A bill of sale, also referred to as a “purchase and sale”, is a document that establishes the details of a transaction between two (2) parties, Buyer and Seller. The form is usually very simple stating the financial terms of the agreement followed by signature of the seller (buyer’s signature may not be required). The monetary funds (such as cash or certified check) should exchange hands at the same time (which should also be date in the bill of sale).
Table of Contents
- By Type
- By State
- When to Use a Bill of Sale
- Key Terms
- Vehicle Information
- How to Write
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
A Bill of Sale is used when facilitating the transfer of ownership of an item, most commonly with motor vehicles but it can also be used for the following: Motorcycles, Boats, RVs, Aircrafts, Pet Animals, Furniture, and many types of Personal Property such as Electronics, Clothing, and Jewelry.
For personal items, a generic bill of sale will suffice as proof of ownership when a transaction takes place. All you need to do is enter the item’s information and have both parties sign the document.
The Seller should always be the party that provides the Bill of Sale as the Seller is at greater risk if any future disputes arise. However, the Buyer or the Seller may present a Bill of Sale in a transaction and both shall keep a copy when finalized as proof of payment (receipt).
For as simple and straightforward a Bill of Sales can be, it’s important to familiarize yourself with the language found inside your document.
AS-IS – A statement or clause within a bill of sale that states that the item is being bought or sold in its current condition, whether new or used, and that that the Buyer is accepting the item with all its faults. This protects the Seller and prevents the Buyer from coming back after a completed transaction with claims against the item.
Buyer (Purchaser) – The person in the transaction who pays money in the return for an item.
Gift – The act of giving an item to the “buyer” with no compensation in return.
Notary Public – A disinterested 3rd party public officer who can attest to the signatures of the Buyer and Seller. You can find a Notary Public at your local bank or by using a professional service.
Payment – The money used to pay for an item in a transaction.
Seller – The person or party in a transaction that is offering an item for purchase.
Trade-In – A type of transaction that starts with the buyer offering an item to the seller in equal exchange or at a discount for the Seller’s item. This type of transaction is commonly practiced in the car business when the buyer wants to trade in their used vehicle for another vehicle sold by the seller.
Vehicle Identification Number (VIN) – A unique 17 character code consisting of numbers and letters which is essentially the “serial number” of a vehicle. The VIN must be written into a vehicle bill of sale in order for it to be valid.
Not every state requires you to complete a bill of sale when finalizing a vehicle transaction. However, no state prohibits you from completing a bill of sale either. Even though many states do not require a bill of sale, they still offer an official form (therefore, it’s recommended to complete a bill of sale even if it’s not required in your state) which we have included below. For states that require you to use their specific bill of sale form, we have also included below. For more information regarding your vehicle or a bill of sale, contact your nearest DMV Office.
IMPORTANT: A Bill of Sale does not transfer Ownership of Title, it only shows proof that a transaction took place. You must sign over the Vehicle’s Title in order to transfer ownership.
After a bill of sale has been completed and the new owner has taken possession of the vehicle it will need to be registered in the State within a certain time-frame (usually between 10 to 30 days as determined by the respective State). Therefore, the Buyer will have to bring a copy of the signed bill of sale to their respective State or County Vehicle Department for registration along with the following items:
- Vehicle Title
- Odometer Disclosure Statement (if you car is younger than 10 years and under 16,000 pounds)
- Proof of Car Insurance
- Identification (such as a Driver’s License)
- Fee(s) – There is a tax or fee charged in every State.
- *Emissions Test (*only required in some States)
Do I need a Bill of Sale when selling my car?
Depending on which state and sometimes even the County you are located, a Bill of Sale may or may not be required. By adding an extra layer of protection for the Seller, this document should always be included and completed when a vehicle transfers ownership. See if your State requires it here.
How do I prevent disagreements from the Purchaser after the sale?
Preventing future disputes between the Buyer and Seller is mainly a reason for a Bill of Sale, therefore it’s important to input as many details as possible to maximize the effectiveness of your Bill of Sale. Adding and completing a Certificate of Acknowledgment will further strengthen the power of your Bill of Sale.
What is the difference between a Sales Agreement and a Bill of Sale?
A Sales Agreement is categorized as a contract and allows you to enter more detailed information pertaining to the sale of goods and services. A Bill of Sale acts more as a receipt (proof of purchase) and does not necessarily hold any contractual bearings.
Does the Buyer (Purchaser) need to sign the Bill of Sale?
Due to the varying laws within each state pertaining to this issue, it’s important to check your local laws if you decide to not have the Buyer sign the document. When possible, it’s always best to have the Buyer sign the Bill of Sale.
When do I deliver the Bill of Sale to the Buyer?
Typically after paying for an item, you receive a receipt showing proof of your purchase. A Bill of Sale should work in the same way, by only delivering the Bill of sale after payment has been received by the seller.
When would I need to use a Promissory Note?
The only time a Promissory Note should be used is when the Buyer does not have enough funds to pay for the Seller’s item in full at the time of purchase. By issuing a Promissory Note, the Buyer promises to pay over a period of time for the Seller’s item.
This example shows you how to fill-out and complete a Motor Vehicle Bill of Sale. If your state requires a bill of sale but does not provide it for you, this is the form you would need when buying or selling your car.
Step 1 – Buyer & Seller
For best results, download your Motor Vehicle Bill of Sale in PDF format. It’s formatted so you can easily write your information in the blank spaces. First and foremost, enter the following:
- Date Created
- County and State
- Name and Mailing Address of both Buyer and Seller
Step 2 – Payment Type
There are only 3 ways in which your transaction can go; a payment, trade-in, or a gift. Check one of the 3 possibilities.
- If the transaction is by Payment or Trade-in, you must enter the vehicle’s information such as the Make, Model, Body-type, Year, Color, and the miles on the Odometer.
- If the vehicle is a Trade-in, enter the vehicle being received.
Step 3 – VIN, Taxes, and Other Terms & Conditions
The VIN number (Vehicle Identification Number can be found on the vehicle’s title, registration card, and even the owner’s manual. It shouldn’t be that difficult to find. You will know you have found the VIN if all the letters and numbers add up to 17 characters.
- Enter the 17 character VIN.
- Taxes can either be included or excluded in a sale, checkmark the box accordingly.
- Enter terms and conditions within the sale. For example: The sale will not be complete unless the ski rack is attached when the car is sold.
Step 4 – Odometer Disclosure Statement
An odometer disclosure statement is required by federal law when transferring ownership of a motor vehicle. The Seller’s Name and an accurate milage count read on the odometer must be entered. If for some reason, possibly due to a faulty odometer, the milage count is not accurate, select the appropriate checkmark.
- Complete your Odometer Disclosure Statement with signatures from the Buyer, Seller, and two witnesses.
Step 5 – Certificate of Acknowledgment
A certificate of acknowledgment is a form that certifies absolute proof that a Bill of Sale used in a transaction is valid. The Buyer and Seller must be present in the presence of a Notary Public when this form is completed. Enter the following information:
- State and County
- Date of Execution
- Names of Buyer(s) and Seller(s)
- Notary’s Name and Signature