How to Write a Bill of Sale
A bill of sale fits on one page and takes ten minutes. What makes it hold up is being specific: exact names, the exact item, the exact price and date, and the right promises.
The seven parts, explained
Tap through the sample document. Each clause shows what it does and what goes wrong without it. If you like learning this way, ahaboo has narrated, interactive explainers on how everyday things work, from tax brackets to compound interest.
1 of 7 · The parties
What it does
Full legal names and addresses identify exactly who gave up ownership and who took it. Without them, the document can't prove the buyer is the person now registering the vehicle.
What goes wrong without it
A first name or a nickname. The DMV clerk can't match it to an ID and may reject the paperwork.
Step by step on sale day
- Check the title first. The seller's name on the title must match their ID, and there should be no lienholder listed (or a lien release attached).
- Match the identifiers. Compare the VIN or hull ID on the title with the one on the vehicle itself. Type it into the generator; the check digit test catches most typos.
- Write both full legal names and addresses, as they appear on each person's ID.
- Describe the item with year, make, model, color and serial number. For a general item, add anything that makes it unique.
- State the price in figures and in words, and how it was paid. If it's a gift, say so; many states exempt gifts between family members from sales tax, but they may ask for a separate affidavit.
- Record the mileage for vehicles under 20 model years old, and add the as-is clause unless you're giving a warranty.
- Sign, date and copy. Both parties sign; each keeps a copy. Add a notary block if your state requires it.
Common mistakes
- Writing a lower price to cut sales tax. It's tax fraud, and many states tax on book value anyway.
- Leaving the buyer's name blank ("open title"). Illegal in most states and it leaves the seller liable for the car.
- Handing over plates. In most states plates stay with the seller.
- Not filing a notice of sale. Until you do, tickets and tolls may still come to you.
Questions people ask
What makes a bill of sale legal?
It must identify the seller and buyer, describe the item precisely, state the price (or that it is a gift) and the date, and be signed by the seller. Buyer signatures and a notary are extra protection and in some states a requirement.
Who writes the bill of sale, the buyer or the seller?
Either. It is usually the seller, because the seller is making the statements (ownership, no liens, mileage). Both should read it before signing.
Do I need a lawyer?
Not for a normal private sale of a car, boat or personal item. Consider one for high-value sales, business assets, sales with complex financing, or anything involving real estate.
How long should I keep a bill of sale?
At least until the buyer has registered the vehicle and any sales tax questions are settled; many people keep it for three years or more, the usual window for tax audits.