After a long tense day you may want to drop a few beers with a friend. The last thing you want is a store clerk asking for a “Bill of Sale,” especially if it’s the weekend, after 10 o’clock at night and you spent all afternoon getting hammered. So how can you avoid those kinds of uncomfortable situations? Keep reading to learn how to write bill of sale.
A bill of sale is a written document outlining the details of a property transaction. It must contain certain information for legal purposes, such as the names of all parties involved, the date of sale, the seller’s address, the title being transferred, and sometimes other details relevant to the sale. The form may also require that an itemized listing must be included in the bill. A bill of sale may list personal effects left with the seller or list items included in the transaction. There are several types of bills of sale used by sellers who do not intend to collect payment from purchasers within 30 days.
Table of Contents
Before Starting
Before starting, the seller should research the rules in his or her state that pertain to bills of sale. This can be done at the Department of Motor Vehicle (DMV) website. Requirements may vary greatly. Both the buyer and seller can fill out the form as proof of purchase and of payment.
Once the requirements are known, the first step the seller must take is to gather the important documents, including a proof of purchase, up-to-date registration certificate, the VIN, mileage and make, model and year. The VIN is usually located on the doorjamb or near the steering wheel or under the hood. If it is not in any of these places, it can be found in the car manual.
The buyer and seller must agree on a price for the car and how the payment will be made. The form can be used by both the buyer and seller as evidence for tax purposes of the price paid. If there are any stipulations such as a warranty or rules for returning the car, they should be clearly stated. For example, the seller may give the buyer five or 10 days in which to decide not to buy the car.
How Does a Bill of Sale Work?
You can think of a bill of sale as being similar to a receipt. It’s a legal document that gives protection to both parties by proving the sale was completed and that property and payment changed hands.
For the seller, a bill of sale is proof that the item being transferred was accepted by the buyer in the condition described.
For example, if someone is selling their used car, they may wish to sell it in “as-is” condition. This means they aren’t extending a warranty that everything on the car works perfectly since the vehicle’s used condition could mean there is an unknown underlying problem with a component of the car.
By contrast, if they sell it with a warranty, the bill of sale should spell out what they’re guaranteeing.
For the buyer, the bill of sale is a record of the transaction. This gives them proof of ownership as well as a record of their payment. Depending on which state they live in, they might also need the bill of sale to complete the transfer of ownership. For example, some states require motorists to produce a bill of sale before they can register a vehicle in their name.
Sellers can draft a bill of sale on their own, but it’s often helpful to use a template. While there are no universal formats or rules for what a bill of sale should look like, the document should include the names of the seller and buyer, a description of the item being sold, and the date of the sale.
Do I Need a Bill of Sale?
Each state has its own rules for bills of sale and when they’re required. If you’re selling a vehicle, you should check your state’s laws as most states require a bill of sale.
If you’re selling something of minimal value, such as items at a garage sale, you probably don’t need to bother with a bill of sale. However, you might want to draft one if you’re selling something like a TV or valuable antique.
In short, it’s a good idea to have a bill of sale any time you’re selling a vehicle or something of significant value. For items of lesser value, you probably don’t need one.
How to Write Bill of Sale
Method 1: Writing Your Own Bill of Sale
- Track down your state’s laws and regulations regarding bills of sale. After you buy a vehicle, you will need to fill out a bill of sale and submit it to the DMV, as part of the vehicle registration process, in order to prove you own the vehicle. If you are choosing to draft your own bill of sale, you will need to make sure it complies with your state’s laws and regulations. States regulate these documents because they are used for official purposes (i.e., to register your vehicle).
- To find out if your state regulates bills of sale, conduct a general internet search for “[your state’s] bill of sale regulations”. Look for government websites and links to statutes and regulatory guidance documents.
- If you do not have permanent access to the internet, you can visit your local law library and ask for help. Law librarians are well-trained to help you find books and other materials on specific legal topics. When you get to the library, ask a librarian if they can help you find laws relating to vehicle registration and certificates of vehicle title. Let them know you are looking for information on bills of sale.
- Analyze the legal requirements set out in your state’s laws and regulations. Once you find the applicable laws, look through them to determine what will have to be included in your bill of sale. This step is important and, if you miss a requirement, your bill of sale could be rejected by the DMV. While each state will have its own requirements, bills of sale will generally have to have at least the following information:
- The date of the sale
- A description of the vehicle (e.g., make, model, VIN, and manufacture year)
- Your name and address (as the buyer)
- The seller’s signature and address.
- Draft an introduction. After compiling a list of all the things that need to be included in a bill of sale, you can start drafting. If at all possible, use a computer. Start by giving your document a title (e.g., “Bill of Sale”). Directly beneath the title, write an introduction that gives context to the document and presents the transaction that took place.
- For example, your introduction might state, “Seller is selling, transferring, and delivering the below vehicle to Buyer.”
- Identify the parties. Within the introduction, or directly after, you need to define who the buyer is and who the seller is. These are the parties to the bill of sale so they need to be described in as much detail as possible. While every state will have different requirements, you should always include:
- The seller’s full name, address, and phone number.
- The buyer’s (your) full name, driver license number, address, and phone number.
- Detail the date of the sale and the purchase price of the vehicle. The next sentence of your bill of sale should describe the sale that has taken place. You need to include at least the date the vehicle was purchased and the price you paid to purchase it.
- If the vehicle was gifted to you, you need to state this. In addition, you should indicate what the parties perceive the value of the gift to be (i.e., how much you think the car is worth).
- Describe the vehicle. In a new paragraph, the car needs to be described in enough detail that the DMV can accurately link the particular bill of sale to the vehicle you are trying to register in your name. If the vehicle description is too vague, the DMV will not be able to process your bill of sale for registration purposes. While each state will require different information, you should always try to include the vehicle’s:
- Make
- Model
- Vehicle Identification Number (VIN)
- Model year
- Year of manufacture
- Type of body (e.g., pickup, sedan, SUV)
- Number of cylinders
- Include an odometer reading. Federal and state laws require the seller to disclose an accurate odometer reading to you when they transfer ownership of the vehicle. Because the transfer document is usually a bill of sale, this is where the odometer disclosure usually takes place. In addition to leaving space for the seller to write in the odometer reading, you should also include a certification for the seller to sign or initial, which will state that the odometer reading is accurate.
- For example, you might draft a provision that states, “Seller certifies that the odometer reading is [put mileage here], and that this reading reflects the actual mileage. Providing a false statement may result in Seller being fined and/or imprisoned.”
- Draft any other information you want to include in the document. Depending on the complexity of your transaction, you may choose to include other information in your bill of sale. Commonly, sellers and buyers will agree to certain warranties, which are promises and assurances about the history of the vehicle and its condition.
- In addition, some bills of sale are drafted and provided to a lender as security for a loan. If you are in this scenario, your bill of sale will need to include language making it clear that it will not become effective unless you default on your loan. For example, this type of provision might be necessary if you ask a bank for a loan and the bank requires you to use your car as collateral on that loan.
- Leave space for signatures. At the bottom of the bill of sale, make sure you leave lines where both you and the seller can sign and date the agreement. While most states only require the seller to actually sign the bill of sale, it is always good practice to have the buyer sign as well.
- Get the bill of sale notarized, if required. If your state requires you to get bills of sale notarized, you will need to hold off on signing the agreement until you are in front of a notary. Notaries can be found at most banks, law offices, and even a lot of nonprofit organizations. Once in front of a notary, you and the seller will sign the bill of sale and the notary will acknowledge the signatures.
Method 2: Using Official Bill of Sale Forms
- Obtain a bill of sale form. In most circumstances, you will be able to fill out a simple bill of sale form instead of drafting one from scratch. State DMVs and transportation departments will usually make forms available that include all of the required information. Talk with the vehicle’s seller and determine who will obtain the bill of sale form. If you need to get the form, you can do so in the following ways:
- First you can navigate to your state’s DMV website and download the form from there. Generally, every state will have a place online where you can find forms. Look for the vehicle bill of sale form.
- If you do not have consistent access to the internet, you can call your local DMV office and ask them to send the bill of sale form to you.
- If you are near your DMV, you can visit the office in person and pick up a bill of sale form as well.
- Fill out the required information. Once you get a copy of your applicable bill of sale form, you will need to fill it out with the seller of the vehicle. Work through the form and fill out everything accurately and completely. Do not leave anything blank unless the form says it is acceptable. While each state form will differ in substance and layout, they will all usually ask for at least the following information:
- The vehicle’s description
- The names of the buyer and seller
- The date the transaction took place
- How much the vehicle was sold for
- Whether the vehicle transfer was a gift
- The seller’s address and contact information
- The buyer’s address
- The seller’s signature
- Add an addendum if you need to include additional information. If your state has a form, it may not include all of the information you want to include. If this happens, you can usually attach a piece of paper, known as an addendum, to the bill of sale form. Some states may even have certain addendum forms for particular situations. For example, in Vermont, if the vehicle you are buying is nine years old or newer, you and the seller must attach an odometer disclosure statement. This statement asks the seller to certify the vehicle’s mileage and it must be signed by you and the seller.
- Have each party sign the bill of sale. After you fill out the bill of sale and all required or discretionary addendums, you and the seller need to sign in the necessary places. Most states only require the seller to sign the bill of sale, but both parties might do it anyway. Additionally, you and/or the seller may have to sign one or more addendums. Make sure you read the form directions carefully so every party signs the in the correct places.
- Give the original bill of sale to the buyer. The bill of sale is not only a document that evidences the sale of a vehicle, it is also an official document that must be submitted to the state. Therefore, you (the buyer) will need to obtain the original bill of sale once it has been filled out. This original document will need to be filed with the DMV when you register the vehicle in your name.
- Keep a copy for your records. Before you file the bill of sale, make copies for the seller and yourself. This document is your main piece of evidence proving a transfer took place. You will need it in case there is a dispute between you and the other party.
Bill of Sale for Vehicle Template
Note: It’s important to realize that the bill of sale is separate and distinct from the transfer of title. Most states do not recognize that a car has actually changed owners until the transfer of title is filed with the Department of Motor Vehicles or a similar state agency. If the title is not transferred, then the vehicle’s seller may still be liable even if they haven’t owned the car in months. Just as importantly, the transfer of title is the only document that actually proves vehicle ownership. Clearly, this is something that the buyer will want to deal with immediately.
BILL OF SALE
VEHICLE INFORMATION
Make:_____________ Model:______________ Year:_____________
VIN:________________________ Odometer reading: _______________ Color: _________
I, the undersigned seller, ____________________(name), sell to the undersigned buyer, ________________(name) the above-identified vehicle for the total sum of $ _________ (______________dollars and no cents). The buyer and seller agree that this is the total amount owed and that no further payment is required or The buyer agrees to pay the seller $______ on the date that this form is signed, with the balance owed of $______ to be paid at no greater than 60 days after this form is signed.
The seller affirms that the information concerning this vehicle is accurate to the best of his or her knowledge and belief.
The buyer accepts that the vehicle is sold “as is,” with no warranties or guarantees concerning this vehicle. The buyer further accepts this document as a receipt for this transaction.
Seller’s Name: __________________
Seller’s Signature: ________________
Date: ______________
Seller’s Address: _______________________ Apt. No.: ______
City: __________________ State: ____ Zip: ______
Phone No.: ___________________
Buyer’s Name: __________________
Buyer’s Signature: ________________
Date: ______________
Buyer’s Address: _______________________ Apt. No.: ______
City: __________________ State: ____ Zip: ______
Phone No.: ___________________
Bill of Sale for Car Sample
Note: Various bills of sale can look quite different when compared to each other. Nonetheless, there are certain items of information that will be found on every form. This information includes vital facts about the car such as the make, model, year, color and vehicle identification number. It’s also wise to record the odometer reading and perhaps also the license plate number.
BILL OF SALE
I, [Jonas Smith], the seller, in the [County of Franklin], in the [State of Ohio], in consideration of (two thousand twenty four) dollars, $2,024, to be paid by Karen Coleman, the buyer, the receipt of which is hereby acknowledged, do hereby sell and deliver unto Karen Coleman, buyer the following:
A [2002 Blue Chevy Monte Carlo Limited Edition] whose V.I.N number is [2G4T890GPC1234TU], mileage is [109,458 (one hundred and nine thousand, four hundred fifty eight)]. The car is in fair condition and has a salvage title after being in a flood. The car is red in color and has a dent on the driver’s right hand door. Car is in running condition at the time of sale.
I, [Jonas Smith] (Seller) hereby decree that I am the legal owner of the said vehicle and that it is owned free for all encumbrances. I have a right to sell the aforesaid vehicle and I will defend the same against any claims made lawfully by any persons. In witness this eighth day of [DATE].
X_____________________
[Jonas Smith]
[9809 Beaver Trail]
[Columbus, Ohio 43123]
[Seller]
X_________________________
[Karen Coleman]
[12567 St. Rt. 256]
[Reynoldsburg, Ohio 43068]
[Buyer]
Bill of Sale for Motorcycle Sample
Note: The form should include a space for the amount of the sale, including whether or not the debt has been fully paid. Frequently, it makes sense to record the sale price in numerals as well as in words to ensure that there are no misunderstandings. If the buyer still owes money on the car, then the form may stipulate how and when any upcoming payments will be made. It’s also essential for both parties to the transaction to sign and date the document.
The seller will also want to include any details regarding warranties or guarantees. Most private parties who are selling a used car do not offer any kind of warranty, and in these cases it is wise to state that the vehicle is sold “as is,” so that the seller is protected from most claims
BILL OF SALE
VEHICLE INFORMATION
Make:_____________ Model:______________ Year:_____________
VIN:________________________ Odometer reading: _______________ Color: _________
I, NAME AND ADDRESS OF SELLER, hereby certify that I am the lawful owner of the below mentioned vehicle, and I have the authority to sell it.
I have received AMOUNT, in the form of a personal check from BUYER’S NAME AND ADDRESS as full payment for the vehicle AS IS.
I hereby transfer full ownership of this vehicle to the buyer on DATE, and declare that it is free from any encumbrances, fees, taxes or liens.
The buyer accepts full liability for the vehicle including damages, and any other liability that occurs after the date of sale as stipulated above.
The seller made the vehicle available to the buyer on the above date of sale.
Seller’s Signature and DATE
Buyer’s Signature and DATE
Conclusion
I have been told that bill of sale examples are difficult to write, but here’s one you can change to suit your needs. The job of this bill of sale is to protect both buyer and seller when buying or selling an item. It serves to legally transfer ownership in the item from one party to the other.