You must protect your interests whenever you buy or sell something like a car or motorboat. This is because disputes and misunderstandings can arise after the transaction, and you can be liable for a mistake you never made.
A bill of sale agreement is one of the documents you will need to protect yourself or your business. Please keep reading to learn more about this document, including whether it should be notarized
What is a Bill of Sale?
A bill of sale is also referred to as proof of purchase. It is a legal document used to transfer the ownership of items, assets, or objects like cars and boats. Note that a bill of sale can take different forms, such as a purchase receipt and a promissory note.
In addition, different US states have varied requirements regarding bill of sale agreements. For instance, some states like Wyoming require a seller or buyer of a car or boat to have a notarized bill of sale.
Vehicle Bill of Sale
It is essential to note that a bill of sale isn’t a requirement in all US states. Illinois and Tennessee are perfect examples that don’t require a vehicle bill of sale. A bill of sale doesn’t necessarily prove ownership, but it is a requirement in some states when transferring ownership.
When preparing your paperwork, you will likely include it. The document has details like vehicle type, name of the previous owner, make and model of the car, engine serial number, vehicle registration number, and more.
What is Included in a Bill of Sale?
Here are essential details that are included in a bill of sale;
-
Names of the seller and buyer
-
Contact information of both the buyer and seller
-
Date of sale
-
A description of the car or item sold
-
Price of the car or asset being sold
-
Warranty details
-
Details of the car or asset
Why Do You Need a Bill of Sale?
For the following reasons, you will need a bill of sale when selling or buying registered items like cars.
-
-
It is a requirement –It is a legal requirement to have a bill of sale signed between the buyer and the seller when handling a transaction involving regulated o registered items like cars and trucks.
-
To avoid legal disputes –If you are involved in a legal dispute involving the sale or ownership of a car, a bill of sale will save you. A notarized bill of sale is a legal document that will often beat all other claims in a court of law.
-
Proof of purchase – In many US states, the seller is supposed to have a signed and notarized bill of sale when transferring a title for a car through the DMV.
-
For Tax Purposes– When you sell your car, you will have a portion of the sales tax to pay. And a bill of sale can help you calculate the tax as it shows the income of the sale.
-
Does a Bill of Sale Have to Be Notarized?
A bill of sale often doesn’t have to be notarized. However, six states require a bill of sale to be notarized before transferring vehicle ownership. These include Louisiana, Maryland, Nebraska, New Hampshire, Montana, and West Virginia.
Suppose you are selling a motor vehicle, boat, or any other item that needs a bill of sale, Forms.legal can assist. We offer bill of sale templates that you can fill in online, download, print, and sign. You can notarize it if it is a requirement in your state. Read more about bill of sale notarization laws in Maryland and Montana bill of sale here.