A bill of sale in Utah is a document that benefits both buyers and sellers of motor vehicles in a number of ways. It is important to write up a bill of sale contract whenever the transaction of an automobile occurs. A bill of sale for car buyers and sellers is type of sales receipt with specific information that may be referenced by the DMV and other parties at a later date. Filling out a bill of sale form can help the buyer begin car registration and prove ownership in many cases. For the seller, a bill of sale agreement works as a timestamp of transferred ownership. Get a comprehensive UT bill of sale package here.
What is a bill of sale?
A vehicle bill of sale is essentially evidence and documentation of a transaction. A bill of sale document is not an adequate proof of ownership. For example, a bill of sale form is not sufficient to complete a legal transfer of ownership. However, this type of agreement is accepted in many situations in place of a title and is therefore important to write up during any car transaction. You can fill out a bill of sale contract by hand (with ink, not pencil), or fill out a bill of sale online and print it.
A car or motorcycle bill of sale is a very helpful tool for calculating sales tax as well. If the car is purchased from a private party, the seller does not have to calculate or collect sales tax. The Division of Motor Vehicles will do this for the buyer instead. At the DMV bill of sale information is used to calculate the sales tax, based on the total purchase price. If there is no bill of sale document (or it is deemed incomplete or unacceptable), the UT DMV calculates sales tax based on what is called the “fair market value.” Utah bills of sale are based on the actual purchase price; fair market value is based on a projection of the vehicle’s cost after depreciation, which may or may not be similar to the actual purchase price.
If you are the owner registering the car without a vehicle bill of sale, you can take the car to an authorized auto dealer or insurance adjusting firm and pay for a certified appraisal. Alternatively, you use a bill of sale form to record the actual purchase price. Be sure to get the previous owner to sign it. Get started using this comprehensive bill of sale package.
All told, the DMV will calculate the bill of sale agreement price, the fair market value and an appraisal price and collect sales tax on the lowest of the three.
When a Vehicle Bill of Sale is Useful
A new or used car bill of sale is helpful to have in many cases. Here are a few:
- The DMV can use the bill of sale to calculate sales tax when you register your new vehicle.
- If you are seeking a temporary permit to move a newly purchased vehicle, you should keep the title (or a copy of the title) and a bill of sale in the vehicle as you drive it to the DMV office. This will give you evidence of recent purchase in the event you are pulled over and/or questioned by an officer.
- A car or motorcycle bill of sale is a great thing to have with you when you are applying for a duplicate title.
- A bill of sale contract in Utah also serves as evidence of ownership if you need to retrieve an impounded car.
You should draft up a bill of sale even if the vehicle was gifted to you. Simply write “$0” as the purchase price. Obtain a bill of sale form here.
The Benefit of a Bill of Sale for Car Buyers
Bill of sale documents are beneficial to the buyer as they provide him or her with evidence of the purchase price of the vehicle. This helps the buyer to recognize whether he or she is paying more than necessary for sales tax at the DMV.
Additionally, a bill of sale agreement can help buyers register their cars faster. A UT bill of sale with the previous owner’s signature on it is enough for buyers to obtain a temporary registration permit from the DMV while they fulfill remaining requirements for registration.
The Benefits of a Bill of Sale for Car Sellers
For sellers, bill of sale contracts with signatures from both parties help to prove that a legal sale has taken place. Bill of sale car papers allow sellers to walk away from a transaction without having to worry about how the use of the car will reflect on him or her. For example, if the purchaser causes damage with the vehicle or receives a parking ticket, the bill of sale agreement proves that the seller had already been rid of the vehicle and thus should not be held responsible.
Additionally, some junk car or tow truck removers will accept a Utah bill of sale as enough proof of ownership to take the vehicle off your hands.
How to Fill Out a Bill of Sale Form
A standard bill of sale contains at least the following information:
- Language detailing the transfer of ownership and assurance that the vehicle is free of liens
- The name and address of both the buyer and seller
- The signature of at least the seller
- A description of the vehicle
- The type of vehicle (e.g., motorcycle, automobile, boat)
- The vehicle identification number (VIN)
- The year, make and model
- The purchase price
- A description of the trade-in vehicle (if applicable)
You can obtain a bill of sale template document online. Be sure that any templates or forms you use have at least the fields listed above. Get your comprehensive bill of sale package here.