Last Updated February 16, 2024
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What is a Car Sale Receipt?
A Car Sale Receipt records the purchase of a vehicle and shows the transfer of ownership from the seller to the buyer. In other words, a receipt is proof of purchase for the transaction.
In the United Kingdom, it’s best practice to use a Car Sale Receipt for private sales where someone sells their used vehicle as is or sold as seen.
Even though its name refers to cars, you can use our Car Sale Receipt template when selling any motor vehicle (e.g., truck, van, motorcycle, etc.).
Do I need a Car Sale Receipt?
Yes, a Car Sale Receipt is the best way to prove the legal ownership transfer of a vehicle.
Purpose of a Car Sale Receipt
Besides being required, a Car Sale Receipt protects the seller's and buyer's interests and can prevent future disputes and issues. More specifically, a Car Sale Receipt:
- Documents the transaction and signatures on a specific date, providing evidence that both parties wanted a transfer of ownership.
- Establishes as-is condition, which proves that an item was sold as seen, with the buyer accepting the item’s condition.
- Records payment terms and establishes the agreed-upon sales price between the buyer and seller.
How do I write a Car Sale Receipt?
The easiest way to create a receipt for a vehicle sale is by using LawDepot’s Car Sale Receipt template. We’ll ask for the following details:
- Vehicle details, including the make, model, year, body type, VIN, and odometer reading
- Party information, including the seller’s and buyer’s names and addresses
- Sale price and whether sales tax applies
- Payment method, such as cash, banker’s draft, cheque, electronic funds transfer, etc.
- Loan and lien details, if applicable
In almost all cases, the buyer shouldn’t accept a Car Sale Receipt with a loan or lien against the vehicle unless the seller intends to accept full responsibility for that outstanding debt.
What’s the difference between a Car Sale Receipt and a Bill of Sale?
You can use a general Bill of Sale to transfer ownership of any personal property from one person to another. However, a Car Sale Receipt can only be used for vehicle transactions.
Who should create a Car Sale Receipt?
Generally, a seller should be the one to create the Car Sale Receipt during a vehicle transaction. If you’re buying a vehicle and the seller isn’t going to provide you with a Car Sale Receipt, you can create the document yourself and have the seller sign it.
If you find yourself in a situation where multiple people are collectively buying or selling a vehicle, you can list more than one seller or purchaser.
Determining price in a Car Sale Receipt
There are multiple factors to consider when determining a sale price. Here are some things buyers and sellers can keep in mind when negotiating a price:
- Research the market value of the specific make, model, and year to get an idea of the typical asking prices.
- Consider the vehicle’s condition, including its mileage, overall mechanical condition, and interior and exterior states.
- Use an online valuation tool, such as Parkers, to get an estimated value.
- Factor in upgraded features and how they add to the vehicle’s value.
- Consider getting a pre-sale inspection by a qualified mechanic to identify any potential issues.
Can I use a Car Sale Receipt when gifting a vehicle?
Yes, you can use a Car Sale Receipt when the vehicle is a gift. Since legally binding contracts require some form of consideration (i.e., payment), list a small price, such as £1.00 or £10.00, if you wish to transfer the property as a gift.
Who should keep the Car Sale Receipt?
A seller and buyer should sign two copies of the Car Sale Receipt so they can each keep a record of the transfer of ownership.
After you use a Car Sale Receipt
Once a private vehicle sale is closed and the parties have signed a Car Sale Receipt, the Driver & Vehicle Licensing Agency (DVLA) must be notified of the change of ownership. Here’s how the process usually goes:
- The seller registers a used vehicle for the buyer by notifying the DVLA of the ownership transfer either online or by post.
- The seller fills in the green ‘new keeper’ part of the V5C (i.e., logbook) and gives it to the buyer.
- The seller destroys the rest of the V5C.
- The DVLA should send a new V5C to the buyer in three to five days.
The process may be slightly different in Northern Ireland. Also, the buyer may need to register the vehicle if it does not have a logbook. However, the DVLA advises not to buy a vehicle without a logbook.
