How to write a car sale agreement
If you're selling any kind of motor vehicle to an individual buyer, you’ll need to provide a correctly worded receipt. A car sale agreement acts as an invoice and a contract, protecting the rights of both parties.
It's worth taking the time to get it right, so you have a stress-free transaction. Get it wrong and a variety of problems could make life very uncomfortable.
So here's what you should know about creating a vehicle sale agreement that helps make the transaction as smooth as possible.
What is a car sale agreement?
Formally known as a bill of sale, a car sale agreement acts as a record of the transaction, transferring ownership of the car from the seller to the purchaser. It makes the agreement a legal document, so it becomes critically important if there's any kind of dispute. Every private sale should be covered by one.
A car sale agreement validates and records a private sale in written form, so the terms of the sale, who's buying, who's selling, what is being sold and the price have to be stated clearly. There's no room for doubt or ambiguity.
The car sale agreement should be signed when the buyer has taken ownership of the item, and the seller has either received full payment or the terms of payment have been agreed. Each party should receive and retain a copy.
What is included in a vehicle sale agreement?
When a second-hand vehicle is sold, the agreement is a contract between the buyer and seller. It proves that you (the vendor) have sold that specific vehicle to a named person on a particular date.
Perhaps you're wondering what to write on a vehicle bill of sale. The information it should include:
- Vehicle details – a description of the car including year, make, model and colour
- Vehicle identification number
- Car mileage
- Licence plate number
- The date of the sale
- The address at which the sale took place
- Details of any guarantees, warranties, or conditions attached to the sale
- Price and any tax payable
- Payment details – the agreed terms and form of payment
- Loans and liens on the item, if applicable
- Delivery details – is the vehicle being shipped, delivered by the seller, or picked up by the buyer?
- Terms and conditions of the sale
- A description of the nature of the agreement between the buyer and seller and details of the transaction
- Seller and buyer information (full names and addresses) and signatures
You'll also need to list all the documentation being supplied with the vehicle, including:
- An MOT certificate if the car is over three years old
- The V5C vehicle registration document
- The car’s handbook, service logbook, and any receipts
What wording should I include in a car sale agreement?
The bill of sale should always include the words "sold as seen, tried and approved without guarantee". However, please bear in mind that using this wording doesn't alter anyone's legal rights.
Saying "sold as seen" is not an excuse to sell a vehicle that isn't roadworthy, for example. It's against UK law to sell a vehicle in unroadworthy condition to anyone in any circumstances. There are no exceptions.
Similarly, you have no right to describe the vehicle inaccurately, whether the description is spoken or written.
Why do I need a car bill of sale?
All sales of private vehicles need a car bill of sale to ensure that there's a written record of the transaction, showing that both parties agreed on the terms of the sale. The "sold as seen" wording helps avoid any argument about the condition of the car at the time of the sale.
However, buying from a dealership is different. A bill of sale is not required because the buyer's rights are protected in other ways, including the Consumer Rights Act.
What does a car sale agreement look like?
Most bills of sale will be produced in a digital format nowadays, but whether it's digital or on paper, handwritten or typed makes no difference to its validity. What matters is that the agreement contains the necessary information—and that both parties to the sale sign it and keep a copy.
How else can you protect yourself when selling vehicles?
When you're selling a vehicle privately, getting the bill of sale right is essential but may not be completely sufficient to cover yourself. You may also need insurance. Even if you’re buying and selling vehicles as a part-time sideline, you can obtain some form of motor trade insurance, such as vehicle sales insurance.
At ChoiceQuote, we've been sourcing insurance for motor trade professionals for decades. We can provide a range of specialist policies for many occupations across the sector and for individuals who are struggling to find suitable cover, such as young motor traders. Cover can often be activated immediately.
Get your motor trade insurance quote today
To discuss your motor trade insurance needs, call the dedicated ChoiceQuote team. For road risk insurance, please call 01625 854458, or for traders' combined insurance, please call 01625 854443. Better still, take a look at the full range of services and policies we offer by visiting our Motor Trade Insurance page.
The sole purpose of this article is to provide guidance on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. We do not accept any liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.