How to Avoid Liability When Selling a Car

Selling a used car to another private party may open you up to claims of liability. Your buyer may accuse you of lying to sell a substandard vehicle that breaks down after it's sold, or of having knowledge of mechanical problems that were not disclosed and that later caused an accident. Allegations such as these will take you time and money to defend. There are steps that you can take to avoid claims of liability after a vehicle sale transaction.


Step 1

Make sure that your car is in running condition and that all important systems are repaired prior to advertising it. This will ensure that you are not aware of any major mechanical problems with the car.

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Step 2

Look up the current market value of your vehicle based on its condition. In order to price your car correctly, check its private party value on a site such as Kelley Blue Book (see Resource section).


Step 3

Place all pertinent information about your car in the ad that you write and be honest. Use an online service to list your vehicle. Sites such as allow you to buy an ad where you are able to give a detailed description of your car and post pictures. Explain any defects of the vehicle so that a buyer knows up front what the condition of the car is. This will help prevent an accusation of fraud later on.


Step 4

State in your ad that your car is being sold "as is," which means that the buyer has to accept it in its current condition.

Step 5

Show the buyer a vehicle history report on your car. One may be obtained for a fee from online sources such as CarFax or AutoCheck (see Resource section). The report should explain how many people have owned the car, if the title is salvaged (totaled), the accuracy of the odometer reading and if the car has been in any reported accidents.


Step 6

Encourage an interested buyer to test-drive the vehicle to help determine that it is in working order.

Step 7

Allow buyers to take your vehicle to their own mechanics. If it passes the inspection, then a buyer will be less likely to put the responsibility on you if the car breaks down after purchase.


Step 8

Complete a "Release of Liability" with your state Department of Motor Vehicles (DMV) or notify them by other means that you sold your car. This way, if the buyer neglects to transfer title in a timely manner, you will not be liable for any events that occur with the car.

Things You'll Need

  • Car history report

  • Title

  • Release of liability form

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