How to Write a Bill of Sale for Vehicles, Boats & Property

A bill of sale is the legal bridge between ownership transfer and title registration. Without it, you can’t register a vehicle at the DMV. Without it, the seller remains liable for tickets, accidents, and taxes after the sale. Yet most people don’t realize they need one until they’re at the DMV counter, being turned away.

The difference between a valid bill of sale and an invalid one often comes down to a single missing element: the VIN, the date, or a signature. This guide covers exactly what you need to create a legally compliant bill of sale that protects both parties and satisfies state DMV requirements.

What Makes a Bill of Sale Legally Valid?

A bill of sale must contain specific elements to be legally enforceable. Missing even one can invalidate the document or create liability issues later.

Essential Elements (All 50 States)

Every bill of sale must include:

Element	Purpose	Example
Seller Information	Identifies who is transferring ownership	Full legal name and complete address
Buyer Information	Identifies who is receiving ownership	Full legal name and complete address
Item Description	Specifies exactly what is being sold	For vehicles: Year, Make, Model, VIN
Sale Price	Documents the transaction value for tax purposes	$15,000 (not “$15k” or “fifteen thousand”)
Date of Sale	Establishes when ownership transferred	January 3, 2026
Signatures	Makes the contract legally binding	Both parties must sign and date

Vehicle-Specific Requirements

For cars, trucks, motorcycles, boats, and RVs, you need additional details:

Cars, Trucks, SUVs:

17-character VIN (Vehicle Identification Number)
Odometer reading (federal requirement for vehicles under 10 years old)
Make, model, year
Color (recommended but not always required)

Boats and Watercraft:

12-character HIN (Hull Identification Number)
Boat registration number or Coast Guard documentation number
Length and hull material (for registration purposes)

Motorcycles and ATVs:

17-character VIN (usually stamped on frame neck)
Engine size (cc)
Some states require separate forms for off-road vehicles

RVs, Motorhomes, Trailers:

Separate VINs for chassis and living quarters may exist
Check if state requires manufacturer’s certificate of origin
Utility trailers may have different requirements than travel trailers

The VIN: Your Most Critical Detail

The Vehicle Identification Number is a 17-character code that uniquely identifies every vehicle manufactured since 1981. It is the fingerprint of the vehicle.

VIN Format Rules:

Exactly 17 characters (letters and numbers)
Never contains the letters I, O, or Q (to avoid confusion with 1 and 0)
Position 9 is a check digit that mathematically validates the VIN
Positions 1-3 identify the manufacturer (e.g., 1HG = Honda USA)
Position 10 indicates the model year

Where to find the VIN:

Dashboard on driver’s side (visible through windshield)
Driver’s side door jamb sticker
Vehicle title and registration
Insurance documents

Before buying a vehicle, verify:

VIN on dashboard matches the VIN on the title
VIN hasn’t been altered or tampered with
Run a vehicle history report (Carfax, AutoCheck, or NMVTIS) using the VIN to check for:
- Outstanding liens (you can’t get a clear title if a lien exists)
- Accident history
- Flood damage or salvage title
- Odometer rollback fraud
- Theft records

State-Specific Requirements That Can Invalidate Your Bill of Sale

What works in California might be rejected in Louisiana. Each state has unique requirements for bills of sale, and failing to meet them can delay or prevent title transfer.

Notarization Requirements

Six states require bills of sale to be notarized by a licensed notary public:

State	Notary Required	Title Transfer Deadline
Louisiana	Yes	30 days
Maryland	Yes	30 days
Montana	Yes	60 days
New Hampshire	Yes	10 days
Ohio	Yes	30 days
West Virginia	Yes	30 days

What notarization means: A notary public verifies the identities of both parties, watches them sign the document, and stamps it with an official seal. You can find notaries at banks, UPS stores, law offices, and some DMV locations. The cost is typically $5-15 per signature.

If you skip notarization in these states: The DMV will reject your title transfer application, and you’ll have to redo the bill of sale with both parties present at a notary.

Witness Requirements

Two states require witness signatures in addition to buyer and seller signatures:

State	Witnesses Required
Arizona	1 witness
Florida	2 witnesses

Who can be a witness: Any adult who isn’t a party to the transaction. Witnesses must be present when the buyer and seller sign, and must sign the document themselves.

Why witnesses matter: They provide third-party verification that the transaction occurred and that both parties signed willingly. In disputes, witnesses can testify about the circumstances of the sale.

Title Transfer Deadlines

Most states require you to transfer the title within a specific timeframe. Miss the deadline, and you may face penalties:

State	Deadline	Late Penalty
Arizona	15 days	$8 + $4 per month late
California	10 days	Up to $125
Florida	30 days	$20-500 depending on lateness
New Hampshire	10 days	$50
Texas	30 days	$25 + $25/month up to $250

Why this matters for sellers: Until the title is transferred, you’re the legal owner. If the buyer gets into an accident, racks up parking tickets, or abandons the vehicle, you can be held liable. Always complete a Notice of Release of Liability with your state DMV immediately after the sale to protect yourself.

Federal Odometer Disclosure Law

Federal law (49 CFR 580) requires odometer disclosure for all vehicles less than 10 years old, with limited exceptions (vehicles over 16,000 pounds, motorcycles, etc.).

Odometer disclosure must include:

The odometer reading at the time of sale (in miles)
A statement that the reading reflects actual mileage
Seller’s certification that the reading is accurate to the best of their knowledge
OR a statement that the odometer reading exceeds mechanical limits
OR a disclosure that the reading is NOT actual mileage (a warning flag)

Penalties for odometer fraud: Federal odometer tampering is a felony punishable by up to 3 years in prison and fines up to $1,000,000. State penalties vary but are similarly severe. Always disclose accurate mileage.

How to Write a Bill of Sale: Step-by-Step

Step 1: Choose the Right Template

Using a template ensures you don’t miss required elements. Generic “one-size-fits-all” templates often lack state-specific language and can be rejected by the DMV.

Template options:

State DMV official forms (download from your state DMV website)
Our free bill of sale generator (automatically includes state requirements)
Generic legal templates (verify they meet your state’s requirements)

Red flags in bad templates:

No space for VIN or odometer reading
No signature lines
No date field
No state-specific language about warranties or as-is sales

Step 2: Gather Required Information

Before filling out the form, collect:

Seller side:

Full legal name (as it appears on the title)
Complete street address, city, state, ZIP
Driver’s license number (some states require this)

Buyer side:

Full legal name
Complete street address, city, state, ZIP
Driver’s license number (for DMV records)

Vehicle information:

Current title (verify all information against it)
VIN (verify it matches the title)
Odometer reading (take a photo of the odometer for your records)
License plate number (some states require this)

Step 3: Complete the Document Accurately

Use these formatting rules to avoid rejection:

Field	Correct Format	Wrong Format
Sale Price	$15,000.00 or “Fifteen thousand dollars ($15,000.00)“	$15k, 15000, “about $15,000”
Date	January 3, 2026	1/3/26, 01/03/2026
VIN	1HGBH41JXMN109186 (all caps, no spaces)	1hgbh41jxmn109186, broken across lines
Odometer	87,543 miles	~87k miles, approximately 87,543
Names	Full legal name matching ID	Nickname, initials only

Special characters to avoid:

Don’t use abbreviations for addresses (“St.” should be “Street”)
Don’t use P.O. boxes unless that’s your legal address
Don’t cross out or white-out errors (use a new form instead)

As-Is vs. Warranty Language:

Most private party sales are “as-is,” meaning the seller makes no guarantees about the condition of the vehicle. This must be explicitly stated:

As-Is clause example:

“This vehicle is sold AS-IS, WHERE-IS, with no warranties expressed or implied. The buyer accepts the vehicle in its current condition and assumes all responsibility for its condition and operation from this date forward. The seller makes no representations about the vehicle’s mechanical condition, safety, or fitness for any particular purpose.”

Warranty clause example (less common in private sales):

“The seller warrants that the engine and transmission are in good working condition for a period of 30 days from the date of sale. If either component fails due to defects existing at the time of sale, the seller will repair or reimburse the buyer for repair costs up to $500.”

Correct signing sequence:

Both parties review the completed document - Check for errors before signing. Corrections after signatures may invalidate the document.
Seller signs first - This confirms the seller’s agreement to transfer ownership.
Buyer signs second - This confirms the buyer’s acceptance of the terms and condition.
Witnesses sign (if required by state) - Witnesses must see both parties sign before they add their own signatures.
Notary stamps and signs (if required by state) - Notary verifies IDs and watches all parties sign.

Important: Both parties should sign in the presence of each other or a notary. Never sign a blank bill of sale and mail it to someone else to fill in later.

Step 5: Make Multiple Copies

Before anyone leaves the transaction:

Make at least 3 copies of the signed bill of sale (more if witnesses or notary are involved)
Seller keeps one copy for tax records and liability protection
Buyer keeps one copy for DMV title transfer
Additional copy for your records (scan or photograph it)

Digital backups: Take a clear photo or scan of the signed document and store it securely. If the paper copy is lost, you have a backup for disputes or tax purposes.

Common Mistakes That Invalidate Bills of Sale

Missing or Incorrect VIN

Mistake: VIN has a typo, is missing digits, or contains letters I, O, Q.

Consequence: DMV will reject the title transfer. You’ll need both parties to sign a corrected bill of sale.

Prevention: Double-check the VIN against the title and dashboard VIN plate. Use a VIN decoder to verify the check digit (position 9) is mathematically correct.

No Odometer Disclosure (When Required)

Mistake: Vehicle is 8 years old, but seller doesn’t include odometer reading.

Consequence: DMV will reject the title transfer and may report the seller for non-compliance with federal law.

Prevention: Always include odometer disclosure for vehicles less than 10 years old. Even if your state doesn’t require it, federal law does.

Selling a Vehicle with a Lien

Mistake: Seller has an outstanding loan on the vehicle but doesn’t disclose it.

Consequence: The buyer can’t get a clear title until the lien is satisfied. The lender owns the vehicle, not the seller, until the loan is paid off.

Prevention:

Before selling, pay off the loan and obtain a lien release from the lender
OR arrange for the buyer to pay the lender directly, with the excess going to the seller
Always disclose any liens upfront

How buyers can check for liens:

Run a vehicle history report (Carfax, NMVTIS)
Check with the state DMV for lien records
Look at the title: if it says “Lienholder” or has a bank name, there’s a lien

Using “Gift” Language to Avoid Taxes

Mistake: Seller and buyer agree to list the sale price as “$1” or “gift” to avoid paying sales tax.

Consequence: This is tax fraud and can result in:

Back taxes plus penalties and interest
Criminal charges for tax evasion
Title transfer rejection if DMV suspects fraud (they compare sale price to vehicle value)

Reality: Most states use the vehicle’s fair market value for tax purposes, not the stated sale price. Even if you write “$1,” the DMV will assess taxes based on the vehicle’s actual value from their database.

Verbal Agreements Without Documentation

Mistake: Seller verbally promises the transmission was just rebuilt, but it’s not in the bill of sale.

Consequence: Buyer has no legal recourse if the transmission fails. Verbal agreements are difficult to enforce in court.

Prevention: If the seller makes any promises about condition, repairs, or warranties, put them in writing on the bill of sale. If the seller refuses, walk away from the deal.

Not Completing a Release of Liability

Mistake: Seller hands over the keys and title but doesn’t file a Notice of Release of Liability with the DMV.

Consequence: If the buyer doesn’t transfer the title immediately, the seller can receive:

Parking tickets and red light camera tickets
Towing and impound fees
Liability for accidents caused by the buyer
Personal property taxes on a vehicle they no longer own

Prevention: Within 24 hours of the sale, file a Release of Liability with your state DMV. Most states allow online filing. Keep the confirmation number.

As-Is Sales vs. Warranty: Legal Implications

Most private party vehicle sales are “as-is,” but the legal consequences differ significantly from warranty sales.

As-Is Sales (Most Common)

What it means: The vehicle is sold in its current condition, with all faults, known and unknown. The buyer accepts all risk.

Seller’s obligations:

Disclose known defects (the “as-is” clause doesn’t allow fraud)
Provide a clear title
Accurately represent the vehicle (year, make, model, VIN, mileage)

Seller is NOT obligated to:

Make repairs
Guarantee the vehicle will run after the sale
Provide a warranty or return policy

Buyer’s protections:

Right to inspect the vehicle before purchase
Right to have a mechanic inspect it (recommended for high-value purchases)
Can walk away if inspection reveals problems

State exceptions:

Massachusetts requires vehicles to pass safety and emissions inspections before sale
Some states prohibit “as-is” sales for dealer transactions
Federal lemon laws don’t apply to private sales

Recommended language for as-is sales:

“SOLD AS-IS: This vehicle is sold in its current condition. The seller makes no warranties, express or implied, regarding its condition, safety, or fitness for any purpose. The buyer has inspected the vehicle and accepts it in its current state. The buyer releases the seller from all liability for defects, repairs, or conditions of the vehicle after the sale.”

Warranty Sales (Less Common in Private Sales)

If the seller provides a warranty, they remain liable for covered defects during the warranty period.

Types of warranties:

30-day powertrain warranty: Covers engine, transmission, drivetrain
90-day mechanical warranty: Covers all mechanical systems
1-year limited warranty: Covers specific components listed in the warranty

Warranty must specify:

What is covered (e.g., “engine and transmission”)
What is NOT covered (e.g., “wear items like brake pads and tires”)
Duration of coverage (e.g., “30 days from date of sale”)
Remedy if defects are found (e.g., “seller will repair at their expense” or “buyer will be reimbursed up to $500”)

Seller’s obligations with warranty:

Pay for covered repairs during the warranty period
Use reasonable efforts to fix defects
Provide receipts for repairs if requested

Risks for sellers providing warranties:

Unexpected repair costs can exceed the sale price
Buyer may claim defects that don’t qualify for warranty
Difficult to prove whether defect existed at time of sale or occurred after

When sellers should consider a warranty:

Vehicle is in excellent condition and recently serviced
Seller is a mechanic or dealership with repair capabilities
Buyer is willing to pay a premium for peace of mind

When You Need a Bill of Sale (And When You Don’t)

Always Required

Vehicle sales (cars, trucks, motorcycles, boats, RVs):

Private party sales
DMV title transfers
Insurance claims for totaled vehicles
Estate settlements

High-value property sales:

Electronics over $500
Jewelry
Collectibles and antiques
Livestock and horses

Usually Required

General property:

Furniture
Appliances
Tools and equipment
Business assets

Not Typically Required

Low-value items:

Garage sale items under $100
Gifts between family members (though a gift letter may be needed for tax purposes)
Donations to charity

Gift Transfers

If you’re giving a vehicle as a gift (no money changes hands), you still need a bill of sale, but it’s called a “Gift Letter” or “Gift Affidavit” in most states.

Gift letter requirements:

States the vehicle is a gift with no payment
Identifies the donor and recipient
Includes VIN and vehicle description
May require a statement of relationship (e.g., “father to son”)
Often requires notarization

Gift tax implications:

Federal gift tax applies to gifts over $18,000 (2024 limit)
Donor is responsible for gift tax, not recipient
Most family vehicle gifts are under the limit and not taxed

Pro Tips for a Smooth Transaction

Run a Vehicle History Report Before Buying

Before you hand over cash, spend $40 on a vehicle history report from:

Carfax: Best for accident history and service records
AutoCheck: Better for auction history and total loss records
NMVTIS (National Motor Vehicle Title Information System): Government database, checks for title brands and theft

Red flags in reports:

Salvage title, flood damage, or rebuilt title
Odometer rollback (mileage decreased between reports)
Multiple owners in a short period (possible lemon)
Severe accident with frame damage
Outstanding recalls that haven’t been fixed

Get a Pre-Purchase Inspection

For vehicles over $5,000, pay a mechanic $100-200 to inspect it before you buy. They’ll check:

Engine compression and leaks
Transmission condition
Brakes and suspension
Undercarriage for rust and damage
Frame for accident damage

If the seller refuses an inspection: Walk away. This is a huge red flag.

Meet at the DMV or a Notary Office

For safety and convenience, complete the transaction at:

The DMV (you can transfer the title immediately)
A notary’s office (required in some states)
A bank (for payment verification and notary access)

Avoid meeting at:

Seller’s home (safety risk for large cash transactions)
Parking lots (no witnesses, no notary, no security cameras)

Use Secure Payment Methods

For high-value sales, never use cash or personal checks.

Payment Method	Pros	Cons
Cashier’s Check	Bank-guaranteed, secure	Can be forged (verify at issuing bank)
Bank Wire Transfer	Instant, irreversible	Fees apply, requires bank visit
Escrow Service	Third-party holds funds until title transfers	Fees, slower transaction
Cash	Instant, no fees	Unsafe for large amounts, no record

If using a cashier’s check:

Meet the buyer at their bank
Watch them purchase the check from the teller
Never accept a cashier’s check via mail (common scam)

Document Everything with Photos

Before the buyer drives away, take photos of:

The odometer reading
The VIN plate on the dashboard
The vehicle’s exterior (all angles)
Any damage or wear noted in the bill of sale
The buyer’s driver’s license (with their permission)

Store these photos with your copy of the bill of sale. They’re evidence if disputes arise.

File a Release of Liability Immediately

Within 24 hours of the sale, file a Notice of Release of Liability with your state DMV. This removes you from liability for:

Parking tickets and traffic violations
Accidents
Tolls and red light cameras
Personal property taxes

How to file:

Online through your state DMV website (fastest)
By mail using a release of liability form
In person at a DMV office

Keep the confirmation number. If you receive tickets or notices after the sale, you’ll need proof you filed the release.

Keep Records for Tax Purposes

Sellers: The bill of sale is proof of income for capital gains purposes. If you sold a vehicle for more than you paid, you may owe taxes on the gain. Keep the bill of sale and the original purchase documents for at least 7 years.

Buyers: The bill of sale proves the sale price for sales tax purposes and is part of your cost basis if you later sell the vehicle. Keep it with your title and registration.

Frequently Asked Questions

Can I use the same bill of sale form for all 50 states?

Mostly yes, but six states (Louisiana, Maryland, Montana, New Hampshire, Ohio, West Virginia) require notarization, and two states (Arizona, Florida) require witnesses. Our bill of sale generator automatically includes these state-specific requirements based on the seller’s state. Always verify with your local DMV, as some states provide their own official forms that may be required instead of or in addition to a generic bill of sale.

What if the buyer doesn’t transfer the title after I sell the vehicle?

File a Notice of Release of Liability with your state DMV immediately. This legally removes you from ownership and liability. If you receive tickets or towing notices after the sale, provide your copy of the bill of sale and the release of liability confirmation to contest them. If the buyer still doesn’t transfer the title, you may need to report the sale to the DMV and potentially initiate an “abandoned vehicle” process to force the title transfer.

Is a handwritten bill of sale legally valid?

Yes, as long as it contains all required information: buyer and seller names and addresses, vehicle description (year, make, model, VIN), sale price, date, and signatures. However, handwritten bills of sale are harder to read, more prone to errors, and can be disputed more easily than typed or printed documents. For high-value transactions, use a typed template to avoid ambiguity.

What if the vehicle has a lien or outstanding loan?

The seller can’t transfer a clear title until the lien is satisfied. Options include: the seller pays off the loan before the sale and obtains a lien release, the buyer pays the lender directly (lender provides payoff amount, buyer pays lender, excess goes to seller), or the buyer and seller meet at the lender’s office to complete the transaction and lien release simultaneously. Never purchase a vehicle with an undisclosed lien. Check for liens using the VIN through Carfax, NMVTIS, or your state DMV before completing the purchase. For boats, check with the Coast Guard or state marine agency.

Do I need a bill of sale for a gift?

Yes, but it’s usually called a “Gift Letter” or “Gift Affidavit.” It must state that the vehicle is a gift with no payment, identify the donor and recipient, include the VIN and vehicle description, and may require a statement of relationship (e.g., “mother to daughter”). Most states require notarization for gift transfers. The recipient still needs to transfer the title at the DMV, and sales tax may apply depending on state law (some states exempt family gifts).

Can I write “$1” as the sale price to avoid taxes?

Technically yes, but it’s usually ineffective and potentially illegal. Most states assess sales tax based on the vehicle’s fair market value from their database, not the stated sale price. If you write “$1” for a vehicle worth $15,000, the DMV will charge tax on $15,000 anyway. Some states consider this tax fraud and may penalize you. The only legitimate use of “$1” is for intrafamily transfers in states that allow nominal consideration for gifts, and even then, a gift affidavit is often required instead.

What happens if I discover a defect after an as-is sale?

In most cases, you have no recourse. “As-is” means you accepted the vehicle in its current condition, with all faults. However, there are exceptions: if the seller knowingly concealed a major defect (fraud), you may be able to sue; some states have implied warranty protections even for as-is sales if the defect existed at the time of sale; and if the seller made specific promises in writing, those may be enforceable. This is why pre-purchase inspections are critical for used vehicle purchases. If a major defect is discovered within days of the sale, consult an attorney about your state’s consumer protection laws.

Use Our Free Bill of Sale Generator

Creating a legally compliant bill of sale doesn’t have to be complicated. Our Free Bill of Sale Generator automatically includes state-specific requirements like notarization, witness signatures, and odometer disclosures. Just fill in the details, and download a professional PDF ready for the DMV. No signup, no watermarks, 100% free.