What a bill of sale is and why you need one

A bill of sale is a written record that you sold a vehicle to someone else, or that someone sold it to you. It documents the date of the sale, the vehicle's details (make, model, year, VIN), the price paid, and the names and signatures of both the buyer and seller. It is not the same as a title—the title proves ownership, and the bill of sale proves the transaction happened.

You need a bill of sale because it protects both of you. For the seller, it shows you no longer own the car and are not responsible for what the buyer does with it afterward—accidents, parking tickets, or unpaid registration fees. For the buyer, it proves they paid for the vehicle and have a record of the agreement in case a dispute arises later. Many states require a bill of sale before the buyer can register the car in their name, and some require it even for private sales between individuals.

A bill of sale is also your protection if something goes wrong. If the buyer stops paying you after taking the car, or if the seller claims you never paid, the signed document is evidence in small claims court. Without it, you have only your word.

Key Takeaways

  • A bill of sale documents that a vehicle was sold, including the date, vehicle details, price, and signatures of both buyer and seller.
  • Your state may require a bill of sale before the buyer can register the vehicle, even for private sales between individuals.
  • Free templates are available from your state's Department of Motor Vehicles website, and many states provide an official form.
  • Both the buyer and seller must sign and date the bill of sale, and each should keep a copy for their records.
  • A bill of sale protects you from liability after the sale and gives you proof of the transaction if a dispute arises.

Where to find a free bill of sale template

Your state's Department of Motor Vehicles (DMV) website usually offers a free bill of sale form or template. Search "[your state] DMV bill of sale" to find the official version. Some states provide a single standard form; others offer different versions depending on whether the sale is between private individuals, from a dealer, or involves a trade-in.

If your state does not have an official form, you can use a generic template from a legal document site. The form does not have to be fancy or printed on special paper—a handwritten bill of sale signed by both parties is legally valid in most states, as long as it includes all the required information.

Before you use any template, check your state's DMV website for specific requirements. Some states require certain language, fields, or disclosures. For example, some states require you to state whether the vehicle has a lien (a loan against it), and others require you to disclose known mechanical problems. Using your state's official form ensures you meet these requirements.

What information to include on the bill of sale

At minimum, a bill of sale should include the date of the sale, the full names and addresses of both the buyer and seller, and the vehicle's year, make, model, color, and Vehicle Identification Number (VIN). The VIN is printed on the vehicle's title and on a sticker inside the driver's door frame. Do not skip this—it is the only way to prove you are selling the right car.

Include the sale price and the method of payment (cash, check, electronic transfer). If the buyer is paying in installments, write down the payment schedule and the total amount due. If the vehicle has an outstanding loan or lien against it, state that clearly. If the seller is aware of mechanical problems or damage, many states require you to disclose them on the bill of sale.

Add a line for the odometer reading at the time of sale. This is required in most states and protects the buyer from odometer fraud. Both the buyer and seller should sign and date the document. Some states require the signatures to be notarized (witnessed and certified by a notary public), though most do not for private sales.

How to fill out and sign the bill of sale

Print or write out the bill of sale clearly so both parties can read it. Fill in all the blanks with accurate information—do not leave fields empty or use abbreviations that might be misunderstood. If you are handwriting it, use black or blue ink and write legibly.

Both the buyer and the seller must sign and date the document in front of each other if possible. Some states allow electronic signatures; others require ink signatures. If you are mailing the bill of sale to the other party, have them sign it and mail it back, or use a service that allows you to sign electronically and keep a record.

Make at least two copies—one for the buyer and one for the seller. If your state requires the bill of sale to be submitted with the title transfer, make an extra copy for the DMV. Keep your copy in a safe place, along with any other vehicle paperwork.

When the buyer needs to submit the bill of sale

In most states, the buyer must submit the bill of sale to the DMV along with the title when they register the vehicle in their name. Some states require it; others treat it as optional but recommended. Check your state's DMV website to see whether it is required for your transaction.

The buyer typically has a set number of days (often 10 to 30 days, depending on the state) to register the vehicle after purchase. If the bill of sale is required, submitting it late can delay registration or result in a fine. The buyer should keep a copy of the bill of sale with their vehicle records, even after registration is complete.

As the seller, you are not responsible for submitting the bill of sale—that is the buyer's job. However, you should keep your copy and, in some states, notify the DMV that you have sold the vehicle so your name is removed from the registration. This step protects you from liability if the buyer gets into an accident or accumulates parking tickets before they register the car.

What to do if the vehicle has a lien or outstanding loan

If you are selling a car that still has a loan against it, the lien must be paid off before the title can be transferred to the buyer. The bill of sale should clearly state that the vehicle is subject to a lien and include the name and contact information of the lender. The buyer needs to know this before they agree to purchase the car.

Typically, the sale proceeds go to the lender first to pay off the loan, and any remaining money goes to the seller. The lender will then release the lien and allow the title to be transferred. This process usually happens at the time of sale, often at a bank or credit union. The bill of sale documents this arrangement.

If you are the buyer, do not hand over payment until the lien is released and the title is clear. If you are the seller, do not sign over the title until the lender confirms the loan is paid in full. The bill of sale protects both of you by documenting the terms of the sale and the lien status.

Protecting yourself after the sale is complete

Once the bill of sale is signed, keep your copy in a safe place—a filing cabinet, safe deposit box, or digital scan stored securely. If you are the seller, this document proves you no longer own the vehicle and are not responsible for anything that happens to it after the sale date.

As the seller, notify your insurance company and your state's DMV that you have sold the vehicle. Some states allow you to submit a notice of sale form, which removes your name from the registration and protects you from liability. This is especially important if the buyer does not register the vehicle right away or gets into an accident before doing so.

If you are the buyer, keep your copy of the bill of sale with your title and registration documents. If there is ever a dispute about the purchase price, condition of the vehicle, or terms of the sale, the bill of sale is your proof of what was agreed to. It is also useful for insurance claims and warranty disputes.

Frequently Asked Questions

Do I need a notary to sign a bill of sale?

Most states do not require a notary for a private bill of sale between individuals. However, some states or lenders may require it, so check your state's DMV website or ask your lender before you sign. If a notary is required, you can find one at a bank, credit union, or notary service—the cost is usually $5 to $15.

What if I lose my copy of the bill of sale after the sale?

Contact the other party and ask for a copy. If you cannot reach them, you can request a copy from your state's DMV if the bill of sale was submitted with the title transfer. Keep digital scans of important documents to prevent loss.

Can I use a bill of sale from another state?

You should use your own state's form or a template that meets your state's requirements. While a generic bill of sale may be legally valid, using your state's official form ensures you include all required information and disclosures. Check your DMV website first.

What if the buyer wants to pay in installments?

You can include a payment schedule in the bill of sale that lists the amount due, the payment dates, and the method of payment. Both parties should sign this agreement. Consider consulting a lawyer if the amount is large, as you may need additional protections if the buyer stops paying.

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

No. Dealerships handle their own paperwork and do not require a separate bill of sale. The dealership will provide you with documentation of the trade-in value and handle the title transfer. A bill of sale is mainly for private sales between individuals.