AUTOMOBILE RESPONSIBILITIES: Driving, Buying, and Selling Your Car
I. DO YOU NEED AUTOMOBILE INSURANCE?
II. WHAT ARE YOUR LEGAL RESPONSIBILITIES WHEN YOU ARE INVOLVED IN AN ACCIDENT?
III. ARE SAFETY BELTS REQUIRED IN CALIFORNIA?
IV. WHAT SHOULD YOU DO WHEN YOU BUY OR SELL A CAR?
This pamphlet, while not comprehensive, gives you some basic answers to these questions. If you have any further questions, contact the Department of Motor Vehicles (DMV) or an attorney regarding the specific facts of your case. This pamphlet is not a substitute for legal advice. (Revised 8/98)
I. DO YOU NEED AUTOMOBILE INSURANCE?
In California, every driver and owner of a car must have "financial responsibility." Usually, "financial responsibility" means that you must have liability car insurance. For proof of insurance, you will need the name of the insurance company and the policy number. You can write this on your car registration form or on a piece of paper that you keep with your driver’s license.
You do not need car insurance if you have one of the following:
- A deposit of $35,000 with the Department of Motor Vehicles (DMV).
- A surety bond for $35,000 from a company licensed to do business in California.
- A certificate issued by DMV saying that you have insured your automobile with your own money.
If you do not have financial responsibility for your car and the police stop you, you may have to pay a fine and your car may be taken away from you.
If you are in an accident and you do not have any of the above, you may lose your driver’s license for one year. However, you may continue to lose your license for three more years unless you file and maintain proof of insurance with the DMV.
If your driver’s license is taken away, you may apply for a restricted license that lets you drive to and from your workplace and during the course of your employment. To qualify, you must file proof of insurance with DMV and pay the appropriate fees.
For Example:
Driver A is just learning how to drive and hits Driver B’s parked car.
The damage to Driver B’s car is $750.00 and the damage to Driver A’s car is $500.00.
If Driver A does not have insurance, Driver A’s license must be suspended for one year.
If Driver B does not have insurance, Driver B’s license must be suspended for one year even though Driver B did not cause the accident.
A. TYPES OF INSURANCE COVERAGES
1. Liability insurance is required by law if your proof of financial responsibility is car insurance. Liability insurance will pay the other driver if you are to blame for an accident. It will pay for the person’s property damage and personal injuries up to the policy limit.
If the other driver is at fault and has liability insurance, his/her insurance will pay you for damage to your automobile and/or your personal injuries.
2. Collision insurance is not required by law and will pay for damage to your automobile. It does not pay for damage to the other driver’s automobile and anyone’s personal injuries.
3. Uninsured Motorist insurance is an insurance that is not required by law. Under certain circumstances, it will pay for damage to your car and/or for personal injuries caused by a collision with a driver who does not have insurance.
For more information about other types of insurance coverage, contact your insurance agent.
B. MINIMUM AMOUNT OF INSURANCE YOU MUST CARRY
If your proof of financial responsibility is car insurance, you must have the minimum amount listed below. If you do not and are involved in an accident, your license will be suspended.
The minimum amount of liability insurance you must have per accident is:
- $15,000 for a single death or injury.
- $30,000 for death or injury to more than one person.
- $5,000 for property damage.
C. OTHER REASONS WHY YOU NEED CAR INSURANCE
1. Law Suits. If you cause a car accident, the other driver may sue you for damages. If the other driver wins the suit and you don’t have insurance or your insurance policy does not cover all the expenses, the other party can legally collect the money during the next ten years, or longer (if they get an extension from the court).
If you do not have the money to pay the damages all at once, you may be able to pay the amount in monthly payments. But, if you refuse to pay the damages and you have money in the bank or other valuable property, the other party may get a court order to get money from your account or from the sale of your property.
If you have a job, the other party could also get a court order requiring your employer to give part of your earnings to the other party until all the damages are paid. Even if you do not have a job or money now, the other party can try to get their money at any time in the next ten years or longer.
II. WHAT ARE YOUR LEGAL RESPONSIBLILITIES WHEN YOU ARE INVOLVED IN AN ACCIDENT?
A. STEPS YOU MUST TAKE IF YOU ARE INVOLVED IN AN ACCIDENT.
1. Stop. You must always stop if you are involved in an auto accident, no matter how small the damage. If SOMEONE IS HURT, call the ambulance, police, or California Highway Patrol (CHP).
If you do not stop, you are guilty of "hit and run" and are subject to severe penalties. You can go to jail for as long as one year, be fined up to $10,000, or both. If the hit and run accident results in death or permanent serious injury, you could be sent to prison for 2-4 years.
2. Exchange information. If you have an accident with another car, do not admit fault. Talk to your insurance agent and/or attorney first. Before you leave, you must give your name, address, telephone number, driver license number, car license, registration card information, and proof of financial responsibility to the other driver. If insurance is your proof of financial responsibility, you must give the insurance company name and address as well as the policy number to avoid paying a $250 fine.
Be sure to get the same information from the other driver as well. Ask to see the person’s license and copy the information from both front and back. You should also exchange the year and make of each other’s automobiles. If the person does not cooperate, get the license number of the car.
If you hit a parked car or damage other property but cannot communicate with the owner because you cannot find him/her or there is a language problem, leave a note with your name, address, and explanation of the accident (and the name and address of the owner of the car you are driving). Leave the note with the owner of the property you damaged or put it where the owner can easily find it. Report the accident without delay to the police or CHP.
3. Report the accident to both the police/CHP and the DMV (see next section.)
B. REPORT THE ACCIDENT
1. Report the accident to the local police or the CHP. If an officer does not appear, you must make a report on a form obtained from the local police department or CHP within the following period:
- If someone is killed or injured, you must report the accident to the police or CHP within 24 hours of the accident
- If the accident caused only property damage and you cannot find the owner, you must make the report "without unnecessary delay."
2. Report the accident to the Department of Motor Vehicles (DMV).
- DMV Traffic Accident Report Form (SR-1)
Complete and file a "SR-1" with the DMV. If you do not, DMV will suspend your license until you file a SR-1 with DMV. You can mail the completed report to:
Department of Motor Vehicles
Financial Responsibility
Mail Station J237
P.O. Box 942884
Sacramento, CA 94282-0884
- You must report the accident to the DMV within 10 days if either of the following occurs:
- Property damage exceed more than $500 for any person, or
- Anyone is injured (no matter how slightly) or killed.
If you do not report the accident within 10 days, the DMV will suspend your license until you make the accident report or file a SR-1 with DMV. You must make this report whether or not you caused the accident and even if the accident occurred on private property.
3. Report the accident to your insurance company.
III. ARE SAFETY BELTS REQUIRED IN CALIFORNIA?
California law requires you to use safety belts if your automobile is a 1968 or later model car. You may not drive an automobile on the road if you and your passengers 16 years or older are not wearing safety belts. If you do so, you and your passengers (age 16 or older) may be given a traffic ticket for disobeying this law.
A child under the age of 6 or weighing less than 60 pounds must use a child safety seat, a booster seat or other safety restraint system.
IV. WHAT SHOULD YOU DO WHEN YOU BUY OR SELL A CAR?
A. BUYING A CAR.
1. Shop Wisely. Shop around. If you are not completely sure that you want the car:
- Do not sign a contract,
- Do not pay any money, AND
- Do not let the salesperson quickly force you to buy the car.
Be careful. Buying a car is not the same as buying something at the store. It is not easy to return a car, and it is likely that you will have to keep the car, even if you later decide that you do not want it.
B. WHEN YOU BUY A VEHICLE FROM A PRIVATE PARTY, THERE ARE THREE FORMS YOU MUST OBTAIN:
1. Obtain a Vehicle Transfer Form (Bill of Sale) the seller or the DMV. You must have the seller fill out the Bill of Sale which describes the automobile being sold and lists for how much it is being sold. The Seller and Lienholder (if one exists) must sign the slip. A "lienholder" is a person or company who has a claim on the car as security against the payment of the loan.
2. Get the Certificate of Title ("pink slip") from the previous owners. All the people whose names appear on the Registered Owner space must sign on the line marked "1" unless their names are joined by "or" in which case only one signature is needed. Include the date it is signed.
If a company or person is listed in the lienholder section, you must also get the lienholder’s signature (line "2"). A company name should also include a signature from an employee authorized to sign for the company.
If you lose the Certificate of Title, complete an application for Duplicate Title.
If the title you hold does not have a section provided for the odometer mileage reading or the section has been completed by a prior seller and buyer, you must complete a separate Odometer Disclosure Statement on the Vehicle Transfer Form. This form must be signed by the seller and buyer.
3. Get the Registration Card which is usually kept in the automobile. Check to see if the car’s registration is current or you might be faced with an unexpected late fee when you register the car with the DMV.
If you lose the registration card, apply for a duplicate by filling out an Application for Plates, Stickers, and Documents.
4. The seller should provide a Smog Certificate issued within 60 days.
C. WHEN YOU REGISTER THE VEHICLE AT THE DMV IN YOUR NAME, you will need:
- The Vehicle Transfer Form (Bill of Sale).
- The Certificate of Title.
- The Registration Card.
- The Smog Certificate.
Complete the back side of the ownership certificate and take this together will the other papers to the DMV. There you can expect to pay a small transfer fee.
D. WHEN YOU SELL YOUR VEHICLE:
Every person whose name appears in the Registered Owner space of the Owner Certificate must sign on line "1" unless their names are joined be "or" in which case only one signature is needed. Include the date you signed it. If you have a lienholder, that person or company signature is required, too by an employee who has authorization to sign for the company.
Give the buyer the signed Ownership Certificate, Vehicle Transfer Form, Registration Card, and Smog Certificate issued within 60 days.
Report sale or transfer to the DMV within 5 days. You should send a Notice of Release of Liability form to protect yourself when you sell your car from being sued in court resulting in the operation of the vehicle by the purchaser. If you do not notify the DMV, you might be charged with accidents and traffic violations that were incurred by the person to whom you sold the car.
E. TO PROTECT YOURSELF WHEN YOU SELL YOUR CAR from possible liability resulting from the operation of the vehicle by the purchaser, you should send a "Notice of Release of Liability" to the DMV. You will also need the buyer’s full name and address as well as the odometer reading at the time of transfer. You can obtain this form from the DMV and send it to:
Department of Motor Vehicles
P.O. Box 942859
Sacramento, CA 94259-0001
