In most states, you can revoke or cancel your bill of sale for an automobile due to two key statutes.
Reverse Buyer's Remorse
The first is a form of “reverse buyer's remorse” where you have three business days in which to cancel or revoke the bill of sale for an automobile or where your customer can do the same thing.
If you know of a condition that renders the vehicle unsafe to drive, you must, by law, either inform the customer of this condition and then offer to repair it or take it back. You, as the seller, are covered by the same laws as any dealer of a used car whether you have the shingle in front of your home or not. You must list all of the automobile's issues on your car bill of sale template.
Poor Condition of the Car
If the condition is too bad and the customer demands their money back, then you must return it to them. In general, just about all 50 states have certain minimum roadability/drivability requirements for a vehicle.
The vehicle's brakes have to work, the engine has to work correctly, as does the transmission, and the body has to be in good shape. For example, today's cars are equipped with dual hood latching. The first is the one that holds the hood in place during normal highway driving, and the second is the safety. The one that holds the hood in place should be the primary latch fail. If you knowingly sell a vehicle in bad condition without disclosing it to the buyer, then you might run afoul of the state's consumer laws and the attorney general's office, which is not an especially pleasant thought.
Before you sell your car be sure you have it looked at mechanically so you know it is in good shape and you won’t have to cancel or revoke the bill of sale for your car. In general, the solution to this is you would simply void the bill of sale by tearing it up.