Release of Liability
When you sell a vehicle as a private party, you'd be at risk if the buyer was to keep the vehicle titled and registered in your name and get in an accident. That's why, as a seller, it's important to create a bill of sale, transfer the vehicle's title, and cancel your car insurance policy after the vehicle is officially out of your possession.
Most importantly, your state's Department of Motor Vehicles (DMV), Motor Vehicle Administration (MVA), Department of Revenue (DOR), Secretary of State (SOS), or county clerk's office may require you to (or give you the option to) file a release of liability or notice of transfer form.
When there is change in ownership with your vehicle, you may need to notify your local DMV office. This is often referred to as a release of liability or notice of transfer.
Since most states require some form of notification within a certain number of days after a vehicle sale, you’ll need to handle this task in a timely manner. For more details about the requirements in your state, read our page about Paperwork When Selling a Car.
Submitting a release of liability could potentially save you time, money and hassle. For instance, let’s say you recently sold your vehicle and transferred the title to the new owner. If he or she has any traffic violations or collisions while the vehicle is still registered under your name, you could be responsible for paying all related costs.
Even if you currently live in a state that does not require a post-sale notification, it’s still wise to notify your motor vehicle office or county clerk’s office anyway.
NOTE: In addition to submitting a release of liability (or a “sold notice form”), your state’s DMV may also request you to surrender your license plates.
How to Release Your Liability on a Vehicle
NOTE: Be sure to submit your release of liability before canceling your car insurance as you could face legal proceedings under certain circumstances.
Depending on your state of residence, you may be able to submit a release of liability form (i.e., “notice of sale”) in the following ways:
- By mail.
- In person at your local motor vehicle office.
Generally, you'll be asked to provide the following information on a release of liability or notice of transfer form:
- The vehicle's license plate number.
- A description of the vehicle make, model, color, and year.
- The vehicle identification number (VIN).
- The date of the sale or title transfer.
- The odometer reading at the time of the sale or transfer.
- The name and contact information of the new owner.
- Your name and contact information.
Since each state will have its own requirements for a release of liability, please contact your local motor vehicle division to get specific details.
First, you'll need to check whether the release of liability is a state requirement.
If you’re required to submit a release of liability, you can generally download the form online or pick one up in person. For more information, you can also read our section about required paperwork when selling a car.
If you have any further questions about where to obtain a release of liability or a notice of transfer form, please contact your state's DMV, MVA, DOR, SOS, or county clerk's office.