What an Alabama bill of sale is and why you need one
An Alabama bill of sale is a written record that you and the buyer (or seller) sign to document the transfer of a vehicle. It shows who owned the car, who owns it now, what was paid, and when the handoff happened. Alabama law does not require a bill of sale to transfer title at the Department of Motor Vehicles, but having one protects both you and the other party if a dispute arises later—about the condition of the car, the price, or who is responsible for it.
Without a bill of sale, you have no proof of the transaction. If the buyer stops paying a loan they took out in the car's name, or if they damage property and the car is traced back to you, you will have a hard time proving you no longer own it. The same applies if you are the buyer: without a signed record, the seller could claim they never received payment or that you stole the vehicle.
Alabama does not have a state-mandated bill of sale form, which means you can write one yourself or use a template. What matters is that it contains the right information, is signed by both parties, and is kept in a safe place.
Key Takeaways
- An Alabama bill of sale must include the vehicle identification number (VIN), the sale price, the date of sale, and the signatures of both the seller and buyer.
- You can create a bill of sale using a template or by writing one yourself; Alabama does not provide an official state form.
- Both the seller and buyer should keep a signed copy for their records, separate from the title document.
- A bill of sale is not the same as a title transfer; you still need to file the title with the Alabama Department of Revenue Motor Vehicle Division.
- If the vehicle has a lien (a loan against it), the lienholder's name and the payoff amount should be noted on the bill of sale.
What information must be on the bill of sale
The bill of sale should include the full legal names and addresses of both the seller and the buyer. Use the names exactly as they appear on your driver's license or government ID. Partial names or nicknames can create confusion later if there is a dispute.
Next, include the vehicle's Vehicle Identification Number (VIN), which is a 17-character code found on the dashboard (visible through the windshield on the driver's side), on the title document, or on insurance paperwork. Also list the year, make, model, and color of the vehicle. Include the odometer reading at the time of sale—this is required by federal law and helps prevent odometer fraud.
Write the sale price in both numbers and words (for example, "$5,000" and "Five Thousand Dollars"). If the sale price is zero dollars (such as a gift between family members), state that clearly. Include the date of the sale and note whether any liens exist on the vehicle. If there is a loan against the car, write the lienholder's name and the payoff amount.
Both the seller and buyer must sign and print their names. Some people also add the date they signed, which can be useful if there is a delay between when the sale occurred and when the document was signed. You do not need a notary public to make the bill of sale valid in Alabama, though having it notarized adds an extra layer of proof.
How to create a bill of sale in Alabama
Start with a blank document—a word processor, a printed template, or even a handwritten letter on plain paper will work. Write "Bill of Sale" at the top. Then create sections for seller information, buyer information, vehicle details, sale terms, and signatures.
You can find templates online through the Alabama Department of Revenue website or through general legal document sites. These templates are free and already formatted with the right sections. If you write one yourself, make sure it is clear and complete. Avoid vague language like "sold as-is" without explaining what condition the car is in, because that can lead to disputes.
Once you have filled in all the information, print two copies—one for the seller and one for the buyer. Both parties should sign both copies in blue or black ink (blue ink is sometimes preferred because it shows the document is an original, not a photocopy). Each person keeps one signed copy.
The difference between a bill of sale and a title transfer
A bill of sale documents the sale itself—the agreement between two people that money or value changed hands and ownership moved. A title transfer is the legal process of changing whose name appears on the official vehicle title document with the state.
In Alabama, the buyer must take the bill of sale, the signed title, and other required documents to the Alabama Department of Revenue Motor Vehicle Division to register the vehicle in their name. The bill of sale is evidence of the transaction, but it does not by itself change the title. The title remains in the seller's name until the buyer completes the registration process.
This is why both documents matter. The bill of sale protects both parties during the transaction. The title transfer protects the buyer by making the ownership official and protecting the seller by removing their name from the state's records.
What to do if the vehicle has a loan against it
If the seller still owes money on the car, that debt is called a lien, and the lender's name appears on the title. The bill of sale should note the lienholder's name and the amount still owed. This tells the buyer that the seller cannot transfer a clear title until the loan is paid off.
In most cases, the sale proceeds go directly to the lender to pay off the loan, and the lender then releases the lien. The seller and buyer should agree on this in writing as part of the bill of sale or in a separate agreement. If the buyer is taking over the loan (called "assuming" the loan), that arrangement must be documented and approved by the lender.
Never sign a bill of sale for a vehicle with a lien unless you understand who is responsible for paying off the debt. If the seller disappears and the loan is not paid, the lender can repossess the car from the buyer, even though the buyer thought they owned it.
Keeping your bill of sale safe and accessible
Store your signed copy of the bill of sale in a safe, dry place—a filing cabinet, a safe deposit box, or a folder with your other vehicle documents. Keep it separate from the title document. If the vehicle is later involved in a dispute, an accident, or a legal claim, you will need to show that you have proof of the transaction.
Take a photo or scan a copy of the bill of sale and store it digitally as well, in case the paper copy is lost or damaged. If you sell the car years later, you may need to show the original bill of sale to prove you owned it during that time.
If you are the buyer, the bill of sale is your proof that you purchased the vehicle on a specific date for a specific price. Keep it with your registration documents and insurance papers. If there is ever a question about when you bought the car or what you paid, this document is your evidence.
Frequently Asked Questions
Does Alabama require a notary to sign the bill of sale?
No, Alabama does not require a notary public to witness or notarize a bill of sale. However, having it notarized adds extra proof that both parties signed it willingly and that their signatures are genuine. If you think a dispute might arise later, notarization is worth the small cost.
Can I use a bill of sale from another state?
Yes, as long as it contains all the required information (VIN, sale price, date, signatures of both parties, and odometer reading). However, using an Alabama template or creating one specific to Alabama is simpler and avoids confusion when you file with the Alabama Department of Revenue.
What if the buyer and seller disagree on the sale price after signing?
The signed bill of sale is the legal record of what was agreed to. If one party claims a different price was discussed, the signed document is the evidence. This is why it is important to write down the exact price both parties agree to before signing, and to keep your copy safe.
Do I need a bill of sale if I am trading in my car at a dealership?
No. Dealerships handle their own paperwork and do not use a standard bill of sale. The dealership will provide you with a trade-in receipt or credit memo showing what they are giving you for the vehicle. Keep that document for your records.
Can I sell a car without the title if I have a bill of sale?
No. The buyer cannot register the vehicle in their name without the signed title document. A bill of sale alone is not enough to transfer ownership at the state level. Both the bill of sale and the title must be presented to the Alabama Department of Revenue Motor Vehicle Division.