How to Write Up a Bill of Sale When Giving It Away for Free

Every state has set forth specific laws for buying and selling a vehicle. Some states require a bill of sale before you can legally transfer ownership and apply for a title. States that do require a bill of sale have their own state-specific forms that, in most cases, you can find on their respective websites. States that don't require a bill of sale may offer a generic version for your convenience. Even if your state doesn't require a bill of sale, it is an important part of buying, selling or donating an automobile that you shouldn't overlook. If your state doesn't require a bill of sale or offer a generic form, you can find generic forms online.

States That Require a Bill of Sale

At the time of publication, 30 states require a bill of sale before you can transfer ownership of the vehicle. Most of these states have pretty much the same requirements; however, some require you to have a notary public witness you and the purchaser -- or gift recipient -- sign the bill of sale and sign off on it as well.

Information to Include

Most of the information that you need to include in your bill of sale is already on the vehicles title. When you write a bill of sale, include the:

• seller's name and address
• purchaser's -- or recipient's -- name and address
• the year, make and model of the vehicle 
• color of the vehicle
• vehicle identification number -- also known as VIN
• Current plate number
• mileage accrued on the vehicle at the time of ownership transfer
• selling price, or fair market value, if you're donating or gifting the vehicle
• relationship to the purchaser or recipient, if applicable
• statement indicating that you're donating or gifting the vehicle, if applicable
• lien payoff and release information, if applicable

If you use a state-supplied form, check the box indicating that the vehicle is a gift or donation. If you're gifting or donating the vehicle, indicate a fair value for the vehicle -- this allows the motor vehicles agency to record a value for the vehicle and assess taxes as required by law. If the vehicle you're donating or gifting is jointly owned, the joint owner must be identified in the bill of sale and sign it.

Putting the Information on Paper

Start by listing all of the information about the vehicle, then create a statement that includes your full name, address and relationship to the recipient. Continue your statement indicating that you are gifting or donating the vehicle and include the estimated fair-market value.

In the next sentence state the details of any included warranty, or lack thereof, and finalize the statement with the following sentence:

I declare that the statements in this document are 100 percent accurate to the best of my knowledge and hereby release any liability involving the vehicle from this date forward.

Print two copies and sign your name at the bottom the statement. Ask the joint owner, if applicable, and whoever is receiving the vehicle to sign and date both copies of the bill of sale. Give one copy to the recipient and keep the other copy for your records.