Automotive Bill of Sale & Release of Liability

What does an Automotive Bill of Sale look like?

Buying and selling a motor vehicle involves more than just exchanging money and keys. The law requires each seller to document the transaction with a bill of sale. Each state has an official Department of Motor Vehicle (DMV) website where you can download the required forms. The bill of sale will usually include some of the following information:

• A description of the vehicle, including make, model and year

• The final sale price

• The full legal name of the buyer and seller including their address and phone number

• The date the vehicle was sold

• The odometer reading indicating the vehicle’s mileage

• Original signature of the seller and buyer

A vehicle identification number inspection must be completed by a DMV employee, a law enforcement office or a licensed vehicle dealer. The new owner will be required to register the vehicle in his or her name at the DMV and apply for a new certificate of title.

What is a Release of Liability?

Once you have completed the sale of your vehicle, the law requires you to file a release of liability with the DMV and surrender the vehicle’s license plates. This notice protects the seller from the following after the date of sale or transfer:

• Parking and/or traffic violations

• Any civil litigation arising from use of the vehicle

• Registration renewal fees

If you receive a registration renewal notice from the DMV, check to see that the release of liability and bill or sale were filed correctly. The person who buys your vehicle should complete the transfer of title in his or her name within a certain period, usually 30 days. If the buyer fails to follow through, you may still be legally liable until the vehicle is properly titled and registered to the new owner.

Don’t Forget These Important Steps
After all of the paperwork has been filed and the title has been transferred, before handing over the keys to the new owner, don’t forget to do the following:

• Accept only a money order, cash or certified check for payment. Never agree to take a personal check from someone, even if they are a relative of yours.

• Remove any and all personal items from the trunk and storage places. Make sure to remove the license plates as well.

• Cancel your car insurance so if anything happens to the vehicle, you will not be held responsible.

If you run into legal problems with the buyer, consult with an experienced attorney for advice.