A bill of sale for car transactions serves as a vital document that records and authenticates the details of a motor vehicle sale. It contains essential information about the transaction, such as the vehicle’s purchase price and VIN.
While this legal document acts as a receipt that confirms and records motor vehicle transactions, it does not provide legal proof of ownership after the transfer. As a result, new owners must obtain a title to demonstrate their ownership of the vehicle. Depending on your state’s DMV regulations, the seller may need to submit a completed bill of sale template before finalizing the title transfer paperwork.
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The requirements for a car bill of sale vary across states. All states require that the document includes the vehicle’s odometer reading. Some ask for signatures from both parties involved in the transaction. Conversely, other states require only the seller’s signature to transfer ownership and establish proof of sale. Regardless of the specific regulations, a bill of sale remains a crucial component in the process of buying or selling a car and its further registration by the buyer.
First, a car bill of sale serves as a receipt that validates the transfer of a vehicle from the seller to the buyer. Although not mandatory in most states, it is advisable for both parties to complete this form during the private transaction of motor vehicles, as it provides protection in the event of potential disputes or complications.
Second, a bill of sale can absolve the seller from any liability if the vehicle is involved in a road accident. Additionally, for the buyer of a used vehicle, a properly executed form offers proof of title transfer, confirming their legal ownership and full rights to the car. Should the vehicle violate any traffic laws, the seller can utilize the bill of sale in legal proceedings to demonstrate that they no longer own the vehicle, thereby avoiding criminal liability.
Third, when completed accurately, a bill of sale form can also function as a loan instrument, similar to a promissory note. For example, if a buyer is purchasing a vehicle in installments, the document can be structured as a bill of sale. However, the transfer of title and possession will only occur after all outstanding payments have been made, ensuring a comprehensive transaction process. As a result, state regulations on car bill of sale requirements help to prevent abuse by either the seller or the buyer.
The following guidelines are designed for the template available on our site, which allows you to create your own bill of sale. However, if a document is available from your local authorities, you can also use that for the transaction.
Include the exact purchase date and agreed-upon amount. Indicate the chosen payment method:
Next, state the payment method:
Finally, indicate whether all applicable sales taxes are included in the final cost.
The seller confirms their ownership of the vehicle, their right to sell it, and that there are no liens on it. They also verify that the vehicle information provided is true, accurate, and complete to the best of their knowledge.
The “as-is” clause states that the seller offers no warranties and is not responsible for maintenance after the transfer.
Though not always required, obtaining the buyer’s signature can offer additional legal protection. Both parties may also choose a witness to attest to the transaction and sign the bill of sale.
While notarization is usually not mandatory, it can provide extra legal security. If you decide to notarize the document, locate a local notary public. Once notarized, the bill of sale offers stronger protection for both the previous and new owner, similar to purchase agreements.
A bill of sale is required for a title change in many states, so the buyer should keep the original. As a seller, you can either retain a copy or have all parties sign and complete two identical forms. Generally, the new owner should register the vehicle at their local DMV or county office.
