You’ve grown tired of your current ride and you’re ready to get something else. You shop around and find a car you like, but you’re not happy with what you’re being offered for trade. You think, “I can get more money by selling this outright.” Happens every day, right? Be careful.
If you elect to do this, make certain to document the sale. Although not always possible, it is a good idea to meet the buyer at the Bureau of Motor Vehicles to sell your car. You hold the title and you want to make certain the vehicle is titled in the new owner’s name. Meeting at the BMV can allow this as soon as the transaction is complete.
The buyer will need to transfer the title in order to sell the car, title it in another state, obtain insurance or other tasks. If the buyer fails to properly transfer ownership records, you as seller may be subject to burdensome calls after the fact.
Why is this a big deal?
Consider this: The buyer takes the title you have given in exchange for the price paid and fails to have the title placed in his or her name.
If the title is not transferred and the vehicle is involved in an accident – or worse yet used in a crime – the authorities could contact you, the still registered owner.
If meeting at the BMV is not possible, document the sale and transfer of ownership. At a minimum, prepare a Bill of Sale to document the selling price, mileage and that you sold the vehicle “as is.” Make certain you and the buyer each have a signed copy to prove transfer of ownership.
Also, it’s not a good idea to allow the buyer to keep your license plates on the vehicle. You may never see them again. If the plates are not expired, depending on where you live, you may be able to use them on your replacement vehicle. Also, because the plates are registered to you, if the buyer is in an accident, commits a crime or commits a traffic violation, you could be listed as the owner of the vehicle. Keeping your plates is one more step to document the sale and eliminate any questions of ownership.
Finally, remember to call your insurance agent to remove the car from your policy. If you don’t replace it, take the car off your policy promptly to get as much premium returned as possible. If you do replace it, report ownership of your “new to you” car as soon as possible. Your independent insurance agent will work with you to assure the appropriate coverages are added to your vehicle.
This loss control information is advisory only. The author assumes no responsibility for management or control of loss control activities. Not all exposures are identified in this article. Contact Landmark Risk Management & Insurance for coverage advice and policy service. Neither The Cincinnati Insurance Company nor its affiliates or representatives offer legal advice. Consult with your attorney about your specific situation.