With so many bill of sale forms out there, it can be difficult to know what you really need. There are a few considerations to keep in mind. Here is what I think you should generally look for in a bill of sale to help better protect yourself.

Does Your State Require a Bill of Sale

A bill of sale is a contract for the sale of a motor vehicle. A Bill of Sale provides some level of protection against potential fraud as it requires certain information (although, it should be noted that a bill of sale is not a full-proof way of stopping fraud). Some state laws try to protect/benefit the public by requiring a bill of sale when a motor vehicle has been sold.

How do states define what a motor vehicle is? A motor vehicle includes what most of us think of when we hear motor vehicle e.g., cars, trucks, SUVs. Every state has its own definition and some states varying slightly. A motorcycle is also generally included in that definition of motor vehicle. In some states, farm equipment is considered to be a motor vehicle and will require a bill of sale. In other states farm equipment is not included in that definition. Mobile homes are not considered motor vehicles because a mobile home is regarded as more home than vehicle.

Whether the motor vehicle is running or not is irrelevant. Just because it has the potential to be moved does not mean that it is a motor vehicle under a state’s definition. For most situations, what a motor vehicle will be pretty clear. If you are unsure if what you are dealing with a motor vehicle in your jurisdiction, you should consult your local rules.

Even if your state does not require a bill of sale, you should strongly consider entering into a bill of sale. The reason is that the logic behind the law of requiring a bill of sale can be easily applied to the states that do not require a bill of sale. There is no state law that will prevent you from entering into a bill of sale in a state that does not require a bill of sale. Take advantage of what other states offer by entering into a bill of sale.

If your state requires a bill of sale, then you must follow those rules. Our forms comply with your state’s laws.

All Bill of Sales Should Include a VIN

A Vehicle Identification Number (VIN) is a number that is on every vehicle. The VIN can, generally, be found on the driver’s side dashboard just beneath the windshield. The VIN must also be on the title that is being transferred. The VIN is issued by the government as a way of adding a layer in protecting against the public against theft and fraud.

Your vehicle must have a valid VIN. If a VIN has been scratched out or removed from the dashboard, you should strongly consider not purchasing the vehicle. If you do buy the vehicle with these issues, you are asking for trouble. There is almost no excuse for why a VIN should be scratched out and still be legal (I could not find one legitimate reason in my research). A VIN that has been tampered with in any way is a sign that the vehicle is illegal in some way or form. It may be that the vehicle is stolen. It doesn’t mean for certain that it is stolen, but it s a really strong sign.

If you should purchase a vehicle with the VIN scratched out or that is altered in any way, you might become criminally liable yourself for dealing in stolen property. Even if you did not know that the vehicle was stolen, the fact that the VIN was scratched out or destroyed can possibly used against you in a court of law.

My general recommendation (not legal advice, let’s get that straight!) is that if the price of the vehicle is too good to be true and there is a tampered VIN, walk away and find yourself another vehicle.

With that being said, if you see a VIN and it matches the title, then chances are great that everything in is on the legitimate side. Most people who own a vehicle don’t know what a VIN is or where it is on the vehicle. If you are unsure about the authenticity of the VIN, you can run a check at your state’s DMV office before the sale/purchase of the vehicle to better protect yourself.

Include Common Description Information

A bill of sale should describe the vehicle. Vehicles are built on assembly lines so most vehicles look and are almost indistinguishable from any other vehicle of its kind. These days, though, there are enough car manufactures, models, and years, to help significantly narrow the type of vehicle that is being transacted.

When writing a description, it is easy to start with the common descriptors, such as make, model, year, color (interior and exterior), number of doors, size of the engine, and if it is a special editions. This is where I would start in describing the vehicle.

Include Unique Identifiers

Especially if you are dealing with a used car, you should include any unique characteristics that the vehicle may have acquired. Are there any dents? Is there a big scratch mark that runs the length of the vehicle? Is the paint faded or chipped? Are there any rust issues? Is there a CD player? Anything that makes the vehicle identifiable should be on the bill of sale.

The more identifiers you can put on the bill of sale, the better.

Sign, Date, and Contact Information of Both the Buyer and Seller

It should go without saying that the buyer and seller should both sign and date the bill of sale. The signing by the parties must state that each party is agreeing to terms of the bill of sale, what each party is getting out of the sale (generally this will mean that one party is paying and the other party is accepting payment in exchange for transferring the motor vehicle to the other party), and that each party is acting in good faith - not knowingly making any false statements or omissions to the other party’s detriment.

Generally, a bill of sale is not required to be notarized; however, if you feel you need to have the bill of sale notarized, you can certainly do that. Most banks have a notary public and can assist with this.

(A notary public is someone authorized by the state to check government issued identifications against a name and address that appears on a document, and then the notary public will witness as the person whose identification has been checked signs the document. The notary public will do this for all of the parties that sign and then will sign, date, and provide their own notary public seal on the document.)

Buying a motor vehicle is a big deal. It is one of the most expensive things that most of us buy in our lifetime. For that reason, when buying or selling a motor vehicle, you should buy and sell from someone that can be contacted. You should include such information as phone numbers, address, and legal names. If at all possible, check the address and name against a government issued identification such as a driver’s license.

There are some variations as to what is required in a bill of sale, so check your local rules, but this is, for the most part what should be included in your bill of sale.



This blog entry was written by Sanket Mistry.

Sanket Mistry, J.D., M.I.A.      Sanket Mistry is the founder and CEO of Peerless Legal and blogs regularly. He has written numerous books including, "25 Estate Planning Forms," "8 Living Trust Forms," "Simple Will Creator," "Give Through a Will & Living Trust," and "Guidance On Creating Your Own Will & Power of Attorney," and the bestselling books in the Legal Self-Help Guide series, "Will, Trust, & Power of Attorney Creator and Estate Records Organizer" and "Estate Planning in Plain-English." He earned his JD from the Walter F. George School of Law at Mercer University and is a member of the New York State Bar. He has worked, and volunteered, at a number of nonprofits, government agencies, and for-profit corporations. He also holds a BA in philosophy from Emory University and a MIA from Columbia University. He is an avid traveler and tennis player.