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When you sell or give away a vehicle, having a release of liability means you’re legally off the hook for the new owner’s parking tickets, traffic violations, towing charges, accidents, or anything else related to the vehicle from that point forward.
Rules vary, but many states require that you file a release of liability form for a vehicle soon after you sign the title over to a new owner.
Here’s what to know about releasing liability, why it’s important, and how to handle car insurance in the process.
Read more: How does car insurance work? The basics explained.
What is a DMV release of liability form?
A release of liability form notifies the state that you’re transferring ownership to someone else and are no longer responsible for the vehicle. You may need it when you’re selling a vehicle, donating it to an organization, trading it in at a dealership, or giving it to a friend or family member.
Some states simply call the form a “vehicle sale notification” or report. California calls it a “notice of transfer and release of liability” form.
When the form is required, you submit it to the department that handles vehicle titles and registration. In most states, that’s the Department of Motor Vehicles, or DMV. In others, the department goes by a different name, such as the Bureau of Motor Vehicles in Indiana, Maine, and Ohio. Hawaii doesn’t have a state DMV; each county has its own department for vehicle registration.
Learn more: Minimum car insurance requirements in all 50 states
Why is a release of liability form needed?
The release of liability form does not finalize the transfer of ownership. You still need to complete a bill of sale and sign the title over to the new owner, and the buyer must complete the required paperwork and pay any associated fees to assume ownership.
The point of the release of liability form is to let the state know about the ownership change, so the date of sale can be added to the vehicle record and shared with law enforcement. This protects you in the event that the buyer doesn’t promptly do their part to transfer ownership. The official notification to the state ensures that you don’t get registration renewal notices or are held responsible for parking tickets, violations, or other penalties involving the vehicle.
Release of liability form vs. bill of sale
A release of liability form does not replace a bill of sale for a vehicle.
A bill of sale is a receipt of the transaction signed by the buyer and seller. The document provides information about the buyer, seller, vehicle, and sale price. Some states require a bill of sale, and some require that it be notarized.
Regardless of state requirements, it’s a good idea to complete a bill of sale to serve as proof of the transaction.
Check with your state’s motor vehicle department to get a bill of sale form. Some states will let you create your own bill of sale, but will still offer an official form to use. If your state doesn’t require and offer a specific form, you can buy a template online or at an office supply store.
Create a free, state-specific “bill of sale" form here
How to submit a release of liability form
Check your state’s requirements for selling a car to learn how to submit a release of liability form. The rules vary. For example:
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California requires submitting a “notice of transfer and release of liability” form within five days of selling or transferring the title to someone else.
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In Colorado, you have the option to submit a release of liability form within five days of the sale.
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In Florida, you must file a notice of sale form (called HSMV 82050) with a motor vehicle service center within 30 days to avoid a late fee.
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In Texas, you’re released from liability for the new owner’s parking tickets and toll violations if you file a “vehicle transfer notification” within 30 days of the sale.
Selling or trading in a car
Whether the dealership files the notification on your behalf varies. For example:
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In Texas, the vehicle will stay in your name until the dealer sells it to someone else, which could take months, so you should file a vehicle transfer notification to protect yourself.
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In Washington, a registered dealer can file the report of sale, but it’s still your responsibility to make sure that it’s submitted.
The information you’ll need
In many states, you can fill out the release of liability form online; it takes only a few minutes. Here’s the information you’ll generally need:
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Your name and address
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The new owner’s name and address
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Vehicle make, model, and model year
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The license plate number and vehicle identification number
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The odometer reading as of the sale date
Release of liability and your car insurance
Don’t remove your car insurance on the vehicle until you’ve signed over the title and released your liability. Once you’re free and clear, contact your insurer to cancel your car insurance coverage on that vehicle. If you buy a replacement car, you can add that to your policy and remove the vehicle you let go.
If you don't buy another car and plan to go without a vehicle, consider a non-owner car insurance policy, which provides coverage whenever you borrow a car. A non-owner policy will prevent a lapse in coverage if you decide to buy or lease a car down the road. If you have a coverage lapse, you’ll likely pay higher rates when purchasing a new policy.
Amy Danise and Tim Manni edited this article.
