If you’ve ever looked into making a large purchase, then you may have heard of a bill of sale, but you may be unsure as to what it is or when you need to use one. We’ll not only define a bill of sale but also explain when and where one might be needed. 

If this article helps you realize that you need one, then you’ll be happy to know that there are plenty of online resources to help you complete your bill of sale in minutes. Without further ado, let’s jump into a definition.


A bill of sale is a document that states that the ownership of an item is being passed from one party to another. While many sales don’t necessarily need one, it’s legally required for large or branded items like vehicles or animals. 

While it’s not typically labeled as a bill of sale, you may be able to consider the receipt you receive after purchasing something as one. For example, your grocery receipt is a bill of sale stating that you purchased and now own a loaf of bread, a jug of milk, and some eggs. 

However, if you decide to sell your car to someone, then you must fill out a bill of sale to show that the vehicle is no longer yours and that any issues with or about it should be directed to the new owner. To put it simply, a bill of sale is a document that states that someone else now owns an item that used to belong to you, and this allows that other person to do what they want with it. 


There are many different types of bills of sale, with each one being used or required for different items or purposes, but there is some information that is included on every one of them. The date of purchase, the amount paid, a description of the item, and more must all be included on even the most basic of documents. It must end with at least one party’s signature, though which is required varies from state to state.

One of the most common bills of sale that you may encounter is the vehicle bill of sale. On top of including the information mentioned above, this type must also include the vehicle’s type, make, model, registration number, and more. This information is necessary to avoid confusion as to which vehicle you actually purchased and now own.

Some bills of sale will include a warranty to guarantee that a product works as intended for a certain duration of time. This warranty provision will explain what kinds of damage the original owner will pay for and up to how much they will spend for these repairs or replacements. If a bill of sale lacks this provision, then it’s assumed that the time was sold under an “as is” provision instead, which just means that the person responsible for any repairs or replacement costs is the new owner.

Determining If You Need a Bill of Sale

Bills of sale can be vital in ensuring a legal paper trail as to the current owner of an asset. They are required for large purchases to show that one person willingly gave another an expensive and important item and that it wasn’t stolen or otherwise obtained illegally. 

Before making a big purchase or sale, check the laws of your state about what requires a bill of sale and what it needs to include, and contact a lawyer or financial advisor for further clarity if necessary.