Whenever you engage in a private sale, you should issue a receipt to the buyer. It's vital to have a car sale receipt for tax purposes, but it can also protect you in case of a dispute because it proves the payment and transfer of ownership were complete.
Receipts can tell you when a transaction took place, how much money the participants exchanged, and some details about the item in question.
Find out everything you need to know about creating a car sales receipt in this tell-all guide.
Do I Need a Bill of Sale for My Car?
Receipts are always important, but when the item in question is something as expensive as a motor vehicle, they are even more essential. Private car sales are common, but since the transaction takes place between two parties without a business involved, there are some risks.
For example, the seller may lie about the condition of the car, while the buyer might lie about the bank transfer taking place. A certain degree of trust is essential, which is where a private sales receipt comes in.
A selling car receipt can help you prove the exchange of personal property took place in case the new buyer gets into an accident or racks up any fines before they transfer ownership of the vehicle. You can also use the receipt for tax purposes.
In some states, the new buyer may not be able to register the car without proof of purchase, even if they have the vehicle identification number.
Laws Governing Car Sale Receipts in Australia
There are two main laws governing car sales in Australia: the Motor Vehicle Dealer Act, and Consumer Law.
All contracts for vehicle sales come under the Motor Vehicle Dealer Act, which stipulates that both the buyer and seller need a copy of a contract outlining all terms of sale. The following should be outlined in the contract documents:
- Formation: outlines the purpose of the sale
- Finance: explains how the buyer will pay for the car
- Price: the total purchase price, including a breakdown of tax and deposits
- Vehicle delivery: the date of delivery to the buyer and how they will obtain it
- Buyer rights: whether the customer can stop the transaction at any time and what counts as reason to do so. If there is a cooling off period, include it here
- Dealer rights: whether the seller has any right to cancel the transaction, or what to do if it becomes evident the buyer is unscrupulous
- Mode of communication and notice
Meanwhile, Australia's Consumer Laws also govern all sales. It's worth reading up on Consumer Law as a seller, as the rules lean slightly in the customer's favour. You should know how to proceed legally with the entire sales process.
What to Include in a Car Sale Receipt
Every car sale receipt needs to include particular sections. There are a few ways to write out the receipt, which we cover in the section below. Alternatively, you can download a receipt template and use it to help you.
Make sure you have the following sections on your car sale receipt:
- Title: If you own a dealership and run a business, mention the title at the top of the page. If not, skip this section.
- Date of sale
- Sellers details: include all of the following
- Name
- Contact number
- Address
- Driving license number
- Buyer's personal details: include the same as above
- Vehicle details:
- Make and model
- Car registration date
- Vehicle identification number
- Chassis number
- Road tax details
- Insurance details
- Payment details: full price, including a breakdown of sales tax and any deposits. Also include due date for payment. Make sure to include the following taxes:
- Goods and service tax
- Registration transfer fees
- Luxury car tax (if applicable)
- Vehicle condition: include all the details about the vehicle's current condition. You may also want to include an odometer reading.
- Signature: ensure the document can be signed and dated by both parties
Your car sale receipt is acceptable if it has all of these sections, but it's often easiest to use a receipt template just to make sure you have everything checked off.
How to Write a Car Sale Receipt
If you download a receipt template, all you need to do is fill in your details. If you are making your own car sale receipt, you can do it in a word document. It's best to save it as a PDF to ensure the formatting stays in place.
You can either print out your receipt and provide a copy to your buyer (make sure you also have a copy with their signature), or provide the document electronically. There are plenty of ways to sign a document via the internet, which mitigates the need for paper copies and gives you an easy chance to store your receipt online.
What Else Do You Need to Do When Selling a Car?
A car sale receipt is not the end of the matter. There is other paperwork you need to get in line, including:
- Vehicle identification number (VIN), chassis number, engine number, and other details about the car such as a PPSR check and an odometer reading
- Car service reports
- Warranty documents (transferrable warranty can fetch you a higher price when selling your car, so it's worth checking)
- Sale bill from your initial purchase
You can transfer paperwork to the new buyer if they want it, but you might want to keep copies.
Following the purchase of the motor vehicle, the seller or buyer will need to officially transfer ownership of the vehicle. You have a certain time period (depending on where you live) to notify the local authorities about the car's new owner. A car dealer usually provides a transfer form, but in a private sale, it's down to you. Make sure you lodge a notice of disposal to show you sold the car.
The new owner will also need to register the motor vehicle in their name, so you might want to remind them of this during the sale.
How to Protect Yourself When Selling a Car Privately
A private car sale can be stressful, and you might have concerns about prospective buyers and scams. It's possible to go through the whole process safely as long as you keep your wits about you.
Firstly, list the motor vehicle on quality websites and feel free to omit some identifiable details from the ad. Make sure you include contact information so that a buyer can contact you to learn more.
Don't be afraid to turn down a prospective buyer if something feels off. Trust your gut and don't go through with a transaction that feels odd. You should meet the buyer in person before transferring ownership of the car and going through with a sale.
Crucially, make sure the payment process is vetted. Request cash in hand or on-the-spot bank transfer. Do not accept a personal cheque, as there is a high chance of it bouncing. The buyer should be happy to pay you in a secure manner if they are the real deal.
Issuing a receipt is also a crucial step if you want to protect yourself, as it proves the purchase happened. Make sure both parties sign the bill of sale, and you should be good to go.
Final Thoughts
A car sale receipt is essential when selling your vehicle privately. It provides proof of payment that's useful for tax purposes, but it also protects you in the event of an emergency.
It can be helpful to use a template, but you can also write a receipt yourself. Follow all the steps in this guide to make sure you have everything covered and draft a watertight contract.
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FAQs
What Does It Mean to Sell a Car "As Is"?
A sale is "as is" if the buyer agrees to accept the car in its current condition. Including this in the contract puts the responsibility the buyer to thoroughly inspect the vehicle before issuing payment.
Is There a Difference Between a Sale Receipt and a Bill of Sale?
No, they are the same thing. A bill of sale is a generic receipt that refers to transferring ownership of any personal property. In the case of a motor vehicle sale, a car sale receipt is a detailed breakdown of the sale of a car. You may also hear a car sale receipt called a bill of sale, though.
What Else Should I Know About Selling a Car?
You can check out our full guide on selling a used car here. The most important steps are to ensure the payment is safe, generate a bill of sale, hand over all the relevant documents, and transfer ownership properly.
