A Colorado bill of sale is a document that verifies a transaction between a buyer and a seller. Usually, a bill of sale form is completed by car dealerships and automatically submitted to car buyers. However, a vehicle bill of sale should be completed even when vehicle sales occur independently from dealerships. A bill of sale for car documentation clearly identifies the buyer and seller and the property (i.e., vehicle) being sold for driving records. Residents may get a comprehensive bill of sale package here and determine when a bill of sale form is required by reviewing the following sections.
What is a Colorado bill of sale?
A CO bill of sale template includes spaces for buyers and sellers’ signatures, the date of the purchase and essential vehicle information. This same information should be listed on a used car bill of sale or a sale form for a new car. Pertinent vehicle information such as the year, make, model and vehicle identification number (VIN) should be printed clearly on the forms. Additionally, all participating buyers and sellers should have access to copies of the completed bills of sale for their driving records. The bill of sale form should also indicate the previous car owner’s release from all ownership and will not incur any penalties the new car owner receives while operating the motor vehicle. This process must be performed for many other transactions. For instance, a motorcycle bill of sale following the same criteria must be filed when a motorcycle is purchased. Not only does the bill of sale finalize the transaction, but it also satisfies driving laws put forth by the Colorado Division of Motor Vehicles (DMV). According to the CO DMV, new car owners must carry a bill of sale form with the appropriate information and proof of vehicle insurance in their vehicles at all times until they register their vehicles.
However, a CO bill of sale does not prove change in vehicle ownership when registering vehicles. The vehicle’s old title must still be obtained and updated to substantiate an ownership change. Residents may access a bill of sale online or purchase one through a vendor such as Colorado Auto Dealers Association or A-B-C Enterprises. A DMV bill of sale may also need to state the odometer reading at the time of purchase and other emissions inspection information if residents live in an inspection area. Residents interested in learning more on bills of sale may get a comprehensive bill of sale package here.
When is a bill of sale is required in Colorado?
Residents are advised to complete a bill of sale form when vehicles are being sold from a seller to a buyer. However, residents are only required to complete bills of sale in certain circumstances. For instance, new car owners will need to have a bill of sale if they must drive their newly-bought vehicles from the places of purchase to their places of residence. A bill of sale document may temporarily serve as a vehicle registration document when the new car owner has purchased the vehicle within the last 36 hours, when the vehicle was purchased on a Saturday, Sunday or legal holiday and when the vehicle is only being driven to the places in which they are going to be stored. Occasionally, a standard bill of sale will be used to disclose a vehicle’s odometer reading rather than the vehicle’s title. In this case, car owners must keep both their bills of sale and titles to remain legal. Regardless, a bill of sale contract is encouraged for all residents to use when buying or selling motor vehicles.
Benefits of a Colorado Bill of Sale for Car Buyers
Car buyers will benefit from completing a bill of sale agreement because the document will help them manage their driving records. Additionally, a bill of sale can be utilized when filing taxes or to avoid legal issues. Car owners may receive tax breaks depending on their vehicle purchases, and bills of sale can confirm the cost of their investments. Bills of sale can also help buyers verify their purchases. A bill of sale form can act as another document that will authenticate the transaction if sellers request additional money beyond the amount listed in the agreement, or if a third party attempts to invalidate vehicle ownership. The document is especially useful for private purchases as well. Increasing the number of formal documents verifying a purchase is never a bad idea.
Benefits of a Colorado Bill of Sale for Car Sellers
For car sellers, a bill of sale serves as another document that removes their rights as a vehicle owner. A CO DMV bill of sale helps sellers sever their connections to the sold vehicle and allows the new owner to assume that position. This is an important part of bills of sale during the selling process. If sellers do not completely remove themselves as lienholders, they may face repercussions and have to handle legal penalties the new vehicle owners incur. Bill of sale documents may help prevent this issue for car sellers.
Required Information for a Bill of Sale in Colorado
All bill of sale forms in CO must include the vehicles’ years, makes, models and VINs to be considered valid. Also, bills of sale should show the time and date of the vehicle sales and list all necessary signatures (i.e., all buyers and sellers involved in the sale). The document may vary slightly, depending on the type of vehicle being sold, but most forms will list the purchasing price for the vehicles as well. Additionally, a standard CO bill of sale should state that the seller relinquishes all rights to the vehicle, that the buyer has inspected the vehicle thoroughly and that the vehicle has been purchased with a valid title. Some bills of sale may also include odometer readings and the affirmation that the new car buyer will obtain new vehicle registration and insurance.