Vehicle Bill of Sale

A vehicle bill of sale is a similar to a receipt. The document lists the important information concerning the sale of a car, truck, SUV, motorcycle or other motor vehicle. The Virginia Department of Motor Vehicles does not explicitly require written proof of the sale. However, this document can be very helpful when transferring a title, obtaining vehicle registration, paying taxes and completing other transactions regarding the vehicle.


When sale bills are completed, they need to include all of the facts concerning the sale. For example, the document should describe the vehicle that is being sold, list the names of the buyer and seller and the amount paid for the vehicle. The vehicle should be described with the year, make, model, body style, Vehicle Identification Number (VIN) and color. The bill should then be signed and dated by both the buyer and seller. It is not necessary to sign the bill in front of a notary and have the signatures notarized, but notarization will help to validate the bill as authentic. Notarization may be required when the purchase price is significantly less than the NADA book value of the vehicle.


The bill of sale is most important when buying a vehicle at below book value. For example, a car with significant cosmetic damage or a blown engine will sell for far less than a similar car that is in good condition. When a vehicle is titled in Virginia, the owner will need to pay sales tax on the purchase price of the vehicle. In general, the vehicle is taxed at the NADA book value. By having a notarized document that lists a lower sale price, the buyer will then only have to pay taxes on the actual amount of the sale. In general, a bill of sale can only be used on vehicles that are at least five years old and that were bought from a private seller.


While a bill can be used to prove the price paid for a vehicle, the vehicle’s title is also needed to complete the titling and registration process. The in-state title will need the Assignment of Title and Application for New Owner Certificate of Title sections completed by the buyer and seller. An out of state title will also need completed by the seller to register an out of state vehicle in Virginia.


As with any high dollar financial transaction, more documentation will protect both the buyer and seller from potential problems in the future. For this reason, it is generally a good idea for a bill of sale to be completed when a motor vehicle is bought or sold. Though it is generally not a legal requirement in the Commonwealth of Virginia, a completed bill of sale can help to simplify the legal process of licensing a vehicle in the state.