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If you are planning to buy or sell a car, boat, trailer, or handgun in Indiana, you will probably need a bill of sale.
The Indiana bill of sale is a document that outlines the relevant details about the personal property ownership transfer. It is often required by the governmental agencies in charge of item registration. Even if it’s not required, the parties should have a bill of sale for numerous reasons, namely:
Mandatory Information
To prevent any misunderstandings about the important elements of the transfer
As proof of purchase price to be submitted to tax authorities
To limit the seller’s liability over the item after the ownership transfer
As proof of ownership for the buyer if there is no title certificate
Indiana Bill of Sale Parties
The most important parties to the bill of sale are the buyer and the seller.
Seller
A seller is a person who transfers the item from their personal property to the buyer. In the bill of sale, they are also referred to as the transferor.
Buyer
A buyer, or transferee, is a person who obtains the item from the seller and pays the purchase price in exchange.
Buyer And Seller Disclosure
According to the Truth in Mileage Act, every seller is required to disclose the odometer reading of their motor vehicle. This disclosure can be included in the certificate of title or the bill of sale.
The seller should also disclose any item damages or flaws. Additionally, the bill of sale should include the “as is” condition. The "as is” condition stipulates that the buyer agrees to buy the item with all the damages and flaws. This will prevent any claims by the buyer for the damages that were present at the moment of purchase.
Indiana Bill of Sale Description of Goods
This section should include all the relevant details about the transferred item. The description of goods will contain different elements, depending on the type of item. In most cases, it contains the following details:
Mandatory Information
Identification of the item. Depending on the type of item, this can include the make, model, dimensions, production year, color, and other details.
Item’s serial number. This is the most commonly used information that helps to individualize the item.
Description of item’s condition. This shall include any damages and flaws of the item.
The most important principle is to provide all the details that will help make the item distinguishable from other items of the same kind.
Indiana Bill of Sale Purchase Price
The purchase price describes the compensation that is due to the seller. Below are the three most commonly used ways of compensating the seller.
#1. Payment
When using payment as a compensation method, the buyer gives the seller a certain amount of money in exchange for the transferred item. Payments are usually made with cash, a credit or debit card, checks, or a bank transfer.
#2. Trade
A trade is a method where the buyer and seller exchange the items in their possession. This is often used for motor vehicle purchases. For example, the buyer can trade in their old car for a new one. The buyer often has to pay additional money to cover the difference in value between the old and the new car.
#3. Gift
This method is often used when there is a personal relationship between the transferor and the transferee. If the item is transferred as a gift, there is no compensation due to the transferor.
Indiana Bill of Sale for Motor Vehicles (Cars) Requirements
Out-of-State Vehicles
If you purchase a vehicle from another state, you should apply for a certificate of title at the local Indiana Bureau of Motor Vehicles (BMV) office.
When submitting your application, you should attach the bill of sale as proof of vehicle purchase.
Abandoned or Junk Vehicles
A vehicle that is wrecked or damaged can be eligible for a salvage title.
If the vehicle was manufactured in the last seven model years, a salvage title is required. However, if the vehicle is older, the salvage title is optional. If you don’t apply for a salvage title, you can always use a general bill of sale to transfer your salvage vehicle.
Vehicles Sold by Dealers
Dealers will, in most cases, apply for the vehicle title and registration on your behalf. In the meantime, you can use the bill of sale as proof of ownership.
Vehicles Sold by Private Parties
Private parties can use the bill of sale to outline all the details that are not provided in the certificate of title.
Indiana Bill of Sale for Boats (Vessel) Requirements
The boats and vessels should be registered and titled the same way as the motor vehicles. The state provides a bill of sale form that can be used for both motor vehicles and vessels.
The bill of sale can be used in case the certificate of title is not available or when the parties want to include additional details that are not provided in the certificate of title.
Indiana Bill of Sale for Firearms Requirements
You are not required to register or title a firearm in Indiana. However, you should consider having a bill of sale when transferring ownership of the firearm.
The seller will limit their liability if the firearm is used in illegal activities after the purchase. The benefit for the buyer is that they will have valid proof of ownership in the form of a bill of sale.
Indiana Bill of Sale for Horses Requirements
The horse bill of sale in Indiana should include the following:
Mandatory Information
Names and addresses of the buyer and the seller
Horse’s name, breed, age, and gender.
Registration number (if applicable)
Description of horses condition
Information about any additional equipment sold with the horse
Indiana Bill of Sale for Trailers (RVs) Requirements
The bill of sale can be a valid proof of ownership in the case of:
A utility trailer purchased before the January 1st, 1990
A pop-up trailer purchased before July 1st, 2016
In all the other cases, the trailer must have a certificate of title. A bill of sale or certificate of title should be submitted to the local BMV office when registering a trailer.
Indiana Bill of Sale Other Requirements
Every party to the bill of sale should have at least one copy for their personal records. In addition, a copy of the bill of sale should also be submitted to the local BMV for the registration of motor vehicles or vessels.
The parties can draft their bill of sale in any language the seller and the buyer can understand. Please note that if you are submitting the bill of sale to a government office, it should be in English.
Indiana Bill of Sale Taxes
When drafting the bill of sale, you should enter the purchase price so the bill of sale can be used as proof of item value for calculating the sales tax.
The bill of sale should include a warning to the parties about the legal consequences of entering a false purchase price in the lease agreement.
Indiana Bill of Sale FAQ
The handwritten bill of sale is a legitimate and valid document as long as it contains all the necessary information about the parties and the item.
The Indiana bill of sale should be signed by the seller and the buyer. In some cases, additional witness signatures might be required.
The best way to get a professional and customizable bill of sale for ownership transfer in Indiana is to download one of the bill of sale templates available on our website.
The seller benefits from the bill of sale by protecting themselves from liability over the item after they transfer ownership to the buyer.
The bill of sale benefits the buyer because it can be used as proof of ownership in case the title certificate is not available.