If you have ever had your eye on an automobile and saved your money then you know when it came time to purchase it you had to pay the person and sign a piece of paper. Did you know what you where signing? To you, it was the title because it was a used car and it was paid for and did not have a bank loan on it anymore. To the person selling it the piece of paper was actually a bill of sale for the automobile in addition to the title.

A bill of sale is a piece of paper that provides all the information unique to the item with identification numbers that transfer ownership from one person to another legally. The clear title has all this information on it. On the front of the title it has the name of the owner, the vehicle identification number, the make and model, and year of the automobile.

When you as the new owner purchase the car from the old owner you sign the back of the paper providing your name and the amount of monies paid for the vehicle and the date you purchased it which shows the date ownership was transferred. This is the piece of paper serving as the bill of sale that you can take to the department of motor vehicles to apply for a new registration in your name. You will be charged the sales tax based on the amount paid for the automobile which will be checked against the fair market value of the car.

You will be asked if you have car insurance coverage for your new vehicle and if you do you will have to produce a policy number and insurance company name. Otherwise you may be subject to a fine for no insurance. You will pay for new license plates that day and receive your new registration that day before you leave the department of motor vehicles. This information will be forwarded to your county office so a personal property tax bill will be established for you if your state charges personal property taxes on automobiles.

Before purchasing a new or used car check on the items you will need to make sure you are not taken by surprise by any hidden charges when purchasing your license plates at the DMV.