What goes in a bill of sale and why you need one

A bill of sale is a written record that you sold a vehicle to someone else on a specific date for a specific price. It protects both the seller and the buyer by documenting the transaction in writing. When you sign it, you are saying you owned the vehicle free and clear (or that you disclosed any liens), and the buyer is saying they received it in the condition you described.

The bill of sale becomes the buyer's proof of purchase when they register the vehicle with the state. It also protects you as the seller by creating a dated record that you no longer own the car — this matters if the buyer gets into an accident or racks up parking tickets after the sale. Without a bill of sale, a dispute over who owned the vehicle on a given date becomes your word against theirs.

Most states do not require a bill of sale by law, but your state's DMV may ask for one when the buyer registers the vehicle. Even if your state does not require it, writing one takes 10 minutes and solves problems before they start.

Key Takeaways

  • A bill of sale must include the vehicle identification number (VIN), the sale price, the date of sale, and the signatures of both the seller and buyer.
  • You can use a template from your state's DMV website, a generic template, or write one yourself — there is no single required format.
  • Both the seller and buyer should keep a signed copy; some states require the buyer to bring it to the DMV when registering the vehicle.
  • If the vehicle has a lien (the bank or lender still owns it), you must disclose this on the bill of sale, and the lien must be paid off before the title transfers.
  • The bill of sale should describe the vehicle's condition at the time of sale and note whether any warranties or guarantees are included.

Information you must include on the bill of sale

Start with the basics: the date of the sale, the seller's full name and address, and the buyer's full name and address. Use the legal names that appear on driver's licenses, not nicknames.

Next, describe the vehicle itself. Include the year, make, model, and color. Most importantly, include the vehicle identification number (VIN) — this is the 17-character code stamped on the dashboard and on the title. You can find it on the title document you already have, or on the vehicle itself (look at the lower left corner of the windshield from outside). The VIN is what ties the bill of sale to the actual car, so getting it wrong defeats the purpose.

Write the sale price in both numbers and words — for example, "$5,500 (five thousand five hundred dollars)". This prevents disputes over whether the price was $500 or $5,000. If the buyer is paying in cash, note that. If they are paying by check or financing through a lender, you can note that too, though it is not required.

Add a line stating the condition of the vehicle at the time of sale. You can write "as-is" (meaning the buyer accepts it with all faults), or you can list specific things: "runs well, new tires, dent on driver's side door." This protects you from a buyer claiming later that something was broken when they took possession.

Disclosing liens and existing loans

If you still owe money on the vehicle — meaning a bank, credit union, or lender holds the title as collateral — you must disclose this on the bill of sale. Write something like: "Vehicle is subject to a lien held by [Lender Name]. Lien will be paid off at closing" or "Lien will be paid off by [date]."

The buyer needs to know this because they cannot legally own the vehicle until the lien is removed. In most cases, you pay off the loan at the moment of sale using the money from the buyer. The lender then releases the title to you, and you sign it over to the buyer. This happens at a bank or credit union, and it takes an hour or so.

If you do not disclose a lien and the buyer finds out later, they may refuse to complete the purchase or demand the price be lowered. Worse, if you take their money and do not pay off the lender, the lender can repossess the vehicle from the buyer, and the buyer can sue you.

Choosing a format and template

You have three options: use a template from your state's DMV website, use a generic bill of sale template from a legal website, or write one yourself from scratch.

Start by checking your state's DMV website. Many states provide an official bill of sale form or a sample you can read and print. Search "[your state] DMV bill of sale" or "[your state] bill of sale form." If your state provides one, use it — it will include everything the DMV expects to see when the buyer registers the vehicle.

If your state does not provide a template, search for a generic bill of sale template online. Sites like LegalZoom, Rocket Lawyer, and even some state bar associations offer free templates. read one, open it in a word processor, and fill in the blanks with your information.

If you write one yourself, include the date, both names and addresses, the VIN, the year/make/model/color, the sale price in numbers and words, the condition of the vehicle, any liens, and a line for both signatures. You do not need fancy language — plain English works fine. The point is to have a written record, not to impress anyone with legal terminology.

Signing and storing the bill of sale

Print the bill of sale on regular paper. Both you (the seller) and the buyer should sign and date it in front of each other. Some states require the signatures to be notarized; check your state's DMV website to see if this applies to you. If notarization is required, you can have it done at a bank, credit union, or notary public's office for a small fee (usually $5 to $15).

Make at least two copies — one for you and one for the buyer. If you are financing the vehicle through a lender, the lender may also want a copy. Keep your copy in a safe place (a file folder, a safe, or a digital scan) for at least a few years. If a question ever comes up about when you sold the vehicle or to whom, you will have proof.

The buyer should bring their copy to the DMV when they register the vehicle. Some states require it; others just ask for it. Either way, having it makes the registration process smoother.

What to do if the sale falls through

If you and the buyer agree not to go through with the sale after signing the bill of sale, write a brief note on both copies stating that the sale is cancelled and the date it was cancelled. Both of you should sign and date this cancellation note. Keep it with the original bill of sale. This protects you both by creating a clear record that the transaction never actually happened.

Do not just tear up the bill of sale and pretend it never existed. If the buyer later claims they own the vehicle or if there is a dispute, you will have no proof of what actually happened. A cancellation note is quick and solves this problem.

Common mistakes to avoid

The most common mistake is leaving the VIN blank or writing it down wrong. Take 30 seconds to copy it exactly from the title or the windshield. A wrong VIN makes the bill of sale useless.

The second mistake is not keeping a copy for yourself. You are the seller — you need proof that you sold this vehicle on this date to this person. Without it, you have no defense if the buyer later claims you still own it or if they damage it and someone tries to hold you responsible.

The third mistake is not disclosing a lien. This creates legal problems for the buyer and exposes you to a lawsuit. If you owe money on the vehicle, say so on the bill of sale.

The fourth mistake is writing the price in numbers only, or in words only. Write it both ways to prevent disputes. "$5,500 (five thousand five hundred dollars)" takes five seconds and eliminates confusion.

Frequently Asked Questions

Do I need a bill of sale if I am selling a vehicle to a family member?

Yes. Even though you trust them, a bill of sale protects both of you. It creates a clear record of when the vehicle changed hands, which matters for insurance, registration, and taxes. If you sell it to a family member for less than market value or for free, note that on the bill of sale — write "sale price: $1" or "gift" if no money is exchanged.

What if the buyer wants to pay me later instead of at the time of sale?

You can note this on the bill of sale, but understand that you remain the legal owner until you are paid in full. Write something like "Payment due by [date]" or "Buyer will pay $X by [date]." Do not sign over the title until you have the money. If the buyer does not pay, you still own the vehicle and can sell it to someone else.

Can I use a bill of sale instead of transferring the title?

No. The bill of sale documents the sale, but the title is the legal proof of ownership. You must sign the title over to the buyer (usually on the back) and submit it to the DMV so the title is transferred into their name. The bill of sale and the title transfer are two separate steps.

What if I lost the title and do not have it to sign over?

Contact your state's DMV and ask how to get a replacement title. You will need to provide proof of ownership (registration, bill of sale, insurance documents) and pay a fee. The process takes a few weeks. Do this before you try to sell the vehicle — you cannot legally transfer ownership without a title.

Should I mention the mileage on the bill of sale?

Yes, if you want to. Write the odometer reading at the time of sale. This is not required, but it creates a record of the vehicle's condition and can be useful if there is ever a dispute about how much the vehicle was driven.