Motor Vehicle (Car) Bill of Sale Form

A motor vehicle bill of sale records and displays details as proof that a given seller sold a motor vehicle. A vehicle bill of sale also records a motor vehicle transaction’s critical information such as pricing and VIN.

This legal document acts as a receipt that confirms and records a vehicle sale transaction that occurred. However, it’s not legal proof of ownership after a motor vehicle’s transfer. Therefore, a new owner still needs a title to prove that they own the vehicle. Your state’s DMV may also require a seller to submit a completed bill of sale template before completing the title transfer paperwork.

Different states regulate how people use a bill of sale in deals. Some of them require a vehicle bill of sale to contain a motor vehicle’s odometer reading. Others stipulate that both parties sign a bill of sale to complete a sale deal. However, some transactions need only sellers to sign the auto bill of sale.

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Why Is a Motor Vehicle Bill of Sale Necessary?

A motor vehicle bill of sale or vehicle bill of sale acts as a receipt proving that you sold the vehicle to the buyer. However, the bill of sale is not mandatory in states like Michigan, Alaska, Illinois, and Tennessee. Nonetheless, it’s prudent for the vehicle buyer and seller to fill out a bill of sale form and write a bill of sale in personal motor vehicle contracts because it protects them should problems crop up.

For example, if the motor vehicle is caught in a road accident, you won’t bear any liability. If you purchased a secondhand vehicle, a duly drafted bill of sale proves that title transfer took place and that you’re the current legal owner of the car enjoying full ownership rights. Moreover, if the motor vehicle breaks traffic laws, the seller can use the bill of sale to prove that they had sold the vehicle, hence avoiding criminal liability.

According to statista.com, in 2019 in the United States, there were roughly 17 million sales of new motor vehicles and around 40.8 million used units. There is clearly a high demand for used vehicles, and if you are planning to buy or sell one, make sure to have an accurately filled bill of sale signed by both parties.

However, most states demand that you also execute title transfer to the new owner to finish the transaction and give them full ownership rights. Therefore, confirm with your state’s motor vehicle department to know if you need either a bill of sale or signed title to sell your motor vehicle or both to finalize the transaction.

If you fill out the bill of sale form accurately, you can utilize your vehicle bill of sale as a loan instrument. For instance, if you’re purchasing a motor vehicle in installments, you can frame the document as a bill of sale. However, the transfer of title and possession only happens after making every pending payment under the loan after a complete transaction process. Therefore, the state regulates the vehicle bill of sale combinations to avoid seller or buyer abuse.

Moreover, either party in the deal can use the bill of sale for tax reasons. Lastly, an automobile bill of sales gives you peace of mind after a successful title transfer.

What Requirements Should My Motor Vehicle Bill of Sale Meet?

Some states require the notarization of a motor vehicle bill of sale after completing a bill of sale form correctly. So, the vehicle buyer and seller must undergo identity verification and sign the vehicle bill of sale before a public notary.

Even if notarizing a vehicle bill of sale is not statutory in your state, doing so safeguards the two sides of the vehicle sale.

Some of the states where notarizing a motor vehicle bill of sale for the motor vehicle transaction is mandatory are Louisiana, Maryland, and Montana.

Others like Ohio have an additional document to the motor vehicle bill of sale called the promissory note. If a customer buys a vehicle in installments, they fill out the note on the official motor vehicle bill of sale. The note indicates the vehicle buyer and seller, its purchase price, and how long the buyer will take to finish paying the installments.

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How to Fill Out the Form

In some instances, motor vehicle departments provide the motor vehicle bill of sale. If you elect to document a vehicle bill of sale for your vehicle’s sale, ensure that you get the correct bill of sale form. When completing it, don’t forget to put the following information on your bill of sale:

  • The date of the sale
  • Addresses and names of the buyer and seller
  • State and county where the transaction will take place
  • Purchase price
  • Clear vehicle description
  • VIN (17-character vehicle identification number)
  • Odometer reading
  • Notarized signatures of both parties

Other additional data you may incorporate into the motor vehicle bill of sale or bill of sale:

  • License plate number
  • The methods used for payment
  • The number of months that the new vehicle owner needs to complete the payment (if paid in installments)
  • The last inspection date

Including all of these details on the vehicle bill of sale makes it clear to both sides involved in vehicle contracts.

How Do I Sell a Motor Vehicle?

Now you are up to date with all you need to know about a motor vehicle bill of sale or bill of sale for a car. Now, how do you sell your vehicle in just a few easy steps and transfer ownership rights smoothly? Below are the simple vehicle-selling steps to complete the transaction.

Step 1. Gather the necessary paperwork for the car’s transaction

How Do I Sell a Motor Vehicle Step 1

First, collect every legal document necessary for transferring the vehicle’s possession.

  • A vehicle history report would be handy to show everything that happened to the vehicle so that buyer sees the whole picture. 
  • Maintenance records would be another proof of proper vehicle ownership. If you have copies of these records, make them available to prospective buyers.
  • Odometer Disclosure is required on a federal level by the Truth in Mileage Act if your vehicle is 10 years old or newer and weighs 12,000 pounds or less.
  • The title is required for ownership transfer. If you’re still paying for the car, contact your lienholder for more information.
  • Bill of sale is a great way to document the terms and conditions of the deal in writing. By further notarizing it, you will be even more protected from possible disputes.

Step 2. Fix an asking price for the vehicle

How Do I Sell a Motor Vehicle Step 2

Check how many other cars like yours are sold around you. That way, you will be able to determine a reasonable price for your vehicle and make sure it can compete with others.

A good tip is to stay within the closest thousand. If you think that your car is worth $5,400, set the price at $5,850. This way, you will be able to negotiate the price down with the seller to your original amount. Also, don’t go over the $6,000 threshold. For example, setting the price at $6,100 would be a mistake.

Step 3. Clean and fix your vehicle

How Do I Sell a Motor Vehicle Step 3

Next, clean and fix the vehicle so that it looks nice and works flawlessly. If it has any mechanical defects, fix them before advertising the car.

You might have to do it a few times if your car is not cheap, as it might take longer to sell it. 

Put yourself in the buyer’s shoes, approach your newly washed car as if you were seeing it for the first time, get into the driver’s seat, and try to capture any negative things that draw your attention right away. If there’s none, you’re all set to start advertising.

Step 4. Advertise

How Do I Sell a Motor Vehicle Step 4

Next, advertise it in the right places such as eBay Motors or Craiglist.

Make sure to create as many high-quality photos of your car as possible. Take photographs in a nice area and with good lighting. Change angles when doing so and don’t forget to shoot inside the car as well. It’s a good idea to also capture your odometer reading and tire condition.

When using various advertising platforms, you will need to indicate basic details such as year, make, mileage, model, etc., the same details you will be indicated in your bill of sale.

Any additional details you might like to indicate can include the following:

  • Why you’re selling the car
  • Modification description
  • Warranty description
  • Mechanical problems disclosure
  • Negotiating terms
  • Acceptable payment methods
  • Willingness to fill out a bill of sale

Step 5. Screen prospects

man looking into car buyer background via laptop
Screen all bidders to separate serious ones from jokers, time-wasters, and scammers.

There are many people, who are just “flipping” cars. They want to buy vehicles at the lowest prices and then resell them at a higher amount.

Step 6. Organize a test drive

How Do I Sell a Motor Vehicle Step 5

After landing serious bidders, organize for them to test the car.

Choose a safe location to meet with your potential buyers and show them your vehicle. Choose crowded places and take a friend with you, just in case.

During the test drive, stay with them all the time but don’t push them to buy the car, trying to sweeten the deal in any way. Simply answer the questions they might have.

In case the buyer requests a car inspection, they should pay for the mechanic’s services. And, if any major problems you didn’t know about arise, you might have to consider lowering the price.

Step 7. Finish the transaction

How Do I Sell a Motor Vehicle Step 6

After test driving and agreeing on the price, sell it, and close the deal.

Make sure the buyer is ready to pay the full amount you agreed upon and that there are no unclear matters left.

After signing the title, you can give a vehicle bill of sale to the buyer and, in some states, a release of liability to relinquish ownership.

For more legal protection, it’s a good idea to have both parties sign one copy of the same bill of sale and notarize it.

Can I Create a Motor Vehicle Bill of Sale Online?

If your state does not require a vehicle bill of sale or isn’t specific on what a bill of sale must contain, you can use a free bill of sale template for a car. Fill out a free form that we offer or use our step-by-step builder to create a highly-personalized bill of sale for your needs.

Published: Sep 15, 2020