Understanding Liability After Selling a Vehicle: What Sellers Need to Know
Selling a car involves more than just handing over the keys — it requires proper documentation and clear communication to protect yourself from future liabilities. Recently, I came across a situation that highlights the importance of understanding your responsibilities post-sale, especially when unforeseen incidents occur.
Case Overview
A vehicle owner successfully sold her car and provided the necessary documents, including the signed pink slip and proof of liability release. Despite this, a few weeks later, she received a notice from collections agency AFNI stating she owes approximately $12,000 for damages stemming from an accident involving the vehicle. The troubling part? The new owner had been involved in an incident, was arrested, and apparently lacked insurance coverage.
Key Details to Consider
- The owner had sold the vehicle and submitted a Release of Liability to the DMV, which confirmed her no longer owns the car.
- She also shared the police report indicating the new owner was the registered owner at the time of the incident.
- The DMV confirmed she is no longer listed as the vehicle’s owner.
- Yet, AFNI’s notice suggests she is financially responsible for damages caused after her sale.
Legal Implications
Is it lawful for a collections agency to seek payment from a seller after they have properly transferred ownership? Generally, once you have transferred ownership and submitted a Release of Liability, you are typically protected from liability for incidents involving the vehicle after sale. However, the specifics can vary by jurisdiction and circumstances.
In this scenario, the critical factor is whether the seller’s documentation proves that they relinquished ownership before the incident. Given that all proper steps were taken—signed title, liability release, and DMV confirmation—it strongly supports the argument that the owner is not liable.
Advice for Vehicle Sellers
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Always Certify Proper Sale Completion: Keep copies of the signed title transfer and proof of liability release. Submit these to your state DMV and keep records.
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Notify your Insurance Company: Even after selling, confirm that your insurance coverage is canceled or transferred to avoid any unintentional exposure.
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Stay Informed about Your State’s Laws: Liability transfer procedures can differ, so understanding local regulations helps in protecting yourself.
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Respond Carefully to Collections Notices: If you receive a bill for damages after the vehicle’s sale, review your documentation and consider consulting a legal professional to determine your liability.
Final Thoughts
Selling a vehicle, when done properly, should safeguard
