Key Takeaways
- A used car bill of sale serves as a legal receipt and proof of ownership transfer for private vehicle transactions.
- While not required in all states, sixteen states mandate a bill of sale to complete the registration process.
- Essential components include the VIN, purchase price, odometer reading, and "as-is" warranty disclosures.
- Documentation should be verified against local DMV requirements, as some states require notarization to be valid.
If you are selling your car, a bill of sale records the transfer of ownership. A used car bill of sale shows the transaction terms and serves as written proof that you sold the car.
It is recommended to complete a bill of sale form even if it is not state law where you live if you plan to sell your car privately. Also, you will need a bill of sale since your local DMV will need to see proof of purchase.
Do I Need a Bill of Sale When Buying a Used Car?
Some states require a motor vehicle bill of sale form; others do not. Even if only for your personal records, anyone who buys or sells a vehicle needs a bill of sale. Private used car dealers use bills of sale.
A bill of sale certifies and records the purchase while serving as a receipt and invoice for the transaction. It is a hybrid of a legal document between the car buyer and the seller that records the transfer of ownership between the two parties.
Here are some tips on preparing a car bill for sale, whether you are the buyer or the seller.
Who Needs a Bill of Sale for Used Cars?
Some states do not require a bill of sale, while others require a notary to validate the document. In Louisiana, Nebraska, Maryland, New Hampshire, West Virginia, and Montana, a notary public must witness the signing of the bill of sale.
While it is helpful for both parties, it is also beneficial to your local Department of Motor Vehicles (DMV) since they document all car sales with a paper trail.
The 16 states below require a bill of sale as part of their state laws:
| State | Law |
|---|---|
| Alabama | § 810-5-1-.246 |
| Arkansas | § 27-14-913 |
| Colorado | § 42-6-113 |
| Connecticut | § 42-225 |
| Hawaii | § 200-46 |
| Idaho | § 63-1104 |
| Maine | § 6012 |
| Nebraska | § 60-140 |
| New York | § 443 |
| Ohio | § 2921.13 |
| Rhode Island | § 31-4-9 |
| South Dakota | § 32-6B-3.6 |
| Vermont | § 2602 |
| Washington | § 308-56A-525 |
| West Virginia | § 46A-6-107a |
| Wyoming | § 31‑2‑103 |
Whether a bill of sale is required in your state or not, create one, so it can protect you as a seller or buyer. The bill of sale can serve as proof of the car's sale price for sales tax. It can serve as a liability protection document for the seller.
Writing a Bill of Sale for Used Cars
It may be good to fill out a bill of sale for a used car, even if many states do not require it, to document the deal between seller and buyer and make sure all the terms and conditions are in writing.
Here are the elements a car bill of sale should include:
- Sale date. The date on which the sale took place.
- Information about the car, such as:
- Year, make, and model
- Current mileage
- License plate number
- Vehicle identification number (VIN)
- How much the car will sell for. It is still necessary to create a bill of sale even if the car is a gift. If money exchanged hands, state the reduced price and that the car was a gift.
- Warranty information. In most cases, private party sales are "as is bill of sale," meaning no warranty is provided. If there is a separate agreement, include it in the as-is bill of sale.
- Buyer and seller's full names, addresses, and signatures. The buyer and seller should each get a copy of the document once you have completed it or filled in the blanks.
How To Properly Transfer a Car Title With a Bill of Sale
The car title, or certificate of title, serves as proof of ownership for a vehicle and you can complete a car title transfer with a bill of sale by following the steps below.
1) Contact the seller
The fastest way to transfer a title with a bill of sale is to speak to the seller. If they do not have a title to sign over to you because they misplaced it, request that they apply for a duplicate title. You can offer to cover the replacement costs, as this is often the most cost-effective and fastest way to resolve the matter.
2) Visit the DMV in Your State
Only the DMV can confirm whether you are eligible for a bonded title. To verify that you are the legal owner of the car, you will need to visit your local state branch.
The DMV staff will normally first help you explore options to see whether there are alternative ways to transfer the title. If no such choices are available, they will then determine whether your bill of sale is legitimate, and you can then continue with a bonded title application.**
3) Gather documents
To apply for a bonded title, you will need to present the required documents. The paperwork may vary by state, but most require your ID, the bill of sale, and a VIN search or inspection. If the car has a lien less than 10 years old, you may need to provide a lien release.
For example, Texas guidelines require the following additional documents.
- A Statement of Physical Inspection (Form VTR-270) to prove the vehicle is roadworthy
- Statement of Fact for Bonded Title (Form VTR-130-SOF - pdf) to explain why you do not have a title
Next, purchase a surety bond. The cost varies by jurisdiction.
4) Apply for a Bonded Title
To apply for the bonded title and complete this final step, you will need the accepted surety bond form and a completed and authorized DMV application or letter of approval. In some states, the DMV can approve the title. In others, the local Secretary of State may need to authorize it.
Use our customizable bill of sale template to help you with the process of creating your bill of sale for cars.
Who Pays Sales Tax When Selling a Used Car Privately?
Not everyone knows that used cars are subject to sales tax, just like a new car. If your home state requires a sales tax on vehicle purchases, you will pay this tax whether you buy a new or used car and whether you buy from a dealership or an individual.
Your tax bill will depend on several factors, including how much the car is worth, where it will be registered, and any other taxes your state imposes on car purchases. According to Ronald Montoya, senior consumer advice editor at Edmunds, most states charge their sales tax between 5% and 9%. Here are the states without a sales tax:
- Alaska
- Delaware
- Montana
- New Hampshire
- Oregon
Your county and city may levy their own sales taxes besides state sales taxes. Ensure you're paying all required taxes by contacting your state's Department of Motor Vehicles.
Sources:
https://www.dot.state.pa.us/public/dvspubsforms/BMV/BMV%20Fact%20Sheets/fs-odometer.pdf
Key Takeaways
- A used car bill of sale serves as a legal receipt and proof of ownership transfer for private vehicle transactions.
- While not required in all states, sixteen states mandate a bill of sale to complete the registration process.
- Essential components include the VIN, purchase price, odometer reading, and "as-is" warranty disclosures.
- Documentation should be verified against local DMV requirements, as some states require notarization to be valid.
If you are selling your car, a bill of sale records the transfer of ownership. A used car bill of sale shows the transaction terms and serves as written proof that you sold the car.
It is recommended to complete a bill of sale form even if it is not state law where you live if you plan to sell your car privately. Also, you will need a bill of sale since your local DMV will need to see proof of purchase.
Do I Need a Bill of Sale When Buying a Used Car?
Some states require a motor vehicle bill of sale form; others do not. Even if only for your personal records, anyone who buys or sells a vehicle needs a bill of sale. Private used car dealers use bills of sale.
A bill of sale certifies and records the purchase while serving as a receipt and invoice for the transaction. It is a hybrid of a legal document between the car buyer and the seller that records the transfer of ownership between the two parties.
Here are some tips on preparing a car bill for sale, whether you are the buyer or the seller.
Who Needs a Bill of Sale for Used Cars?
Some states do not require a bill of sale, while others require a notary to validate the document. In Louisiana, Nebraska, Maryland, New Hampshire, West Virginia, and Montana, a notary public must witness the signing of the bill of sale.
While it is helpful for both parties, it is also beneficial to your local Department of Motor Vehicles (DMV) since they document all car sales with a paper trail.
The 16 states below require a bill of sale as part of their state laws:
| State | Law |
|---|---|
| Alabama | § 810-5-1-.246 |
| Arkansas | § 27-14-913 |
| Colorado | § 42-6-113 |
| Connecticut | § 42-225 |
| Hawaii | § 200-46 |
| Idaho | § 63-1104 |
| Maine | § 6012 |
| Nebraska | § 60-140 |
| New York | § 443 |
| Ohio | § 2921.13 |
| Rhode Island | § 31-4-9 |
| South Dakota | § 32-6B-3.6 |
| Vermont | § 2602 |
| Washington | § 308-56A-525 |
| West Virginia | § 46A-6-107a |
| Wyoming | § 31‑2‑103 |
Whether a bill of sale is required in your state or not, create one, so it can protect you as a seller or buyer. The bill of sale can serve as proof of the car's sale price for sales tax. It can serve as a liability protection document for the seller.
Writing a Bill of Sale for Used Cars
It may be good to fill out a bill of sale for a used car, even if many states do not require it, to document the deal between seller and buyer and make sure all the terms and conditions are in writing.
Here are the elements a car bill of sale should include:
- Sale date. The date on which the sale took place.
- Information about the car, such as:
- Year, make, and model
- Current mileage
- License plate number
- Vehicle identification number (VIN)
- How much the car will sell for. It is still necessary to create a bill of sale even if the car is a gift. If money exchanged hands, state the reduced price and that the car was a gift.
- Warranty information. In most cases, private party sales are "as is bill of sale," meaning no warranty is provided. If there is a separate agreement, include it in the as-is bill of sale.
- Buyer and seller's full names, addresses, and signatures. The buyer and seller should each get a copy of the document once you have completed it or filled in the blanks.
How To Properly Transfer a Car Title With a Bill of Sale
The car title, or certificate of title, serves as proof of ownership for a vehicle and you can complete a car title transfer with a bill of sale by following the steps below.
1) Contact the seller
The fastest way to transfer a title with a bill of sale is to speak to the seller. If they do not have a title to sign over to you because they misplaced it, request that they apply for a duplicate title. You can offer to cover the replacement costs, as this is often the most cost-effective and fastest way to resolve the matter.
2) Visit the DMV in Your State
Only the DMV can confirm whether you are eligible for a bonded title. To verify that you are the legal owner of the car, you will need to visit your local state branch.
The DMV staff will normally first help you explore options to see whether there are alternative ways to transfer the title. If no such choices are available, they will then determine whether your bill of sale is legitimate, and you can then continue with a bonded title application.**
3) Gather documents
To apply for a bonded title, you will need to present the required documents. The paperwork may vary by state, but most require your ID, the bill of sale, and a VIN search or inspection. If the car has a lien less than 10 years old, you may need to provide a lien release.
For example, Texas guidelines require the following additional documents.
- A Statement of Physical Inspection (Form VTR-270) to prove the vehicle is roadworthy
- Statement of Fact for Bonded Title (Form VTR-130-SOF - pdf) to explain why you do not have a title
Next, purchase a surety bond. The cost varies by jurisdiction.
4) Apply for a Bonded Title
To apply for the bonded title and complete this final step, you will need the accepted surety bond form and a completed and authorized DMV application or letter of approval. In some states, the DMV can approve the title. In others, the local Secretary of State may need to authorize it.
Use our customizable bill of sale template to help you with the process of creating your bill of sale for cars.
Who Pays Sales Tax When Selling a Used Car Privately?
Not everyone knows that used cars are subject to sales tax, just like a new car. If your home state requires a sales tax on vehicle purchases, you will pay this tax whether you buy a new or used car and whether you buy from a dealership or an individual.
Your tax bill will depend on several factors, including how much the car is worth, where it will be registered, and any other taxes your state imposes on car purchases. According to Ronald Montoya, senior consumer advice editor at Edmunds, most states charge their sales tax between 5% and 9%. Here are the states without a sales tax:
- Alaska
- Delaware
- Montana
- New Hampshire
- Oregon
Your county and city may levy their own sales taxes besides state sales taxes. Ensure you're paying all required taxes by contacting your state's Department of Motor Vehicles.
Sources:
https://www.dot.state.pa.us/public/dvspubsforms/BMV/BMV%20Fact%20Sheets/fs-odometer.pdf
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