A bill of sale is a legal form used for documenting the transfer of ownership in personal property from one party to another. It can must be signed by both parties after the seller has received full payment from the buyer.
Bill of Sale: By Type
Motor Vehicle (most popular) – The most common type of bill of sale. Used for selling personal and commercial cars and trucks.
Aircraft / Airplane – For selling a personally owned civilian aircraft.
ATV – Documents the sale of an ATV, also known as an “All-terrain vehicle” or “4-wheeler”.
Bicycle – For selling a manually or electrically-powered bike.
Boat (Vessel) – Provides proof that a person paid a specific amount of money in exchange for ownership rights for a watercraft.
Business – Also known as a “purchase agreement”, the document outlines the terms and conditions for the sale of a business. More involved than a standard bill of sale form.
Cat / Kitten – Serves as a record that an individual purchased an adult cat or juvenile kitten from a breeder or owner.
Dog / Puppy – Used by breeders and owners to specify the terms and conditions for the sale of a grown or juvenile dog.
Equipment – For selling tools, powered machinery, construction vehicles, and other industrial items.
Firearm / Gun – Records the sale of one (1) or more firearms from one person to another.
Furniture – Gives proof that a transaction in which one (1) or more pieces of furniture was sold.
General – A non-specific bill of sale that can be used for selling anything.
Horse – Includes information on the breed, sex, and DOB of the horse, in addition to the amount ($) it sold for.
Jet Ski – A form specifically-designed for selling lake or ocean-based personal watercraft.
Livestock – Confirms that the ownership of livestock (chickens, cattle, goats, pigs, etc.) officially changed hands.
Mobile Home – For selling new or used pre-fabricated structures.
Moped / Scooter – For selling motorized two (2) wheeled vehicles, that typically do not exceed 100cc.
Motorcycle – Confirms that the ownership of a motorcycle officially changed from one person to another.
Notarized – Contains space for a Notary Public to sign their name.
RV – Used by dealers and private sellers for stating another person paid a specific amount ($) of money for their motorhome or camper trailer.
Tractor – Contains the terms and conditions regarding the sale of a tractor to be used in agriculture, landscaping, and/or construction.
Trailer – Makes the sale of a commercial or personal-use trailer official.
Bill of Sale: By State
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
What is a Bill of Sale?
Definition: “An instrument used for the conveyance [transfer] of title to personal property”
A bill of sale serves as legal proof that a person or entity paid a certain amount of money to another person, in exchange for a physical good. It serves as a transfer of ownership, although motor vehicles (and other vehicle-types) require the vehicle’s title to be signed to officially transfer ownership. As an overview, a bill of sale does the following:
- Serves as a record / receipt of the transaction,
- Allows the new owner to register the vehicle, and
- It proves ownership and prevents fraud.
How to Sell a Vehicle
Selling a vehicle can appear like a complicated process when viewed as a whole, but becomes far more manageable when broken down into smaller steps. To go about selling a car, the following steps should be followed:
- Step 1 – Collect Paperwork
- Step 2 – Understand the Car’s Value
- Step 3 – Prepare the Vehicle
- Step 4 – List the Car
- Step 5 – Completing the Sale
Step 1 – Collect Paperwork
Before creating ads and trying to find a buyer, it’s important that the owner understands the finances surrounding the vehicle and gets a hold of all the necessary documentation. If the vehicle has a loan, the seller will have to sell it for enough to allow them to pay the loan off, or they’ll have the pay the remaining loan in person. Because the lending institution typically holds the vehicle’s title until the loan is paid off, the seller should get into contact with their loan provider to identify the best way of taking care of the loan.
If the car doesn’t have an outstanding loan, the seller only needs to ensure they have the proper documentation, which includes the vehicle’s:
- Mechanical history (receipts from work done on the vehicle, parts, aftermarket accessories, and other related costs)
- Vehicle history report (while not required, it saves a potential buyer from having to go through the process, and shows the seller has nothing to hide).
CarFax can be used to obtain a report on a vehicle. A single report will cost the owner $39.99 to run. The report will provide the following information for the vehicle:
- Information on the title (clear, rebuilt, salvage, junk, etc.);
- Owner information (the fewer number of owners the better);
- What the vehicle was used for (personal, leased, commercial vehicle);
- Accident history;
- Recalls (if any); and
- Mileage reports.
Step 2 – Understand the Car’s Value
To sell a motor vehicle, the first step the owner should take is to look up the vehicle’s price on a vehicle pricing platform. The two (2) most popular tools for obtaining an estimate of a car’s value include:
Include any additional features such as heated seats, premium packages, or a sunroof when entering information into the valuing tool. The more information that is included, the more accurate the valuation will be, allowing the seller to get the most money for their vehicle.
Step 3 – Prepare the Vehicle
Taking the time to give the vehicle a thorough detailing is highly recommended. Cleaning both the interior and exterior of the car shows to prospective buyers that the owner cares for the vehicle, and increases the value of the car mentally (even if nothing has been technically changed).
Additionally, any mechanical and glaring body issues should be fixed as well. While it will cost money upfront, it almost always pays off greater when it’s time to sell. Not to mention it is drastically more difficult to sell a vehicle with issues than one ready to go on a long-distance drive. The seller should also ensure the vehicle is inspected, as it points to the fact that the car is in good condition (and is one less thing a new buyer would need to get done).
Step 4 – List the Car
Start by taking high-quality pictures of the vehicle. In the best-case scenario, this should be done immediately after detailing the vehicle. The pictures should include a mix of up-close and distance shots, exterior and interior, any pictures of existing damage, at least one (1) underbody shot, a picture of the gauges/buttons (gives a sense of wear and tear), and any other pictures the seller can think of. The obvious point is that the more the seller can get across in their pictures, the more likely they are to get interested buyers. While a seller may be tempted to gloss over scuffs and marks on the vehicle, being honest about the vehicle allows the seller to remain firm in their price, and reduces stress when it comes time to show prospective buyers the vehicle.
Once all the necessary pictures have been taken, the seller will need to post the car on an online selling platform. Popular selling platforms can be found in the table below.
Once the car has been posted on one (1) or more online marketplaces, the seller can either wait until they receive an inquiry, or they can take further action and place “for sale” signs in the vehicle (and park it in an obvious location), list it in a local newspaper (online and/or print), or put up flyers in places that receive a lot of foot traffic.
Once the seller finds someone interested, shows them the vehicle, and receives an offer, they can 1) accept the offer, 2) reject it, or 3) negotiate (recommended). Prior to beginning any negotiation, the seller should determine the maximum lowest price they are willing to accept. This way they don’t unintentionally sell the vehicle for a very low price while “in the heat” of a negotiation. Once the seller and buyer negotiate on a price they both agree on, they will need to complete the sale.
Step 5 – Completing the Sale
The bill of sale should be completed after receiving payment from the buyer. Accepting personal checks is not recommended due to the potential for fraud. It is recommended buyers only accept payments that can be verified by a bank before handing over the keys to the vehicle.
Recommended payment methods:
- Cashier’s / certified checks – Meet the buyer at the bank. This allows the seller to see in-person that the check is not faked and is issued by a real bank.
- Cash – Like checks, cash can be faked. To ensure the money is real, go to the bank with the buyer to see the teller provide the cash to the buyer.
- Escrow – Trusts a third (3rd) party with the funds. They will hold and distribute the funds in accordance to the instructions given to them. This is the best option for long-distance transactions.
Once payment has been received, the seller can begin drafting the bill of sale. They will need to enter the specs of the vehicle, the contact information of the parties, the agreed-upon purchase price, and any other necessary information. The parties will then need to sign the form. This can be done in-person or for free through eSign (recommended option). A copy of the signed bill of sale should be kept by both parties for record-keeping purposes.
Once a bill of sale is complete, the seller will need to transfer the title to the buyer. If the vehicle’s title is from one of the eight (8) states listed below, the parties’ signatures will need to be witnessed by a Notary Public (notaries can be found at UPS locations, banks, government offices, public libraries, or at Notarize.com)
So long 1) the buyer has paid the seller in-full, 2) the seller and buyer have signed a bill of sale, and 3) the title has been signed over to the buyer, the transaction is final. Congrats! Other than taking off the insurance on the sold car, the selling process has been complete.
Best Websites for Selling
|Item||Site / Platform|
|General (applies to most everything below)|
|ATV / UTV|
|Cat / Kittens / Dogs / Puppies|
|Equipment / Tractors|
|Firearm / Gun|
|Motorcycle / Moped / Scooter|
|Motor Vehicle (Cars + Trucks)|
Frequently Asked Questions (FAQ)
Does a Bill of Sale Need to be Notarized?
Possibly. There are currently five (5) states that require motor vehicle bill of sales to be notarized. These are:
What is the Purpose of the Title?
A vehicle’s title is issued by the state’s DMV (Department of Motor Vehicles) and is used to prove ownership. It contains detailed information regarding both the vehicle and its owner, including the make, model, year, VIN, odometer reading (at time of purchase), weight class, and lender information (if applicable), to name a few. In addition to the bill of sale, it is the most important document tied to the vehicle and is required for insuring and registering a vehicle after purchasing it.
Can a Title be Obtained with a Bill of Sale?
Yes. Although the new owner will need to obtain a bonded title, which functions in a similar fashion as to an original title. Because a title is the most important document pertaining to ownership, the buyer will need significant proof they are the rightful owner of the vehicle. There are many situations in which a person does not have access to the original title, of which can include 1) the buyer lost the title, 2) the buyer only received a bill of sale, 3) the title was improperly assigned to the new buyer, or 4) the vehicle was received as a gift (title not included).
While the process can differ significantly based upon the state, the following are the most-likely steps the DMV will require the new owner to take in obtaining a title:
- Attempt to acquire the vehicle’s title (such as contacting the previous owner);
- Complete any and all required forms from the DMV;
- Pay the necessary taxes and fees;
- Receive the bonded title.
A notable difference in a normal title and a bonded title is that the bonded title can be disputed. Depending on the state, the bonded title may be able to be disputed for up to three (3) years after it was obtained.1
In the United States, there are eight (8) states that require vehicle titles to be notarized during transfer. This means the parties have to sign the vehicle’s title in front of a certified Notary Public. Notaries serve as a verifiable third (3rd) party (a witness) that proves that the seller willingly transferred the vehicle title to the buyer. Once the seller and buyer sign the title, the Notary signs it after. It should be noted that titles are unique to each state – some may not require the buyer to sign the title. The following states require titles to be notarized:
- North Carolina
What to Include in a Bill of Sale
Depending on the item sold, bill of sale forms can range in complexity significantly. Some may be a total of one (1) page, whereas others can contain entire pages dedicated to one aspect of the agreement. Typically, the length of the form depends on the item being sold. The cost, complexity, and number of parties involved all affect the length of the form. However, regardless of the form’s length, for a bill of sale to effectively transfer ownership, it should contain a minimum of the following:
- Seller and buyer names and addresses;
- Party contact information
- Phone numbers
- Email addresses
- Information on the sold item
- Item description
- Model / type
- Manufactured date
- Serial / VIN number(s)
- Mileage / Condition
- Language stating the buyer understands the item is sold “as is”
How to Write
The following are instructions for completing a general bill of sale for a motor vehicle (the most popular type). Note that the process may differ for states that require notarization or the use of a state-provided form.
Before heading to the first step, the bill of sale will need to be downloaded. The PDF option contains fillable fields and is the recommended option. For making edits, sellers should download the Word (.docx) version. If the seller doesn’t have access to Microsoft Word, the OpenDocument version is suggested.
Step 1 – Vehicle Information
In this section, the seller will need to enter details regarding the vehicle that is being sold. Enter the following regarding the motor vehicle (includes examples):
- Make – “Ford, Chevrolet, Subaru, Honda”
- Model – “F-150, Cruze, WRX, Civic”
- Style / Body Type – “XLT, 4-door, Limited”
- Year – “2012, 1998, 2002”
- VIN # – “3VWCD31Y85M368547” (sample)
- Odometer reading – “62,234”
If the state requires the bill of sale to contain the cylinders (ex: “4 Cyl”), the seller can write said information below the table.
Step 2 – The Parties
This section specifies who the seller and the buyer are. Prior to entering each party’s information, the date of the sale should be entered (day / month / year).
Then, the following information should be recorded regarding the buyer and the seller:
- Full names
- Addresses (Street, City, State, & ZIP)
- Phone # (optional)
- Email (optional)
Step 3 – Payment
The vehicle can be sold/given in one (1) of three (3) ways:
- Payment – The amount of money the buyer paid. First, enter the value numerically (“$1,000”), followed by the value in words (“One-thousand”).
- Gift – If the seller gave the vehicle as a gift to a friend or family. Enter the estimated value of the vehicle in the same way as “Payment”.
- Trade-in – If the seller is selling their vehicle to a dealership, and purchasing a new vehicle at the same time. First, enter the amount the buyer is paying for the new vehicle, followed by the value the dealership is paying for the buyer’s trade-in. Enter the information of the trade-in in the table.
Next, check the option that corresponds to the method of payment the buyer is making to the seller. Then, check whether or not taxes will be included in the final purchase price. If the seller has any other terms or conditions they intend to pose on the buyer, write them on the two (2) lines provided.
Step 4 – Signatures
The document should be signed after the seller has received payment in-full from the buyer. At a minimum, the bill of sale needs to be signed by the buyer and the seller. The form contains space for up to two (2) buyers and sellers. Additionally, the form contains space for a witness’ signature. While not typically a requirement, having a witness view the signatures of the buyer and seller (and sign the form) adds weight to the validity of the contract.
So long all fields have been completed and the signatures of the party have been recorded, the bill of sale will be complete. The seller should now sign the title over to the new buyer and remove the insurance from the vehicle.