Risk For Not Changing Vehicle Title Right Away

Risks for Not Changing Your Car Title Right Away

Risks for Car Sellers: So what are the risks for not changing your car title right away? This is a risk for both car sellers and buyers of a vehicle. First, for sellers, if you sell your car and you hand somebody the title to the car, just sign it and don’t put their information, you have liability because that person now can do anything with that title with your signature. Even if you fill in their name as the buyer, you don’t know when they’re going to transfer it to their name and get a new title indexed by the DMV. In that time, when it’s still in your name, you have liability. You could be liable for damage if they crashed the car and damaged another vehicle. It could be injury to a person if the car is involved in a crime, even tickets and infractions. If they get a parking ticket or they get some kind of moving violations and they don’t pay, that VIN number of that car is going to come back to you, and those infractions will come back to you until they put the new title in their name. So you want to make sure that if you’ve sold a car that you also, in a very short period of time, fill out a form at the DMV disclaiming ownership of that car. You can put the name of the person who bought it, or you can just say you sold it. That way, that VIN number is removed from your name.

Risks for Car Buyers: What about for a buyer? If you buy a car and get a title and don’t transfer it to your name right away, a couple of things can happen. First of all, if you lose that document, you have a risk because you can’t go down to the DMV to get a duplicate. Only that person printed on the front of the title can get a duplicate, so it can be very hard to do. Also, if there are any claims against that seller, if the seller gets sued, if they get divorced, if they file bankruptcy, any one of those claimants or creditors is going to look to see what assets they have. They’re going to find that car listed as an asset because it’s still in their name. They’re going to try to obtain that car and seize that car because it’s still in their name, and you have to prove otherwise. And if you lost the title or you can’t show that you paid for it, you might have to go to court and fight. That could cost money.

Proof of Ownership and Insurance Issues: You also don’t have proof of ownership of that vehicle. So if it gets towed or somebody damages it or something else happens to the vehicle where you have to prove it’s yours, you don’t have that; you just have a title signed over to you. If you put any money into the car, if you fix it up, put new brakes on, put a new engine in it, new paint job, all that money is at risk until the car belongs to you. It doesn’t belong to you until you have that title printed in your name. In some states, you also cannot get insurance to cover the car until you can show them a title. If that’s the case, you have the risk of damage to the vehicle. Even in states where insurance automatically covers a vehicle when you buy it, the insurance company might have a defense against a claim if you don’t have the car put into your name. So be aware that as a buyer and a seller, you have a risk until that title is transferred legally to the person who actually has purchased it.

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