What to do after both parties sign
Make at least two copies of the signed bill of sale — one for you and one for the seller. Keep your copy in a safe place, such as a file folder with your other car documents or a safe deposit box. You will need it when you register the car with your state's DMV and when you insure it.
Within the timeframe required by your state (usually 10 to 30 days), submit the title transfer paperwork to your state's DMV along with the bill of sale. The seller should also keep their copy and may need it if they are asked to prove they no longer own the vehicle. Some states allow the seller to file a "release of liability" form with the DMV to formally notify the state that they no longer own the car — this is a good idea even if it is not required, as it protects the seller from liability for anything that happens to the car after the sale.
Frequently Asked Questions
Can I use a handwritten bill of sale, or does it have to be printed?
A handwritten bill of sale is legally valid in all states as long as it includes the required information and is signed by both parties. Handwritten forms are actually preferable in some cases because they are harder to forge. Use blue or black ink, write clearly, and keep the original rather than a photocopy.
What if the seller will not sign a bill of sale?
A seller's refusal to sign is a red flag. It may indicate the car has an outstanding loan, has been reported stolen, or has other legal problems. Do not proceed with the purchase until you understand why the seller is unwilling to sign. You can have the car's history checked through services like Carfax or AutoCheck, and you can ask the seller to provide proof that the title is clear before you hand over money.
Do I need to have the bill of sale notarized?
Notarization is not required by law in most states, but it adds an extra layer of protection by having a notary public verify the signatures. If you are buying from someone you do not know well or if the sale price is high, notarization may be worth the small fee. Your bank or local courthouse can direct you to a notary.
What if I lose my copy of the bill of sale after the sale?
If you lose your copy, contact the seller and ask for another signed copy. If the seller will not provide one, you can file a police report for a lost document and use that report as evidence of the sale. Your state's DMV may also have a record of the title transfer, which can serve as proof of ownership.
Should the bill of sale show the actual price I paid, or can I write a lower amount?
The bill of sale should show the actual amount you paid. Writing a false price to reduce taxes or registration fees is fraud and can result in fines or criminal charges. Both the buyer and seller are responsible for reporting the correct sale price to the state.