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When to Use a Bill of Sale

By: Nadia Ibanez June 2, 2012

Handing over a used car to a new owner might seem like a simple process, but there are a few necessary requirements you don't want skip.

What Is a Bill of Sale?

In many states, a bill of sale is one of these requirements.

Generally, the seller presents this document; however, if you're buying a vehicle from a private seller, it doesn't hurt to show up with one just in case the seller forgets.

(HINT: It's also a good idea for both parties to keep a copy for their records.)

Usually, a bill of sale includes:

  • The selling price.
  • The Vehicle Identification Number (VIN).
  • The vehicle's license plate number (though, not all states let license plates travel with vehicles once they're sold; in some states, the new owner will either transfer his own license plates or apply for new ones when he registers the vehicle).
  • The date and location of the transaction.
  • The names, addresses, and signatures of both parties.

When Should I Use a Bill of Sale?

Use a bill of sale when you sell your car privately to another party. Note that you should use a bill of sale if you sell a motorcycle, boat, trailer, or any other form of personal property.

On the other hand, when someone purchases a used car from a dealer, the dealership will take care of these documents.

Where Do I Find a Bill of Sale?

Usually, states that require bills of sale provide forms. Check with your DMV or your state's motor vehicle agency. Sometimes county clerks have copies of these forms.

Some states also accept generic bill of sale forms, so long as you include the vehicle’s year, model, identification number, and purchase price, along with the other aforementioned information.

Why Do I Need a Bill of Sale?

For the most part, the seller just needs a bill of sale for his own records, but on the other side of the equation, the buyer might need the form in order to complete the title transfer and register the vehicle. If you show up to the DMV or your local vehicle registration branch without a bill of sale, the attendant might turn you away until you can show the proper paperwork with the car’s purchase price.

Another important reason why a bill of sale is so necessary during title transfers is because some motor vehicle agencies use this document to calculate the vehicle’s license fee.

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