when to drop insurance when selling a car

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Feb 27, 2016

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Insurance Question from Columbus, IN

Asked on 02/27/2016

when to drop insurance when selling a car We sold a car for $600 to an individual, gave a bill of sale, signed the title and gave it to her husband. The registration and plate are still in and on the car. They can't get to the BMV until Tues and we are not sure they even will go then. Shouldn't we have kept the registration with us, and shouldn't we drop the insurance we have on it beginning Monday? I am concerned that we are still liable and still officially own the car; because it is officially registered to us.

Answer given on March 12, 2016

If you sell your auto and have been provided with the full payment of the car, you would have to give the title to the buyer. Without it, they could not go out and re-register it.The best advice is to send a letter to the DMV with the vehicle identification number and license plate number advising them that you sold the car and provide them with the date of sale. That will absolve you of any liability on the car. You should also tell the buyer that you have done this. It may inspire them to get the car registered sooner than later. After you have sent the letter, call your insurance company and tell them the car is sold and you can use the original date of sale. You will then get a refund of any unused premium for that car. However, if it leaves you with only one car, you will probably lose your multi car discount, which would affect the insurance cost on the remaining car.

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