Author Topic: insurance ? during private party sale of a newer car  (Read 2530 times)

DeltaBond

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insurance ? during private party sale of a newer car
« on: December 29, 2014, 09:34:56 AM »
Since I'm pondering selling my newer car to a private party, if anyone else here has done that, what was the procedure in regards to the insurance.  HondaFinance will mail the title to the new owner or financial institution, which takes ten days, also in waiting for checks to clear - when you hand those keys over to the new owner, how do you go about making sure they have insurance and if something were to happen to the car, I'm not liable?

I know, this is tedious, but might end up very important.

Thank you in advance for thoughts and experiences you can share :D

GizmoTX

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Re: insurance ? during private party sale of a newer car
« Reply #1 on: December 29, 2014, 09:49:21 AM »
I assume you will not hand over the keys until the check clears, & that you will give the buyer a bill of sale. Cash is better. Meet in a bank to do the exchange. Then contact your insurance company to remove the car from your policy. See if your state has a form to file that states you are no longer the owner; this protects you from liability, toll charges, parking fees, etc.

JLee

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Re: insurance ? during private party sale of a newer car
« Reply #2 on: December 30, 2014, 07:04:00 AM »
I assume you will not hand over the keys until the check clears, & that you will give the buyer a bill of sale. Cash is better. Meet in a bank to do the exchange. Then contact your insurance company to remove the car from your policy. See if your state has a form to file that states you are no longer the owner; this protects you from liability, toll charges, parking fees, etc.

That's not always realistic, as then the buyer is entrusting you with "their" vehicle until the bank decides the check has cleared (my credit union took two weeks to release the title to the buyer of my last car).

If you are concerned about an incident occurring post-sale that would somehow get pinned on your insurance company, I would consider waiting a week or so after the sale before contacting your insurance company to drop the vehicle. Call them and say it was sold on X date (whenever the bill of sale is dated) and see if they will retroactively cancel the policy. Progressive has done this for me before (I had borrowed a vehicle, put insurance on it, and canceled later than I needed to - they voluntarily back dated it for me so I didn't have to pay for coverage I didn't need).

DeltaBond

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Re: insurance ? during private party sale of a newer car
« Reply #3 on: December 30, 2014, 07:23:01 AM »
Thank you both for your input.  I think there's a good way to avoid this altogether, though.  Either bring their cashiers check to my bank and make sure its good, OR go with the buyer to their bank and just get cash.  At that point, do a bill of sale and notorize it at that bank (keep the original, give them a copy) then after paying the car off with HondaFinance call and cancel the insurance.  I had to make a few calls to learn this, but I think it will be a lot less stressful this way.  We'll see if I even get any bites, though.

JLee

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Re: insurance ? during private party sale of a newer car
« Reply #4 on: December 30, 2014, 07:46:29 AM »
Thank you both for your input.  I think there's a good way to avoid this altogether, though.  Either bring their cashiers check to my bank and make sure its good, OR go with the buyer to their bank and just get cash.  At that point, do a bill of sale and notorize it at that bank (keep the original, give them a copy) then after paying the car off with HondaFinance call and cancel the insurance.  I had to make a few calls to learn this, but I think it will be a lot less stressful this way.  We'll see if I even get any bites, though.

In that case you will likely want to go to their bank (or have funds wired to your account). You may have better luck than I, but my credit union advised they had no way to confirm that the bank check they received from my buyer was good so they held the title for two weeks.

DeltaBond

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Re: insurance ? during private party sale of a newer car
« Reply #5 on: December 30, 2014, 07:49:09 AM »
Yeah, I'd only go to my bank with a cashier's check.  I'd go to their bank, preferably.