Learn How to Complete a Vehicle Bill of Sale

Understanding What a Vehicle Bill of Sale Is

A vehicle bill of sale is a written document that records the transfer of ownership of a motor vehicle from one person to another. This document serves as proof that the sale took place and identifies the key details about both the seller and the buyer. The bill of sale is one of the most important papers you'll handle when buying or selling a vehicle because it creates a legal record of the transaction.

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In most states, the bill of sale is required before you can register a vehicle with the Department of Motor Vehicles (DMV) or equivalent agency. Some states require it before the title can be transferred. Without this document, the new owner cannot legally prove they purchased the vehicle, and the seller cannot prove they no longer own it. This protects both parties in case disputes arise later about the sale.

The bill of sale differs from the vehicle title, which is the official government document that shows who legally owns the vehicle. The title is issued by the state, while the bill of sale is created by the buyer and seller themselves. You may need both documents to complete a vehicle purchase. The bill of sale provides the evidence of the transaction, while the title transfer shows the official change in ownership with the government.

Bills of sale are used for many types of vehicles, including cars, trucks, motorcycles, RVs, boats, and ATVs. The information required may vary slightly depending on the type of vehicle and your state's requirements. Some states have specific forms they prefer, while others allow you to create your own document as long as it contains certain required information. Checking your state's DMV website will tell you what format is accepted where you live.

Practical takeaway: Before you begin writing a bill of sale, visit your state's DMV website to learn whether your state has a specific form you must use or whether you can create your own document. This simple step prevents delays when you're ready to register or transfer the vehicle.

Required Information for a Vehicle Bill of Sale

A complete bill of sale must include specific pieces of information about the vehicle and the people involved in the transaction. The most critical information is details about the vehicle itself. This includes the vehicle identification number (VIN), which is a 17-character code that uniquely identifies each vehicle. The VIN can be found on the vehicle's dashboard, on the driver's side, or on the title document. It's essential to copy this number exactly as it appears, because even a single digit error can create problems when registering the vehicle.

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You'll also need the vehicle's make, model, year, color, and license plate number. Some bills of sale ask for the odometer reading, which is the number of miles the vehicle has been driven. Including the odometer reading creates a record of the vehicle's condition at the time of sale. All 50 states require odometer readings on bills of sale for vehicles less than 10 years old. The color of the vehicle should match what appears on the title document.

The bill of sale must identify both the seller and the buyer with their full legal names and current addresses. If there are multiple owners listed on the title, all owners should sign the bill of sale. The same applies if there are multiple buyers—all parties should be listed and should sign. Including complete contact information for both parties helps with future communication if questions arise about the sale.

The document must show the sale price or the amount paid for the vehicle. This is the actual amount of money exchanged, not the estimated value. If the vehicle was traded for something other than money, you should describe what was exchanged. Some people wonder if they should list a lower price to reduce taxes, but this is not legal. The actual sale price must be recorded. Additionally, the bill of sale should include the date of the sale and the condition of the vehicle—for example, whether it's being sold "as is" or with certain representations about its condition.

Practical takeaway: Create a checklist before writing your bill of sale: VIN, make, model, year, color, license plate, odometer reading, seller's full name and address, buyer's full name and address, sale price, date of sale, and vehicle condition. Verify each piece of information against the vehicle's title and the vehicle itself to prevent errors.

Step-by-Step Instructions for Completing the Bill of Sale

Begin by obtaining the correct form for your state. Many state DMV websites provide free downloadable bill of sale forms. If your state doesn't have an official form, you can use a generic bill of sale template or create your own document. The document can be typed or handwritten, though typed versions are generally clearer and less likely to cause confusion. If you handwrite the form, use black or blue ink and write as neatly as possible.

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Start by entering the date at the top of the document. This is the date the sale occurs, not a future date. Write out the date in full—for example, "January 15, 2024"—rather than using abbreviations. Next, fill in the seller's information. Include the seller's full legal name as it appears on the vehicle's title. Add the seller's street address, city, state, and zip code. If the seller has a phone number or email address they wish to include for contact purposes, this can be helpful but is typically optional.

Move to the buyer's information section. Write the buyer's full legal name and complete address. If the vehicle will be registered to multiple people, list all of them with their names and addresses. Then complete the vehicle information section. Carefully copy the VIN from the title or vehicle. Write out the vehicle's make, model, and year. Include the color of the vehicle and the current license plate number if known.

Enter the odometer reading exactly as it appears on the vehicle's odometer at the time of sale. The odometer reading must be recorded even if you don't know it—in that case, you may write "unknown" if permitted by your state. Write the sale price in both numeric and written forms. For example, write both "$5,500" and "Five Thousand Five Hundred Dollars." This reduces the risk of misunderstanding the amount. Include any notes about the vehicle's condition, such as "as is" or descriptions of any known issues. Both the seller and buyer should sign and date the document where indicated.

Practical takeaway: Fill out the bill of sale in a quiet location where you can focus carefully. Double-check every entry against the vehicle's title and the vehicle itself. Have both the buyer and seller review the completed document before signing to catch any errors.

Common Mistakes to Avoid When Completing a Bill of Sale

One frequent error is copying the VIN incorrectly. The VIN is a complex string of numbers and letters, and even a single mistake can create serious problems when the buyer attempts to register the vehicle. To prevent this error, copy the VIN three times independently—once from the title, once from the vehicle's dashboard, and once by typing it yourself—and verify that all three versions match before writing it on the bill of sale.

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Another common mistake is leaving blank spaces on the form. If a particular field doesn't apply to your situation, write "N/A" (not applicable) or "none" rather than leaving it blank. This shows that the field was considered but doesn't contain information, rather than making it appear as though the form is incomplete. Blank spaces can be interpreted as missing information and may cause delays with the DMV.

Many people make errors with the sale price. Some buyers and sellers try to write down a lower price than the actual amount to reduce sales tax, but this is illegal. The bill of sale must reflect the true amount exchanged. Additionally, make sure the numeric price and written-out price match each other. If they don't match, the DMV may refuse to process the document. Inconsistent prices also create a record that raises questions about the legitimacy of the sale.

Spelling errors and unclear handwriting cause problems too. If the document is handwritten, print clearly using capital letters for names and important information. Spell out words completely rather than using abbreviations, with the exception of standard abbreviations like "St." for street or "Ave." for avenue. Make sure the date is written clearly. Dates written in different formats—such as "1/15/24" versus "January 15, 2024"—can be confusing and may be rejected.

A significant mistake is having the document signed but not notarized when your state requires notarization. Some states require the bill of sale to be signed in front of a notary public, while others do not. Check your state's requirements before finalizing the document. If notarization is needed, both parties must