Understanding Liability After Vehicle Sale: What You Need to Know
Selling a vehicle can sometimes lead to unexpected legal and financial complications, especially if the new owner encounters trouble on the road. Recently, a situation has arisen where a car seller received a notice from a collections agency demanding payment for damages caused in an accident involving a vehicle that had already been sold. Such cases highlight the importance of proper documentation and understanding your legal responsibilities as a seller.
Case Scenario: When Selling a Vehicle, Documentation Is Key
Imagine selling your car and promptly signing over the title, along with obtaining a formal Release of Liability. This document officially notifies the DMV and relevant authorities that you are no longer responsible for the vehicle. In one instance, the seller provided proof of the signed pink slip and release of liability to the collection agency, AFNI, after the vehicle was sold.
Unexpectedly, the new owner was involved in an accident, lacked insurance, and subsequently caused damages. AFNI contacted the former owner, claiming they owe a substantial amount—$12,000—for the damages, despite the seller having transferred ownership before the incident.
Legal Implications and Responsibilities
This situation raises critical questions about the legal responsibilities of vehicle sellers once ownership has been officially transferred. Generally, once the DMV processes the title transfer and the seller provides a release of liability, they are shielded from future liabilities related to the vehicle. However, some entities may still attempt to pursue the former owner, especially if the proper documentation is not thoroughly maintained or if other procedures were not correctly followed.
In the case of the daughter-in-law who sold her vehicle, she took the right steps by notifying AFNI and informing them that she was no longer the owner. She also visited the DMV, which confirmed that her name was removed from the vehicle’s registration. These actions strengthen her position that she is not responsible for damages or debts incurred after the sale.
Can You Be Held Accountable After Selling Your Car?
Generally speaking, if you have completed the sale correctly—signing over the title, submitting a release of liability, and informing relevant authorities—you should not be held liable for accidents or damages caused by the new owner. Nonetheless, issues can arise if the transfer process was not properly documented or if the vehicle was sold outside the legal guidelines.
Best Practices for Vehicle Sellers
- Always sign and date the title transfer to formally document the sale.
- Submit a Release of Liability form to the DMV immediately after completing the sale.
- Keep copies of all documents related
