Selling a car for parts: how to write a parts-only bill of sale

A parts-only bill of sale is the document you use when a vehicle leaves your driveway on a flatbed and is never supposed to drive again. The buyer might be a scrap yard, a licensed dismantler, or a hobbyist who wants the engine and the doors. In every case the same problem sits underneath the deal: the car still has a VIN, the state still has a title record with your name on it, and if nobody retires that record, the vehicle can be reassembled, titled, and driven under your name. This guide covers the language to use, why the title or a junk certificate still matters, how to tell the state the vehicle is gone, and what the yards on the other side of the deal are required to do.

Say what the vehicle is, and what it is not

A standard vehicle bill of sale describes a working car sold for road use. A parts-only version needs three additions. First, a plain statement of purpose: the vehicle is sold for parts or scrap only and is not represented as roadworthy or operable. Second, an as-is clause covering all faults, with a note that the seller makes no claim about the condition of any component. Third, a line stating that the buyer will not operate the vehicle on public roads and understands that it may not be eligible for registration. Write the VIN, the year, make, and model, the price, the date, and both parties' names and signatures.

If the vehicle carries a salvage, junk, or nonrepairable brand on its title, say so on the bill of sale and copy the brand wording. If the odometer is broken or the reading is unknown, mark it as not actual mileage. These details protect you if the buyer later claims you sold a repairable car.

Why the title still matters

Ownership of a vehicle passes with the title, not with the bill of sale. That is true even when the vehicle is a shell. A scrap yard or dismantler that takes a vehicle without a title is, in most states, taking a vehicle it cannot lawfully process, and licensed yards will refuse the load or pay far less. Sign the title over to the buyer, record the buyer's name, and keep a copy. If the title is lost, order a duplicate before the sale. If the vehicle has already been declared a total loss, you may hold a salvage certificate or a nonrepairable certificate instead of a regular title, and that document transfers the same way.

California shows how the certificates work. The California Department of Motor Vehicles (DMV) handbook explains that a nonrepairable vehicle certificate is issued when a vehicle is a total loss with no expectation of repair, and that a nonrepairable vehicle cannot be titled or reregistered subsequent to issuance of the nonrepairable vehicle certificate. Ownership on that certificate may be transferred only twice, and no later certificate is issued. A salvage certificate, by contrast, allows the vehicle to be rebuilt, inspected, and retitled with a salvage brand. Which document you hold decides what the buyer can legally do with the car.

Notify the state so the VIN is retired

Handing over the title is not the same as telling the state the vehicle is gone. Most states have a form or online process for reporting a vehicle as junked, dismantled, or sold for scrap, and it is the single most important step for a seller. California requires it before the fact. The DMV handbook states that prior to dismantling a vehicle, the vehicle owner must submit an application to DMV to record the vehicle as Junk, and that an owner who dismantles first is subject to an investigative service fee. The owner surrenders the title and the license plates with that application. Vehicles transferred to be wrecked or dismantled are exempt from the smog inspection requirement, which removes one obstacle to closing the sale.

Other states use a release of liability, a notice of sale, or a junk certificate application that accomplishes the same thing. Whatever it is called, file it the day the vehicle leaves. Keep the confirmation. Cancel the registration and the insurance only after the state has recorded the sale, so a gap does not appear in your coverage while the car is still in your name.

What scrap yards and dismantlers must do

Licensed yards carry their own federal duty, and it works in the seller's favor. The National Motor Vehicle Title Information System (NMVTIS), run under the U.S. Department of Justice (DOJ), requires auto recyclers, junk yards, and salvage yards to report the vehicles they take in. The program's reporting page says all auto recyclers, salvage yards, and junk yards are required to begin monthly reporting of salvage vehicle data to NMVTIS on March 31, 2009, and the covered list runs to scrap shredders, scrap metal processors, pick-apart yards, salvage pools, and salvage auctions. Once a yard reports the VIN, the vehicle is flagged as junk or salvage in the federal database, and any later attempt to title it clean in another state will hit that record.

The program does allow limited exceptions, including for some yards handling fewer than five salvage vehicles a year, so a very small operator may not be reporting. That is one more reason to sell to a licensed dismantler when you can. Ask for the yard's license number and its NMVTIS reporting ID, and write both on the bill of sale.

Selling to an individual instead of a yard

A private buyer who wants the car for parts is a legitimate customer, but the risk shifts to you. Nothing stops that person from swapping in a transmission and driving the vehicle on your registration. Sign over the title, file the state's junk or notice-of-sale form, and make the parts-only language in the bill of sale explicit. If the buyer refuses to sign a bill of sale that says the vehicle is not roadworthy and will not be driven, that refusal tells you what the buyer intends.

Protecting yourself from later liability

The nightmare scenario is a vehicle you sold for scrap turning up in a hit-and-run, a toll violation, or an impound lot six months later with your name on the record. The defense is a paper trail with dates. Keep the signed bill of sale, a copy of the signed-over title, the state's confirmation that you reported the vehicle as junked or sold, and a photo of the vehicle on the truck with its plates removed. Remove the plates and either surrender them or transfer them to another vehicle according to your state's rule; California, for one, requires the plates to be surrendered with the junk application.

A parts-only bill of sale does not need a notary in most states, but if your state requires a notarized signature on any vehicle transfer, that rule applies here too. Our notarization checker will tell you. Sales tax is usually not owed by the seller on a scrap sale, but the buyer may owe use tax on the price paid; the vehicle sales tax calculator shows the state rule.

A short template for the parts-only clause

The wording that does the work reads like this: Seller sells and Buyer purchases the above vehicle for parts or scrap only. The vehicle is sold as-is, with all faults, and is not represented as operable, roadworthy, or eligible for registration. Buyer agrees not to operate the vehicle on any public road. Seller has reported or will report the vehicle to the state as junked or sold for parts. Add the brand, the VIN, and the yard's license and reporting numbers, sign it, and keep your copy.

Sources

• California DMV, Nonrepairable Vehicle Certificate
• California DMV, Junking a Vehicle, Individual
• NMVTIS, Who Must Report
• NMVTIS, National Motor Vehicle Title Information System