How do I Create a Bill of Sale?

Lori Smith

A bill of sale is most commonly used when personal property, such as a vehicle, is sold to another individual. For clarity, it is best to create this document on a computer as opposed to handwritten agreement. The bill of sale should include the full name, address and phone number of both the buyer and the seller involved in the transaction. The date of the agreement, the purchase price, and any identifying numbers for the sold item should be clearly indicated on the form as well. Then, both parties must sign it in order for the paperwork to be complete.

A bill of sale is most commonly used when personal property, such as a vehicle, is sold to another individual.
A bill of sale is most commonly used when personal property, such as a vehicle, is sold to another individual.

Be sure to include the date of the transaction on the bill of sale. Clearly delineate the names of the buyer and seller, as well as the purchase price of the item. If you are selling a vehicle, be sure to include the year, make and model of the car. Additionally, when applicable, the vehicle identification number (VIN) and the current mileage should be written on the bill of sale. Otherwise, an item's serial number and description should be sufficient.

It is a good idea to notate the terms of the agreement. Private sellers may offer a limited guarantee, for example, or simply sell the item "as is," disavowing any responsibility to make repairs, even if they're currently required. Any verbal agreements and understandings about they property's condition, and the buyer's remedy in case extensive repairs are needed, should be put in writing. Failure to record specific terms on the bill of sale can lead to misunderstandings later on.

Once the bill of sale has been written, two copies should be printed. Both parties should sign each one. This way, the buyer has an original copy and the seller has one as well.

Bills of sale should be kept in a safe place. If they are created for car purchases, the buyer should not keep his copy in the vehicle. A location within in his home, or a safe deposit box, is a better place to store the document.

Accurate information is very important. For example, an auto tag agency representative in the United States may refer to the purchase price noted on either the bill of sale, or the title, to calculate sales tax. You may end up paying too much or too little to the agency if the former is used to calculate it.

Regardless of how the document is used, it is important to keep on hand. It serves as proof of purchase, not only for a car, but also for any item purchased from a private seller. Essentially, this is your receipt to prove that the transaction took place and that both parties agree to the terms as written in the document.

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Discussion Comments


I remember when my son earned enough money from his first job to buy a used car. He did everything right with the seller except get a bill of sale. He had to go back to the man and get him to fill out a vehicle bill of sale. Since the man was a professional car dealer, he happened to have a bill of sale form ready to go. My son just forgot to ask for it before he jumped behind the wheel of his "new" car.


I bought a motorized scooter from an old farmer one time, and he said I would need a bill of sale in order to get it licensed for street use. He just took out a pen and wrote out all of the details of the sale on a piece of scrap cardboard he found. I thought he was joking, since I thought I would need a notarized bill of sale form or something equally formal. He laughed and said the county licensing department didn't really care what the bill of sale looked like.

Sure enough, when I took this piece of cardboard to a clerk at the courthouse license office, she just transferred all of the pertinent information to a computer file and sold me a license plate for the scooter. As long as it was signed and contained the sales information, it was a legal document.

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