What to do if I’m the owner of a vehicle that someone is paying me for but I don’t want to sign over ownership until if is paid off?
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What to do if I’m the owner of a vehicle that someone is paying me for but I don’t want to sign over ownership until if is paid off?
My insurance company told me that the person buying my vehicle cannot insure something that they don’t own. I guess that I can put them on my policy as a driver but if something happened that went over my insurance amounts, is there any legal way that I can protect myself against getting sued if this was to happen?
Asked on January 21, 2014 under Accident Law, Maryland
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 10 years ago | Contributor
If you still own the car and they get into an accident and were at fault, if the amount of the loss exceeds your insurance, you *will* be personally liable, as the owner of a car is always liable for the damages caused by an at-fault driver they allowed to use the car. You are much better off selling them car, but retaining a security interest in it--that is, the right to repossess the car if buyer defaults on any payments. An attorney can help you draw-up and file the proper paperwork. If the value of the car/amount of the sale is too low to justify hiring an attorney to do some paperwork, then just sell him the car and be prepared to sue him in small claims court for the money if he defaults.
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