What a bill of sale does and when you need one in Alabama

A bill of sale is a written record that you sold a car to someone else. In Alabama, it documents the sale price, the vehicle details, the date, and the signatures of both the seller and buyer. The state does not legally require a bill of sale to transfer a car title, but you should create one anyway — it protects both of you if a dispute arises later about the sale price, condition, or who owned the car on a specific date.

You need a bill of sale whenever you sell a car privately (not through a dealer). If you buy or sell through a dealership, the dealer handles the paperwork and provides their own bill of sale as part of the transaction. For private sales, you create the document yourself or use a template.

The bill of sale becomes part of your records. The buyer will need it when they register the car with the Alabama Department of Revenue, Motor Vehicle Division. The seller keeps a copy for their records in case questions come up later about the transaction.

Key Takeaways

  • Alabama does not legally require a bill of sale, but creating one protects both buyer and seller by documenting the sale price, vehicle details, and date of transfer.
  • The bill of sale should include the vehicle identification number (VIN), odometer reading, sale price, and signatures of both the buyer and seller.
  • You can write a bill of sale by hand or type it; Alabama accepts both formats as long as both parties sign and date it.
  • The buyer will present the bill of sale to the Alabama Department of Revenue when registering the vehicle in their name.

What information to include on an Alabama bill of sale

Write or type the following details on your bill of sale. There is no official state form, so you can use a blank piece of paper or a template from a legal website.

Seller information: Your full name, address, and phone number.

Buyer information: The buyer's full name, address, and phone number.

Vehicle details: The year, make, model, color, and vehicle identification number (VIN). The VIN appears on the driver's side of the dashboard and on the title document.

Odometer reading: The mileage shown on the odometer at the time of sale. Write it exactly as it appears on the gauge.

Sale price: The amount paid for the car, written in both numbers and words (for example, "$5,000" and "Five Thousand Dollars").

Date of sale: The date the buyer took possession of the car.

Signatures and dates: Both the seller and buyer must sign and date the document. If the buyer is financing the car through a lender, some lenders require the buyer's signature to be notarized, though Alabama does not require this by law.

Condition statement (optional but recommended): A note about the car's condition — for example, "sold as-is" or a list of known issues. This protects the seller from later claims that the car was misrepresented.

How to write and sign the bill of sale

You can handwrite the bill of sale or type it. Either format is acceptable in Alabama as long as both parties sign it. If you handwrite it, use a pen (not pencil) so the document cannot be altered later. Leave space for signatures at the bottom.

Both the seller and buyer must sign the bill of sale in front of each other. Each person should sign their own name, not print it. Write the date next to each signature. If the buyer's lender requires a notarized signature, take the signed bill of sale to a notary public (banks, UPS stores, and some law offices offer this service for a small fee) and have the buyer's signature notarized there.

Make at least two copies — one for the seller and one for the buyer. The buyer will need their copy when they go to the Alabama Department of Revenue to register the car. Keep your copy in a safe place in case questions arise about the sale later.

What happens after you sign the bill of sale

Once both parties sign, the bill of sale is complete. The buyer then takes their copy to the Alabama Department of Revenue, Motor Vehicle Division, along with the signed title document and payment for registration and tag fees. The buyer cannot legally drive the car until they register it in their name.

The seller should keep their copy of the bill of sale for at least three to five years. If the car is later involved in an accident, crime, or other incident, the bill of sale proves you no longer owned it on the date of sale. You should also notify your insurance company that you have sold the car so they can cancel your policy.

If you financed the car and still owe money to a lender, you cannot sell it until the lien is paid off. The lender holds the title until the loan is satisfied. Once you pay off the loan, the lender releases the lien and sends you the clear title, which you then sign over to the buyer.

Using a template versus writing your own

You do not have to use a specific form. Many websites offer free bill of sale templates for Alabama that you can read and fill in. These templates include all the standard fields and language that protects both parties. Using a template takes less time than writing from scratch and reduces the chance you will forget important details.

If you write your own bill of sale from scratch, make sure it includes all the information listed in the section above. The document does not need fancy language — plain, clear statements of fact are sufficient. For example: "I, John Smith, sold my 2015 Honda Civic, VIN 12345ABCDE, to Jane Doe on January 15, 2024, for $8,500."

Common mistakes to avoid

Do not leave the sale price blank or write "cash" without a dollar amount. The Alabama Department of Revenue uses the sale price to calculate registration fees and taxes, so the buyer needs a specific number. If you do not agree on a price, the transaction is not complete.

Do not sign the title document until you have a signed bill of sale. Once you sign the title, the transfer is legally in motion. If the buyer changes their mind or the check bounces, you will have a harder time proving you still owned the car.

Do not forget to include the VIN and odometer reading. These details prevent disputes about which car was sold and whether the mileage was accurate at the time of transfer. The odometer reading is especially important because it affects the car's value and the buyer's ability to detect tampering later.

Do not assume the buyer will handle registration right away. Some buyers delay registering the car, which can create confusion if the car is involved in an incident. Make it clear in writing that the buyer is responsible for registering the car within the required timeframe (usually 20 days in Alabama).

Frequently Asked Questions

Does Alabama require a notarized bill of sale?

No, Alabama does not require a notarized bill of sale. However, if the buyer is financing the car through a lender, the lender may require the buyer's signature to be notarized. Check with the lender before signing to find out their requirements.

What if I sell a car to a family member?

You still need a bill of sale, even if you are selling to a spouse, parent, or child. The bill of sale documents the transfer for the Alabama Department of Revenue and protects both parties. The sale price should be the actual amount paid, not a gift or a reduced family rate, unless you are genuinely gifting the car — in which case, write the sale price as zero and note "gift" on the document.

Can I sell a car without a title in Alabama?

No. You must have the signed title document to transfer ownership. If you have lost the title, contact the Alabama Department of Revenue to request a duplicate. You cannot complete the sale until you have the title in hand.

What if the buyer does not register the car right away?

The buyer is responsible for registering the car within 20 days of purchase. If they do not, you may still be liable for parking tickets or other violations if the car is registered in your name. Keep your copy of the bill of sale and consider sending the buyer a written reminder about the registration important date.

Is a bill of sale the same as a title?

No. A bill of sale is a record of the sale transaction. The title is the legal document that proves ownership. Both documents are needed to complete a car sale in Alabama — the bill of sale shows the sale happened, and the signed title transfers ownership to the buyer.