Situations to Use Bill of sale for a Car

Transfer of Ownership: The primary purpose of a bill of sale is to document the transfer of the vehicle from the seller to the buyer. It helps establish the buyer as the new owner in official records.
Registration and Title Transfer: Most jurisdictions require a bill of sale for registering the purchased vehicle and transferring its title to the new owner's name.
Tax Purposes: When reporting taxes, some regions require individuals to report the purchase or sale of a vehicle. The bill of sale can be used to determine the amount of sales tax due or to establish the value of the vehicle in such tax-related scenarios.
Legal Protection for Both Parties: A bill of sale provides evidence of the transaction's terms and conditions. This can be especially useful if disputes arise later, such as disagreements over the sale price, the condition of the vehicle, or the date of sale.
Selling Without Warranty: If a car is sold "as is" (without any warranties), a bill of sale can include this detail, protecting the seller from future claims or liabilities related to potential defects or problems with the vehicle.
Determining Date of Ownership: In cases where the vehicle incurs fines, violations, or is involved in an accident after the sale, a bill of sale can establish the exact date when the responsibility shifted from the seller to the buyer.
Personal Records: Both the buyer and the seller might want a record of the transaction for their files. A bill of sale provides a formal document detailing the sale's specifics.

Given the importance of the bill of sale in vehicle transactions, it's always recommended to use one when buying or selling a car. Ensure that the document includes all necessary details, such as the vehicle's description, VIN (Vehicle Identification Number), sale price, names and signatures of both parties, date of sale, and any specific terms or conditions. Some jurisdictions also have specific requirements or formats for the bill of sale, so it's beneficial to check local regulations or consult with a legal professional.