How to Write a Bill of Sale for a Vehicle
What is a Vehicle Bill of Sale?
When selling a vehicle, you need a vehicle bill of sale to document the transaction. This legal document serves as proof of purchase, detailing who sold the vehicle and to whom. While not every state mandates a bill of sale, having one is highly recommended. It not only confirms that payment or trade has occurred, but it can also outline the terms of the sale, offering legal protection to both parties.
Depending on your state, a bill of sale may be required to confirm the transfer of ownership, preventing ongoing tax liabilities for the previous owner. Additionally, the bill of sale helps the Department of Motor Vehicles verify that the buyer rightfully owns the vehicle and is eligible for title and registration. If you’re wondering how to get a bill of sale, you can create one easily using an online form service like FormPros.
Lastly, this document also plays a role in determining the tax owed on the vehicle, as it provides the DMV with the purchase price.
How to Make a Bill of Sale for a Vehicle
If you’re unsure how to make a bill of sale, follow these essential steps to ensure clarity and legal compliance:
1) Gather Essential Buyer Information
- Include the buyer’s full legal name and physical address. If title issues arise later, this ensures you can reach the buyer. Always verify the name spelling using a government-issued ID.
2) State the Payment Terms Clearly
- Indicate whether the vehicle is paid in full or if the buyer is making payments.
3) Include the Purchase Price
- Clearly state the price paid for the vehicle. If the payment includes a trade-in, specify the traded item and its agreed-upon value.
4) Define the Payment Method
- Mark whether the payment was made in cash, check, credit card, or an alternative method such as PayPal. If a trade is involved, specify the terms and any additional payment required.
5) Ensure the Date of Sale is Accurate
- The transaction date is crucial for tax and legal purposes.
6) Provide Detailed Vehicle Information
- Include details such as the year, make, model, VIN, mileage, and current license plate number (remember to remove your plate before transferring the vehicle).
7) Specify the Location of the Transaction
- List the city, county, and state where the transaction took place.
8) Include Both Parties’ Signatures
- While some states allow only the seller’s signature, others require both parties to sign for it to be legally binding.
How to Write a Bill of Sale with Warranty Information
If you’re wondering how to write a bill of sale, make sure it includes warranty terms. Otherwise, a buyer could later claim that you misrepresented the vehicle’s condition.
If selling the vehicle “as is,” clearly state that the sale is without warranty. This prevents the buyer from demanding repairs after the sale. If the vehicle does come with a warranty, specify the coverage period and conditions.
For example, if the buyer experiences an issue immediately after purchase, a properly drafted bill of sale ensures they understand the vehicle is no longer the seller’s responsibility. However, you must also be honest about known defects—intentionally hiding major problems could lead to legal repercussions.
Common Mistakes to Avoid
Avoid these pitfalls when finalizing a bill of sale:
Failing to notify the DMV — Always report the sale to the DMV. This helps prevent liability if the buyer receives tickets or is involved in an accident before transferring the title.
Not using a notary or witness — While not always required, notarizing the bill of sale can help prevent disputes, especially for out-of-state transactions. Be cautious of scams, particularly buyers who claim to be military personnel but refuse to provide military ID.
Releasing ownership before receiving full payment — Never hand over the vehicle title or bill of sale until the payment is verified. Scammers often attempt to take possession of a vehicle without making a valid payment.
How to Add Additional Terms to a Bill of Sale?
If you’re learning how to create a bill of sale, you should know that it can include more than just payment and vehicle details. Some buyers and sellers negotiate additional conditions, such as partial cash payments combined with services.
For instance, Joan is selling her 2011 Ford Echo and agrees to accept $1,500 in cash plus a pressure washing service valued at $500. Since she also agreed to detail the car before the sale, both conditions should be documented in the “Additional Terms” section.
If you negotiate services as part of the deal, be specific. Instead of vague wording like “pressure wash the house,” specify the type of soap and any additional work required, such as sealing exposed wood.
To prevent unauthorized changes, mark the “Additional Terms” section as “Not Applicable” if no extra conditions apply.
How to Make a Bill of Sale for a Car
For those asking how to make a bill of sale for a car, the process remains straightforward. The document must contain:
- Buyer and seller information
- Vehicle details (VIN, make, model, year, mileage)
- Sale price and payment method
- Any applicable warranties
- Signatures from both parties (if required by state law)
A properly formatted bill of sale protects both the seller and buyer, ensuring a smooth vehicle transfer.
Who signs the Vehicle Bill of Sale?
If the vehicle title includes multiple owners, all listed individuals should sign the bill of sale. However, if only one spouse is listed, they alone should sign—unless a power of attorney allows the other spouse to act on their behalf.
Visit FormPros to Create Your Vehicle Bill of Sale Today
FormPros’ vehicle bill of sale has everything you need to protect yourself in a vehicle sale transaction, including warranty information and room for more than one signature. Our intuitive forms ask the necessary questions so you can create a vehicle bill of sale that protects you quickly, without spending hundreds on a lawyer. We offer customized forms to help you in many areas including: business, family, personal transactions, real estate and taxes.
Create Your Vehicle Bill of Sale
FormPros Has You Covered
Simplify your paperwork with FormPros! From creating paystubs, W-2s, and 1099-NEC forms to generating LLC Operating Agreements and even voided checks, our easy-to-use platform has you covered. Save time, reduce errors, and handle your business documents with confidence. Start now and see how FormPros makes professional form generation fast, affordable, and hassle-free!
