How to Write a Bill of Sale for a Car

A bill of sale for a car is a legal document that records the transfer of vehicle ownership from a seller to a buyer. It serves as written proof that the transaction occurred, documenting critical details such as the purchase price, vehicle identification information, and the identities of both parties. While a vehicle title is the primary document establishing ownership, a bill of sale provides essential supplementary evidence of the sale and is required by many state DMVs as part of the title transfer and registration process. Whether you are selling a used car privately, buying from an individual, or transferring a vehicle between family members, a properly drafted bill of sale protects both parties and simplifies the administrative process.

Why You Need a Vehicle Bill of Sale

A bill of sale serves multiple important functions in a vehicle transaction. Understanding these functions helps explain why this document is essential even in states that do not legally require one.

Proof of Purchase and Ownership Transfer

The bill of sale is the primary evidence that a sale occurred and that ownership transferred from the seller to the buyer on a specific date and for a specific price. Without this document, disputes can arise about whether a sale actually took place, when it occurred, and what terms were agreed upon. In cases where the vehicle title is delayed, lost, or in transit, the bill of sale provides interim proof that the buyer has a legitimate claim to the vehicle.

Tax Documentation

Most states impose sales tax on private vehicle sales, calculated based on the purchase price stated in the bill of sale. The DMV or taxing authority relies on the bill of sale to determine the tax owed. Understating the purchase price on a bill of sale to reduce tax liability constitutes tax fraud and can result in penalties, fines, and criminal charges in some states. The bill of sale should always reflect the actual amount paid for the vehicle.

Title Transfer Requirement

Many state DMVs require a bill of sale as part of the title transfer application. States including California, New York, Texas, Florida, Pennsylvania, and Ohio require or strongly recommend a bill of sale when registering a vehicle purchased through a private sale. Some states provide official bill of sale forms that must be used, while others accept any written document that contains the required information. Even in states where a bill of sale is not technically required, submitting one with the title application speeds up processing and reduces the likelihood of issues.

Liability Protection for the Seller

Once a vehicle is sold, the seller wants clear documentation that ownership has transferred. If the buyer is involved in an accident, receives traffic violations, or incurs parking tickets before completing the title transfer, the seller could be held responsible as the registered owner. A bill of sale with a specific date of sale helps establish when liability shifted from the seller to the buyer. Many states also recommend that sellers submit a release of liability or notice of transfer form with the DMV to formally disassociate themselves from the vehicle.

Required Information in a Vehicle Bill of Sale

A comprehensive vehicle bill of sale must contain specific information to be legally effective. While requirements vary by state, the following elements are standard across most jurisdictions.

Vehicle Identification Number (VIN)

The VIN is a unique 17-character alphanumeric code assigned to every vehicle manufactured since 1981. It is the most important identifier on a bill of sale because it uniquely identifies the specific vehicle being sold. The VIN can be found on the vehicle's dashboard visible through the windshield on the driver's side, on the driver's side door jamb, on the vehicle's title and registration documents, and on insurance cards and policies.

Always verify the VIN by physically inspecting the vehicle and comparing the VIN on the dashboard and door jamb to the VIN on the title. VIN discrepancies can indicate title fraud, a salvaged vehicle with a swapped VIN, or a stolen vehicle. The National Highway Traffic Safety Administration (NHTSA) provides a free VIN decoder at its website that can verify the vehicle's specifications based on the VIN.

Year, Make, Model, and Body Style

Include the vehicle's model year, manufacturer (make), model name, and body style (sedan, SUV, truck, coupe, convertible, van, etc.). Adding the trim level and engine type provides additional specificity that can help distinguish between different configurations of the same model.

Mileage (Odometer Reading)

The current odometer reading at the time of sale must be recorded on the bill of sale. This is not merely a best practice but a federal legal requirement under the Federal Odometer Act, codified at 49 U.S.C. Sections 32701 through 32711. The Act requires the seller to provide the buyer with a written disclosure of the vehicle's mileage at the time of transfer. The disclosure must state whether the odometer reading is actual, reflects mileage in excess of the odometer's mechanical limits, or is not the actual mileage due to odometer malfunction or tampering.

Odometer fraud, which involves rolling back or altering a vehicle's odometer to show fewer miles, is a federal crime. NHTSA estimates that odometer fraud costs American car buyers over $1 billion annually. The bill of sale's odometer disclosure helps protect the buyer by creating a written record of the mileage representation at the time of sale.

Identification of the Parties

Include the full legal names, addresses, and contact information of both the seller and the buyer. If either party is a business entity, include the business name, state of registration, and the name and title of the authorized representative signing the document.

Purchase Price

State the total purchase price of the vehicle in both numerals and written words to prevent alteration. If the vehicle is being gifted, state the consideration as zero dollars or as a gift. Include any trade-in value, if applicable, and specify whether the price includes any additional items such as accessories, aftermarket modifications, or extended warranties.

Date of Sale

The date of sale establishes when ownership transferred and is critical for determining liability, registration deadlines, and tax obligations. Most states require the buyer to register the vehicle and pay sales tax within a specified period after the date of sale, typically 10 to 30 days.

Vehicle Condition

Describe the condition of the vehicle and disclose any known defects, damage, or mechanical issues. This section is particularly important for establishing whether the sale is "as-is" or whether the seller is providing any warranties.

As-Is vs. Warranty Sales

Most private vehicle sales are conducted on an "as-is" basis, meaning the buyer accepts the vehicle in its current condition and the seller makes no guarantees about its fitness, performance, or future reliability. The bill of sale should include a clear as-is disclaimer stating that the vehicle is sold in its present condition, that the seller disclaims all warranties express or implied, including the implied warranty of merchantability and fitness for a particular purpose, and that the buyer has inspected the vehicle and accepts it in its current state.

If the seller is providing any warranty, the warranty terms must be clearly stated in the bill of sale, including the duration, coverage, limitations, and the process for making warranty claims. Note that the Federal Trade Commission's Used Car Rule requires dealers to display a Buyers Guide on every used vehicle offered for sale, but this rule does not apply to private sellers.

Lemon Law Considerations

Every state has a lemon law that provides remedies for buyers who purchase vehicles with substantial defects that the manufacturer or dealer cannot repair after a reasonable number of attempts. However, most state lemon laws apply only to new vehicles purchased from licensed dealers and do not cover private sales of used vehicles.

Some states have used car lemon laws or implied warranty protections that may apply to certain private sales. For example, Massachusetts requires an implied warranty of merchantability on private sales of vehicles priced above a certain threshold. Buyers should research their state's specific lemon law protections before relying on them in a private transaction.

State DMV Requirements

Each state has its own requirements for vehicle title transfers and bills of sale. Understanding your state's specific requirements is essential to completing the transaction properly.

Some states, including California and New York, provide official bill of sale forms (California's REG 135 and New York's MV-912) that are recommended or required for private sales. Other states, including Texas and Florida, accept any written document that contains the required information. A few states, such as Maryland and Virginia, do not require a separate bill of sale when the title is properly assigned, but still recommend one for the buyer's protection.

Research your state's DMV website for specific requirements regarding bill of sale content, title transfer procedures, emissions testing, safety inspections, and registration deadlines.

Odometer Disclosure Requirements

The Federal Odometer Act requires a written odometer disclosure statement for all motor vehicle transfers. In most states, the odometer disclosure is made on the vehicle title itself in a designated section. However, when the title does not have an odometer disclosure section or when additional documentation is needed, a separate odometer disclosure statement must be completed.

The odometer disclosure must include the vehicle's VIN, the odometer reading at the time of transfer, the date of the reading, the seller's name and address, the buyer's name and address, and a certification by the seller that the odometer reading is accurate or, if not, an explanation of any discrepancy. Vehicles that are 20 model years old or older are generally exempt from federal odometer disclosure requirements, though some states have stricter rules.

Sales Tax Obligations

Most states impose sales tax on private vehicle sales. The tax rate and calculation method vary by state and, in some cases, by county or municipality. The buyer is typically responsible for paying sales tax at the time of registration.

Some states base the sales tax on the actual purchase price stated in the bill of sale, while others use the vehicle's fair market value or book value if it exceeds the stated price, to prevent tax avoidance through understated prices. Common exemptions from vehicle sales tax include transfers between immediate family members (spouse, parent, child), transfers as part of a divorce settlement, vehicles received as gifts, and transfers between a business and its owner.

Notarization Requirements

Some states require the bill of sale to be notarized to be legally effective. Notarization involves having both parties sign the document in the presence of a notary public, who verifies the identities of the signers and affixes a notary seal. States that require or strongly recommend notarization of vehicle bills of sale include Louisiana, Maryland, Montana, Nebraska, New Hampshire, and West Virginia, among others.

Even in states where notarization is not required, having the bill of sale notarized adds an extra layer of authentication that can be valuable if the document is later disputed.

Protecting Yourself as the Buyer

Buyers in private vehicle transactions face several risks that a well-drafted bill of sale can help mitigate.

Verify the VIN on the vehicle matches the VIN on the title and run a vehicle history report through services like Carfax or AutoCheck to check for accidents, title brands (salvage, flood, rebuilt), odometer discrepancies, and open recalls
Confirm that the seller is the titled owner of the vehicle by comparing the name on the title to the seller's government-issued identification
Check for outstanding liens on the vehicle through the state DMV or a lien search service, as a lienholder's security interest survives the sale and can result in repossession even from an innocent buyer
Have the vehicle inspected by an independent mechanic before completing the purchase
Obtain a signed bill of sale that includes the as-is disclaimer, odometer disclosure, and all required vehicle information
Complete the title transfer and registration promptly after the sale to avoid late fees and to establish yourself as the registered owner

Protecting Yourself as the Seller

Sellers also face risks in private vehicle transactions that proper documentation can address.

Complete the assignment section on the back of the vehicle title accurately, including the odometer reading, date, and buyer's information
Provide the buyer with a signed bill of sale that includes the as-is disclaimer and a clear statement that you make no warranties about the vehicle's condition
Submit a release of liability or notice of transfer form to your state's DMV to formally notify the state that you are no longer the owner of the vehicle
Remove your license plates from the vehicle before releasing it to the buyer, as the plates typically remain with the seller in most states
Cancel your insurance coverage on the vehicle after the sale is complete, but not before, to avoid a gap in coverage
Retain a copy of the signed bill of sale, the title assignment, and any other transaction documents for your records

Using an online document generator like Forms Legal makes it easy to create a comprehensive vehicle bill of sale that includes all required information, complies with your state's DMV requirements, and protects both the buyer and seller throughout the transaction.