Understanding Liability After Selling Your Vehicle: What You Need to Know
Selling a car is a significant transaction that requires proper documentation to protect yourself from potential liabilities down the line. Recently, several individuals have encountered confusing situations where they sold a vehicle, but unforeseen incidents led to legal and financial concerns. Here’s what you should understand to safeguard yourself when transferring ownership of your vehicle.
The Importance of Proper Documentation
When selling your car, always ensure you receive and retain a signed title (or pink slip) to confirm the transfer of ownership. Additionally, completing a Release of Liability form and submitting it to the DMV or relevant authorities is crucial. These steps officially notify the state that you are no longer responsible for the vehicle, including any incidents involving the vehicle after the sale.
Case Study: Unexpected Financial Liability Post-Sale
Consider a scenario where an individual sold their vehicle, signed over the title, and submitted a Release of Liability. Despite this, the new owner was involved in an accident with an uninsured driver. Subsequently, a collection agency or insurance company—such as AFNI—begins demanding substantial payment for damages caused by the new owner, even though the original seller had no ongoing ownership or responsibility at that point.
Legal and Practical Implications
In cases like these, if you have documented proof that you sold the vehicle and properly released liability, you generally aren’t legally responsible for damages incurred after the sale. However, complications can arise if the DMV or authorities did not update the vehicle’s registered owner information correctly or if old ownership details are still linked to the vehicle’s records.
What About Liability for the Seller?
Generally, once the title has been transferred and the Release of Liability submitted, the seller’s legal responsibility ends. Nevertheless, it’s important to verify that all paperwork was correctly processed and that the DMV has updated their records. If there are discrepancies or delays, you may need to provide documentation to demonstrate you are no longer the owner.
Advice for Vehicle Sellers
- Always sign and hand over the title directly to the new owner.
- Complete and submit a Release of Liability immediately after selling.
- Verify at the DMV that your name has been removed from the vehicle’s registration.
- Keep copies of all documents related to the sale, including the signed title, proof of submission of the Release of Liability, and any correspondence.
Conclusion
While selling a vehicle can shield you from future liability, it’s essential to follow proper procedures diligently. If you find yourself contacted about damages or debts after selling a car
