Vehicle Bill of Sale

Believe it or not, a bill of sale for the private sale and purchase of a vehicle is not required in the state of Texas. Private sale refers to a person-to-person transaction in which a private citizen buys a vehicle from another private citizen.

This does not include vehicles bought and traded at a dealership.

While this sales document may not be legally required, it is nonetheless the best business practice to issue one for any and all such sales and purchases. Since it is a legal document, it offers some degree of personal protection against any legal claims which may come to the fore after the sale.

It also offers some measure of protection for the seller since it pretty much summarizes the actual transaction that transferred ownership of that particular vehicle from the former owner to the buyer.

It is a legal record. That legal record of passed on ownership can absolve the former owner of any responsibility, and thus any liability, for any future damage and harm the vehicle and its current owner may cause.

Likewise, this same legal record can offer protection for the new, current owner. Should any ownership disputes arise, the terms clearly spell out the essential details of the purchase. Both parties agreed to the transaction as is witnessed by the exchange of money on the date of the transaction.

Additionally, if the former owner decides he got the ‘short end of the stick’ or was ‘beat out’ of his vehicle, and demands additional money, this document, including the amount paid, nullifies such later claims.

Conversely, if the new owner discovers too late that the vehicle is a ‘lemon’, this document clearly names the culprit who sold him this ‘piece of junk’.


Are Bills of Sale the Only Required Document?

The short answer is no. For any vehicle sale to be finalized here in Texas, that vehicle’s title must be transferred to the new owner. Two documents are legally required to complete the final transaction.

The buyer gets the signed and dated title from the seller along with a filled out application for Texas title (form 130-U). The buyer must then make sure there are no outstanding claims against that title and obtain a release of lien for that vehicle if needed.

The new owner then takes these documents to the county tax office and pays the related fees and any taxes. Only then is the sale finalized, and this finalized sale is legally binding on both parties.


Main Purpose of the Bill of Sale

Since the focus of this article is the bill of sale and not the title transfer, let’s take a closer look at it. It is critical for the legitimacy of the sale to get this document completed correctly. An improper or incomplete sales document defeats the intended purpose which is an accurate record of sale.


Two Most Important Blanks and Box

The top box, “Vehicle Information” is the box that contains the identity of the vehicle, and the VIN is the most important part of that identity. In fact, it is the identity.

More than any other descriptor like make, model, color or any other distinguishing characteristics, the VIN is the central identifier of the vehicle. After all, VIN stands for Vehicle Identification Number, and that is exactly what it does.

The next most important blank in this top field is the odometer reading. Since the odometer represents or should represent, the total miles traveled, it can give indicators about just how much use the vehicle has left in it.

This is the main reason odometers are ‘adjusted’ so frequently in the car business. You can be sure those who tamper with odometers are not doing so to add miles. No, no, no, they want to lower the mileage to give the vehicle that ‘not used up, yet’ appeal.

Generally, it is a good idea not to buy vehicles with high odometer readings. Depending on what you are buying the vehicle for, avoid cars with over 50,000 miles. Ideally, cars with under 30,000 miles give longer, better service.

Ultimately, if you cannot trust the guy you are doing business with, it is best not to do any business at all. If you do not think that the odometer reading is correct, all other things considered, do not buy the vehicle.

Since the bill of sale is originated by the seller, you are basically taking his word for the condition of the vehicle.