A bill of sale is necessary when selling personal property, such as a vehicle, and should include names, addresses, purchase price, and identification numbers. It’s best to create it on a computer and both parties should sign it. Terms of the agreement should be written down and both parties should keep a copy in a safe place. Accurate information is important for tax purposes. The bill of sale serves as proof of purchase for any item from a private seller.
A bill of sale is most commonly used when personal property, such as a vehicle, is sold to another individual. For clarity, this document is best created on a computer rather than a handwritten agreement. The bill of sale must include the full name, address, and telephone number of both the buyer and seller involved in the transaction. The date of the contract, the purchase price and any identification numbers of the item sold must also be clearly indicated on the form. Then, both parties must sign it for the documents to be complete.
Be sure to include the transaction date on the sales invoice. Clearly outline the names of the buyer and seller, as well as the purchase price of the item. If you are selling a vehicle, be sure to include the year, make and model of the car. In addition, if applicable, the vehicle identification number (VIN) and current mileage must be indicated on the sales invoice. If not, an item’s serial number and description should suffice.
It’s a good idea to write down the terms of the agreement. Private sellers may offer a limited warranty, for example, or simply sell the item “as is,” disclaiming any responsibility to make repairs, even if they are currently needed. Any verbal agreements and understandings as to the condition of their ownership and the buyer’s remedy should extensive repairs be required must be in writing. Failure to record specific terms on the bill of sale can lead to misunderstandings later.
Once the deed of sale has been written, two copies must be printed. Both parties should sign each. This way, the buyer has an original copy and the seller has one too.
Sales invoices must be kept in a safe place. If they are created for car purchases, the buyer does not have to keep his copy in the vehicle. A location within your home, or a safety deposit box, is a better place to keep your document.
Accurate information is very important. For example, a representative of a car labeling agency in the United States may refer to the purchase price listed on the bill of sale or title to calculate sales tax. You may end up paying the agency too much or too little if the former is used to calculate it.
Regardless of how the document is used, it’s important to keep it close at hand. It serves as proof of purchase, not just for a car, but for any item purchased from a private seller. Essentially, this is your receipt to prove that the transaction went through and that both parties agree to the terms as written in the document.
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