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Guide to Using a Bill of Sale – Who? When? Why?

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Buying a used vehicle, such as a car or motorcycle, is a standard affair today. Why pay a commission to a dealer if you can look for customers online and complete a quick private deal without extra expenditures? It is easy to perform the task, but to be on the safe side, you should take care of the documentation. While a private deal is legal in the USA, there is still a need to tax the sale and report the item’s ownership to relevant authorities. Besides, you’ll probably sleep better at night if you know that all legal issues have been settled. 

One of the ways to stipulate and notarize a private deal is a bill of sale. Not all states require its use in personal sales (e.g., in Tennessee, Alaska, Illinois, and several more locations), while in several states, a bill of sale is mandatory. Regardless of the area in which you plan to sell your item, having a document clarifying all vital details of the deal is always a plus. So, download a bill of sale template online (Formspal’s BoS template should be a good fit) and complete it by filling out all the required fields.. To understand what this document is and how to use it properly, continue reading our guide. 


A rule of thumb is for the seller to take care of the bill of sale on the deal’s day. If you’re selling a vehicle or another item of value, please make sure to print out or write a bill of sale in advance, giving it to the buyer for double-checking all the data and signing it. 

Though the seller prepares a bill of sale, the document still needs to be completed by both parties of the transaction. The buyer indicates their name, address, and other contact information and double-checks the price stated in the bill of sale. Some essential details about the vehicle’s condition at the moment of transfer are also indicated in the bill of sale (optionally), so it is the buyer’s task to double-check whether the transferred item indeed corresponds to the stated condition. 

The completion of a bill of sale typically requires two parties – the buyer and the seller. However, in some states, for this document to take force, it needs to be notarized. So, if you’re selling/buying a vehicle in Louisiana, Nebraska, Montana, Maryland, or West Virginia, you’ll need the assistance of the notary public as well. Attend a notary, let them double-check your identities and the data indicated in the bill of sale, sealing the deal officially afterward. 


The bill of sale is signed on the date of ownership transfer. This means that after you sign the bill of sale and get the money for your item, you’re no longer its owner. You cannot use the vehicle or property item and have to proceed to its physical transfer immediately after all the formalities are over. Money transfer for the purchase should also be undertaken when filling out and signing a bill of sale. 


Now that the procedure of completing a bill of sale is clear, let’s get back to basics. Why would you need such a document if the deal is private? This document can serve you a good favor in many situations: 

Suppose the buyer breaks the vehicle and wants their money back. In that case, you have a legal document proving your vehicle’s transfer in the “as-is” condition and the absence of any repair or maintenance obligations. 

Suppose the vehicle is stolen, and the buyer wants their money back. In that case, you have legal proof of the transfer of ownership and the absence of any legal responsibility for the item’s integrity. 

If your buyer reports an incorrect sale price and has problems with taxation agencies (or you have any trouble), you have a document stipulating the fair price paid for the transferred item. 

State agencies have official, publicly accessible data on the vehicle’s ownership chain, thus locating the item’s owner at any point in time. 

As you can see, the bill of sale can become your valuable assistant in many potential legal situations, proving that the deal was done in compliance with the law and that you’re no longer the item’s owner.  

Components of a Bill of Sale 

Here are some points to include in a bill of sale: 

Indicate the date of the deal

Write down the names and addresses of the seller and buyer 

Indicate the price paid for the item in question

Describe the transferred asset and its as-is condition 

Stipulate any types of warranties available for the sold/bought item 

Sign the bill of sale and let the other party of the deal sign it as well 

Have your bill of sale notarized (optional in most states) 

As for the sale object, it’s better to include as much information as possible about it. The bare minimum is the type of vehicle, its VIN, odometer reading results, the year of its manufacture, its model, and all serial numbers available (VIN, registration number, engine serial number, and hull number – whatever applies to your item). 

With this guide, you’re now better positioned for organizing a private deal in line with legal requirements and for better comfort and protection for both parties. Use a bill of sale to preserve peace of mind, knowing that all stakeholders’ rights and interests are protected.  


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