Understanding Liability After Selling a Vehicle: What You Need to Know
Selling a vehicle can be a straightforward process, but complications sometimes arise that can leave the seller feeling uncertain about their legal responsibilities. Recently, a situation has come to light where an individual sold a car, provided proof of the sale, and yet is being pursued for damages related to an incident involving the vehicle.
The Scenario
A vehicle owner sold their car and successfully signed over the title, also securing official proof of this transaction, such as a Release of Liability. Despite this, the new owner got into an accident, was involved in legal trouble, and—shockingly—there’s a bill of over $12,000 from a collection agency for damages.
The original seller has expressed concern: Is this legal? Could they still be held responsible despite having sold the vehicle and taken appropriate steps to notify authorities?
Key Details
- Proof of Sale: The seller has signed the title and has official documentation indicating the transfer of ownership.
- Notification of Transfer: The seller submitted a Release of Liability to the DMV, confirming they are no longer the vehicle’s owner.
- Third-party Involvement: The new owner was involved in an accident and was arrested. A police report confirms they were the registered owner at the time.
- Debt Collection: The collection agency, AFNI, is pursuing the seller for damages caused during the incident.
Is the Seller Still Legally Responsible?
In most jurisdictions, once ownership has been properly transferred and the seller has submitted a Release of Liability to the DMV, they are typically protected from liability related to subsequent incidents involving the vehicle. However, miscommunications or delays in processing paperwork can sometimes complicate this.
What Can Sellers Do to Protect Themselves?
- Ensure Proper Documentation: Always complete the title transfer and submit a Release of Liability promptly after selling the vehicle.
- Retain Records: Keep copies of all paperwork, including the signed title, proof of notification to the DMV, and any correspondence related to the sale.
- Follow Up with Authorities: Confirm that the DMV has processed the transfer and that your name is removed from the registration records.
- Communicate with Collection Agencies: If contacted by collections, provide copies of the sale documentation and official proof of transfer.
Legal Perspective
While laws vary by state and country, generally, once the sale is finalized and documentation submitted,
