A purchase agreement is the written contract between you and the seller that spells out the price, condition, and terms of the sale
A purchase agreement (also called a bill of sale or purchase contract) is the document that makes the car sale official and legally binding. It records what you are buying, how much you are paying, and what condition the car is in at the moment of sale. Without it, you have no proof of the transaction if a dispute arises later — and you cannot register the car in your name at the DMV without one.
The agreement protects both you and the seller. For you, it documents what the seller promised about the car's condition and creates a record of the price and payment terms. For the seller, it shows they transferred ownership and received payment. Most states require a bill of sale before you can title the vehicle in your name, so this is not optional paperwork — it is a legal requirement to complete the purchase.
Key Takeaways
- A purchase agreement must include the vehicle identification number (VIN), the sale price, the date of sale, and the signatures of both buyer and seller to be legally valid.
- You should note the car's condition, mileage, and any known defects in writing on the agreement to protect yourself from disputes after the sale.
- The agreement should state whether the car is sold "as-is" or with any warranties, and whether the seller is responsible for repairs discovered after the sale.
- Keep a signed copy for yourself and give one to the seller; you will need it when you register the car and may need it if a problem arises later.
What information must be on the agreement
The agreement needs to identify the car clearly so there is no confusion about which vehicle changed hands. Include the vehicle identification number (VIN), which is a 17-character code found on the driver's side dashboard and on the title document. Also write down the year, make, model, color, and license plate number. If any of these details are wrong, the DMV may reject your registration.
The agreement must show the sale price and how you are paying — cash, check, financing, or a combination. If you are financing part of the purchase, note the amount financed and any terms you agreed to. Write the date of the sale and the names and addresses of both the buyer (you) and the seller. Both parties must sign and date the document for it to be legally binding. Some states require the signatures to be notarized; check your state's DMV website to confirm.
Include the car's current mileage and its condition at the time of sale. Note whether the odometer is working correctly. If the seller disclosed any known defects — a dent, a transmission issue, a check engine light — write them down. This protects you later if the seller claims they never told you about a problem.
Deciding whether the car is sold "as-is" or with a warranty
Most private car sales are "as-is," meaning you are buying the car in its current condition and the seller makes no promises about its future performance. If something breaks the day after you buy it, that is your problem. Writing "as-is" on the agreement makes this clear and protects the seller from liability.
Some sellers offer a limited warranty — for example, "the transmission is may provide for 30 days" or "the seller warrants that the engine runs." If the seller has made any such promise, write it on the agreement with the exact terms: what is covered, for how long, and what you have to do if something goes wrong. If there is no warranty, write "sold as-is, no warranty" so there is no misunderstanding later.
If you are buying from a dealer rather than a private seller, the agreement may include a manufacturer's warranty or a dealer warranty. Read what it covers and for how long. Dealer warranties vary widely, so do not assume you are covered for everything.
What to do about title and ownership transfer
The agreement should state that the seller owns the car free and clear, or disclose any liens (loans) against it. A lien means a bank or lender has a claim on the car until the loan is paid off. If there is a lien, the seller must pay it off before transferring the title to you, or you must agree in writing to take over the loan. Never take possession of a car with an outstanding lien unless you have a written agreement about who will pay it off and when.
The agreement should also state when the title will be transferred to you. Ideally, this happens at the time of sale, but some sellers need a few days to get the title from their lender or to sign the paperwork. Write down the exact date by which the seller will deliver the signed title to you. If the seller does not deliver it by that date, you have a written record of the broken promise.
Where to get a purchase agreement form
You do not need to hire a lawyer to create a purchase agreement. Your state's DMV website usually has a free bill of sale form you can read and print. Search "[your state] DMV bill of sale" to find it. Some states have a specific form they require; others accept any written agreement as long as it includes the required information.
If your state does not provide a form, you can use a generic bill of sale template from a legal document website or write one yourself as long as it includes the VIN, sale price, date, and both signatures. Many car buying websites also offer free templates. The form does not have to be fancy — a handwritten agreement signed by both parties is legally valid in most states.
If you are buying from a dealer, they will provide the purchase agreement. Read it carefully before signing. Dealer agreements often include additional terms about trade-ins, financing, warranties, and return policies. Do not sign anything you do not understand; ask the dealer to explain any clause that is unclear.
Steps to complete the agreement safely
Fill out the agreement completely and legibly before either party signs. Do not leave blanks or use abbreviations that could be misread. If you need to make a change, cross it out neatly, write the correction above it, and have both parties initial the change. Do not use white-out or tape, which can make the document look altered.
Review the agreement with the seller before signing to make sure you both agree on every detail. This is your chance to catch errors or misunderstandings. Once you both sign, the agreement is binding, so take time to get it right the first time.
Make two copies — one for you and one for the seller. Keep your copy in a safe place. You will need it when you register the car at the DMV, and you may need it if a dispute arises. Some states require you to submit the bill of sale with your registration paperwork; others just ask you to keep it on file. Check your state's DMV website to see what is required.
Common mistakes to avoid
Do not leave the price blank or write it in pencil. Write the full sale price in words and numbers so there is no ambiguity. If you negotiated a lower price because of a defect, write that down — for example, "Price reduced $500 due to dent in driver's door." This protects you if the seller later claims you owe more money.
Do not skip the mileage or condition section. Even if the car looks fine, write down the current mileage and note "no known defects" or list any you see. This creates a record of what you knew at the time of purchase. If a major problem shows up a week later, you have proof you did not know about it when you bought the car.
Do not sign a blank agreement or one with blank spaces you plan to fill in later. Once you sign, the seller could fill in different terms. Always complete the agreement fully before signing.
Frequently Asked Questions
Do I need a notary to sign a purchase agreement?
It depends on your state. Some states require a notarized bill of sale; others do not. Check your state's DMV website or call your local DMV to find out. If notarization is required, you can have the document notarized at a bank, UPS store, or notary public's office for a small fee, usually $5 to $15.
What if the seller will not sign the agreement?
Do not buy the car. A seller who refuses to sign a purchase agreement is a red flag. They may be hiding something about the car's history, or they may not actually own it. A legitimate seller will sign an agreement without hesitation.
Can I use a text message or email as a purchase agreement?
A written record of the sale is better than nothing, but a formal signed document is stronger evidence in court if a dispute arises. Use an actual purchase agreement form if possible. If you do exchange messages, save them and print them out as backup.
What happens if the car breaks down after I sign the agreement?
If the agreement says "as-is," you are responsible for repairs. If the agreement includes a warranty for that specific part, the seller may be responsible. This is why writing down what is and is not covered is important — it determines who pays if something goes wrong.
Do I need the purchase agreement to get car insurance?
Most insurance companies will insure a car based on the VIN and your proof of purchase, which can be the bill of sale. Some may ask for the title as well. Call your insurance company before you buy to ask what documents they need.