A bill of sale refers to a legally binding document which confirms that you actually bought that vehicle from a private entity or party. The bill of sale is not a form of title, but you could use it to obtain the vehicle's title from the DMV.
Both the buyer and seller should receive copies of the bill of sale form. It's important for the buyer to keep the bill of sale with the title of the vehicle for registration and licensing purposes, if necessary. However, all parties should keep them for their own personal records.
The Easy Way to Buy a Car from a Private Seller
- Don't Rush When Buying a Used Car.
- Research the Car's History.
- Always Buy a Used Car with a Real Title.
- Check the Vehicle's Title for Liens.
- Consider Using an Escrow Service.
- Review State Laws When Buying a Car from a Private Seller.
- Get a Car Insurance Policy Before Driving Off.
A California Bill of Sale must include both a buyer's and a seller's disclosure. They must be read. If the parties agree to the sale, the document must be signed, witnessed, and notarized. The date of the signatures should also be listed.
For any piece of legislation, here is a general checklist of things to make sure you do:
- The date should be the day you submit the bill.
- In the author line, name all individuals involved in writing the bill and their office.
- Title the bill (in all-caps) with what you want the bill to do.
What does consideration mean? The consideration is the value that the Purchaser transfers to the Seller in exchange for the goods being sold to the Purchaser. If you wish to transfer property for no consideration then you should consider using a quitclaim deed instead of a bill of sale or sales agreement.
Sign two copies of the bill of sale, one for you and one for the other party. Although not strictly required, consider bringing a third party with you when the bill of sale is signed. If questions arise about the sale, that person can serve as a reporter of the transaction.
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Most states do not require a notary to witness the signing of a bill of sale. However, by law, a notary public must witness both parties signing the document in Louisiana, Nebraska, Maryland, New Hampshire, West Virginia, and Montana. Notaries are optional in other states.
For the buyer, the bill of sale is a record of the transaction. While there are no universal formats or rules for what a bill of sale should look like, the document should include the names of the seller and buyer, a description of the item being sold, and the date of the sale.
Do's
- Before seeing the car, look up the fair market value of the vehicle using Kelley Blue Book.
- Ask the seller for the mileage on the car so you can do your research.
- Ask the seller for service records.
- Check the registration.
- Deal with local sellers, if possible.
- Check the VIN on the car against the paperwork.
If you do have to pay taxes on your gifted vehicle, the state uses the vehicle's fair market value to calculate the amount you have to pay. While some car owners consider selling the car for a dollar instead of gifting it, the DMV gift car process is the recommended, not to mention more legitimate, way to go.
When charged as a misdemeanor, you would face up to one year in county jail and/or up to a $1,000 fine. If you are charged with a felony offense, you face up to three years in state prison or a fine of up to $10,000, or both.
1 attorney answerYou should not sign anything before you get your money. If the buyer says the buyer would be back later with your money and you sign the title over to the buyer, you likely will never see your money
Here's how:
- Complete the bill of sale. If the car is sold as is, then the bill of sale should show that.
- Sign over the title. Once you and the buyer complete and sign the title transfer, you'll hand over the title to the new owner.
- Fill out the release of liability form.
- Hand over the keys.
A bill of sale for a car is a legal document that confirms the sale and transfer of possession of a motor vehicle. It usually contains the personal information of the buyer and seller, a description of the vehicle, and a statement of the price and terms of sale. Typically, the seller drafts the bill.
In simple terms, a bill of sale agreement is nothing more than a contract for the purchase of a vehicle between a buyer and a seller. In most cases, the contract is legally binding between buyer and seller as long as the bill of sale follows guidelines required in the state where the sale or transfer takes place.
A seller could have the original title and then get a duplicate title for a few bucks, if say, the title was lost. A seller could sell the vehicle and provide the buyer with the original title, which would actually be invalid once the duplicate title was issued.)
Is a bill of sale required in California? While a bill of sale is not a legal requirement in California, it's a good idea to have one if you sell or purchase a vehicle. There is no specific form required, but the California Department of Motor Vehicles (DMV) has a bill of sale form.
When writing a bill of sale, be sure to include:
- The seller's name and address.
- The buyer's name and address.
- A description of the item being sold, including serial numbers, identification numbers, make, model, size, color, design, any distinguishing marks, features or faults [source: Cooper].
