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A bill of sale is not always required when selling a car; its necessity varies by state or country. It benefits both seller and buyer by protecting against fraud, settling disputes, and confirming payment. However, it functions primarily as a receipt and does not establish ownership. Key components of a bill of sale typically include the transaction date, names and addresses of the buyer and seller, a description of the vehicle, and its VIN number. Some states may require the bill to be notarized or submitted for processing.