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A bill of sale is not always required when selling a car, as this depends on the state or country. It serves to protect both the seller and buyer by reducing fraud, settling disputes, and facilitating transactions, acting as proof of purchase rather than a contract. However, it does not prove ownership of the vehicle. Essential elements of a bill of sale typically include the transaction date, the names and addresses of the seller and buyer, a description of the vehicle, and the VIN. Some states may require the bill of sale to be notarized or submitted to authorities.