Is There a Difference Between Release of Liability and Notice of Transfer?

Be sure you buy and sell cars safely to avoid liability, fees, and other issues. Depending on your state, you may need to fill out a release of liability or notice of transfer form for your local Department of Motor Vehicles (DMV). Learn about a DMV release of liability and notice of transfer today for the safe buying or selling of a car in your state.

While the document used to inform the DMV of a vehicle transfer comes with two different names, a DMV release of liability and notice of transfer perform similar functions. Both are required in select states to legally sign over a title when working with a private seller.

In some cases, a legal release of liability form isn’t required. Some states only require you to inform them of the title transfer with a title transfer notice. In these states, there is a difference between the two terms. These cases require a title transfer notice. A release of liability is only needed if the former owner receives tickets, tax documents, or other information after the title was legally transferred.

A release of liability is a more general term for a legal agreement between two parties. People often sign this type of agreement for situations unrelated to buying or selling a car. If you’re selling a vehicle privately, be sure to use the correct release of liability form for your state rather than a generic liability waiver form.

A seller must inform the state DMV or other applicable office regarding the transfer of a vehicle. If you fail to tell them, you may still be considered the vehicle's legal owner. This action is particularly important for auto insurance and liability purposes.

When you fail to fill out the form and the buyer gets into a car accident or receives a ticket, you may be legally responsible for paying those expenses. You may receive an unexpected ticket if the driver of your previous vehicle flees the scene or is at fault in a collision.

Make sure you aren't responsible for an accident you didn't cause. Avoid these and other issues by following state-mandated steps to notify the DMV and release your liability lawfully. When you receive funds and transfer a title to the new owner, it's your responsibility to fill out and send the form to the DMV, Department of Revenue, or other relevant offices.

Fill out your DMV release of liability correctly to avoid delays and legal issues as you safely and securely buy or sell a used vehicle from a private party. The information you need to fill out this form can vary by state. The California release of liability form, for example, requires this information:

• New owner’s name
• New owner’s address
• License plate number
• Vehicle Identification Number (VIN)
• Vehicle odometer reading at the time of the sale

Always check with your state-specific requirements before filling out this form. In New York, for example, you must also fill out a damage disclosure form.

A release of liability is the legal document that passes liability from one owner to the next. There are several other steps to successfully close the sale with another private party. Whether you’re the buyer or seller, be sure you have arranged all these steps to ensure a smooth transfer process:

• Proof of identification for buyer and seller
• Original title
• Signatures for buyer and seller
• Valid emissions test or vehicle present to perform a test at the time of transfer, if required by your state
• Signed and dated bill of sale, if required in your state
• Proof of valid insurance in the name of the new owner
• Payment transfer through a secure process

Most states require you to pay title transfer fees. The buyer generally pays these fees. Some states charge a set price, while others are based on the vehicle's value. Review your situation before filing a title transfer. Costs can vary if the sale is for a family member or gift.

Are you overwhelmed by all the forms, signatures, and fees required? Navigate the process with a technology-driven solution. You can use electronic signature technology and ID verification features found on a dedicated automotive listing platform to streamline the process and reduce the risk of errors.

Reviewing all the necessary documents can be stressful and time-consuming. Thankfully, PrivateAuto makes it easy to complete the DMV release of liability, e-sign documents, and verify the buyer's or seller's identity. See how a simplified private sale works, and use PrivateAuto to buy or sell your next car today.