What a bill of sale is and why you need one

A bill of sale is a written record that you sold a car to someone else, or that someone sold a car to you. It names the buyer, the seller, the vehicle (make, model, year, VIN), the sale price, and the date. Both parties sign it. When you buy or sell a car privately — not through a dealer — a bill of sale protects you by creating proof of the transaction.

The protection works two ways. If you are the buyer, the bill of sale shows you paid for the car and when, which matters if the seller later claims you still owe money or if the title transfer gets delayed. If you are the seller, it shows you transferred ownership on a specific date, which protects you from liability for anything that happens to the car after that point — accidents, parking tickets, unpaid tolls. Without it, you may still be listed as the owner in state records even though you no longer have the car.

A bill of sale is not the same as a title. The title is the state document that proves ownership. The bill of sale is the private record of the sale itself. Many states do not require a bill of sale by law, but having one is standard practice and protects both parties.

Key Takeaways

  • A bill of sale is a written agreement between buyer and seller that documents the vehicle details, sale price, and date, signed by both parties.
  • Most states do not legally require a bill of sale, but having one protects both buyer and seller from future disputes and liability.
  • You can write a bill of sale yourself using a straightforward template or read a free form from your state's DMV website or a legal document site.
  • The bill of sale should include the VIN, vehicle description, sale price, buyer and seller names and addresses, and the date of sale.
  • Keep a copy for your records; the buyer keeps one copy and the seller keeps one copy, even though only the title transfer is filed with the state.

What information to include on a bill of sale

A bill of sale needs enough detail that someone reading it years later could identify the exact car and understand the exact transaction. Start with the vehicle itself: the year, make, model, body style (sedan, truck, SUV), color, and the Vehicle Identification Number (VIN). The VIN is the 17-character code on the dashboard and on the title; it is the most important identifier because it is unique to that one car.

Next, the sale details. Write the sale price in both numbers and words — for example, "$5,500 (five thousand five hundred dollars)" — to prevent later disputes about what was agreed. Include the date of sale. Then add the names, addresses, and signatures of both the buyer and the seller. Some people also add the odometer reading on the date of sale, which can be useful if there is ever a question about the car's history.

You can also note whether any equipment or keys are included, whether the car is sold "as-is" with no warranty, and whether the buyer is responsible for any outstanding loans or liens on the vehicle. If there is a lien (a loan against the car), the seller should disclose it, and the bill of sale should note that the lien will be paid off before or at the time of sale.

Where to find a free bill of sale template

You do not have to hire a lawyer or buy a form. Most state DMV websites offer a free bill of sale template you can read and print. Search "[your state] DMV bill of sale" to find it. If your state does not have an official form, legal document websites like Nolo, LawDepot, and the American Automobile Association (AAA) offer free templates that work in most states.

The template will have blanks for the vehicle information, buyer and seller details, sale price, and date. Fill in the blanks by hand or type them in, print two copies, and both parties sign both copies. One copy goes to the buyer, one to the seller. You do not file the bill of sale with the state — you keep it as a private record. The title transfer is what gets filed with the DMV.

If you want to be extra careful, you can also have the bill of sale notarized, meaning a notary public witnesses the signatures. This is not required in most states, but it adds a layer of proof that both parties actually signed. Some banks or title companies will notarize for free or a small fee.

How to fill out and sign the bill of sale

Print or write out two identical copies of the bill of sale — one for the buyer, one for the seller. Fill in all the blanks with accurate information. Use the VIN from the title or the dashboard, not from memory. Write the sale price clearly. Make sure both the buyer's and seller's names match the names on their driver's licenses, because the title transfer will use those same names.

Both the buyer and the seller must sign and date the bill of sale on both copies. Sign in blue or black ink so the signature is clear and distinct from any photocopies. If either party is uncomfortable signing, that is a sign to pause and clarify the terms before moving forward. The bill of sale is a binding record of what was agreed, so both parties should be certain before signing.

After signing, each party keeps one copy. The buyer should keep their copy with the title and registration documents. The seller should keep their copy in case there is ever a question about when they transferred the car. Neither party files the bill of sale with the state — it stays in your personal records.

When the bill of sale matters most

The bill of sale becomes important if something goes wrong after the sale. If the buyer later claims the car was not as described, the bill of sale shows what was agreed and when. If the seller is sued for something the car did after the sale — an accident, a parking violation — the bill of sale proves the seller no longer owned the car on that date. If there is a dispute over the sale price or whether the sale actually happened, the signed bill of sale is your evidence.

The bill of sale also matters during the title transfer process. When the buyer goes to the DMV to register the car in their name, they may need to show the bill of sale as proof of purchase. Some states require it; others do not. Having it on hand speeds up the process and prevents delays if the DMV asks for it.

If the car has an outstanding loan or lien, the bill of sale should note that the lien will be paid off. The seller is responsible for paying off the loan before transferring the title, and the bill of sale documents that agreement. Without it, the buyer could end up with a car they cannot register because the lender still has a claim on it.

Differences between states and special situations

Most states do not legally require a bill of sale, but a few do. Check your state's DMV website to see whether a bill of sale is mandatory where you live. Even if it is not required, having one is a best practice and costs nothing.

Some states have specific language or fields they prefer on a bill of sale, so using your state's official template is the safest choice. If you are buying or selling a car with a lien on it, the bill of sale should clearly state that the lien will be paid off before the title is transferred. If the car is being sold "as-is" with no warranty, write that on the bill of sale so there is no misunderstanding later.

If you are buying a car from a private seller and the seller does not want to sign a bill of sale, that is a red flag. A legitimate seller has no reason to refuse. If you are selling a car and the buyer refuses to sign, walk away — it suggests they may be planning to dispute the sale later or use the car in a way you would not approve of.

Frequently Asked Questions

Do I have to notarize the bill of sale?

No, notarization is not required in most states. A bill of sale signed by both parties is legally valid without a notary. However, notarizing it adds extra proof that both parties actually signed it, which can be useful if there is ever a dispute. Some title companies or banks will notarize for free or a small fee.

What if I lost my copy of the bill of sale after I sold the car?

If you are the seller and you no longer have your copy, ask the buyer for a copy. If the buyer will not provide one, you can contact your state's DMV to confirm that the title was transferred into the buyer's name on a certain date — that record serves as proof you no longer owned the car. Keep the DMV confirmation letter in your records.

Can I write a bill of sale by hand instead of printing a template?

Yes. A handwritten bill of sale is just as legal as a printed one, as long as it includes all the required information: vehicle details, VIN, sale price, buyer and seller names and addresses, date, and both signatures. Write clearly so there is no confusion later about what was agreed.

What if the buyer and I disagree on the sale price after we sign?

The signed bill of sale is the binding record of what was agreed. If you both signed a bill of sale stating the price was $5,000, that is the price. This is why it is important to make sure the price is correct before either party signs. If there is a dispute before signing, do not sign until you both agree.

Do I need a bill of sale if I am trading in my car at a dealership?

No. When you trade in a car at a dealership, the dealer handles the title transfer and paperwork. You do not need a separate bill of sale. A bill of sale is for private sales between individuals, not dealer transactions.