Liability of gifting car
September 30, 2019 7:27 PM   Subscribe

I have an older (early 2000's) model car I'd like to gift my nephew. I'm concerned that I could be opening myself up to a liability, should the car be in an accident and/ or a mechanical failure is found. More inside.

To me, a non mechanic, the car runs fine. I just had the 200,000 mile inspection and it passed. I've tried to keep up with routine maintenance and recalls. However, it's an old car, and things fail.

I'm in California, nephew is in Texas. Assume I am already planning on doing due diligence with: a mechanical inspection in both CA and TX, ensuring correct title transfer, drawing up paperwork that this is an "as is sale," disclosing any accidents (one hit and run that left damage to the door, and some fender dents,) any major maintenance, and making sure there are no gaps in insurance coverage.

My questions are: 1). Am I opening myself up to liability by gifting this car?
2). Would it be a good idea to make a spreadsheet of the major maintenance? I generally have a "nothing incriminating in writing" rule, but I think it could be helpful.
3). Is this just my anxiety and tendency to catastrophize making me spin out?
4). Anything I'm missing, due diligence wise?

I'd like to do this because I love my nephew and the car has sentimental value to us, and all parties would like to see it stay in the family.
posted by Pretty Good Talker to Law & Government (15 answers total) 1 user marked this as a favorite
It's a car with 200k on it. It's going to have a mechanical failure sooner or later. It might even be in an accident. You need to disassociate yourself from the sentimental value here and decide if you want your extremely used car to go to your nephew. What are you hoping to get out of it? What is he hoping to get out of it? If he just needs a daily driver, maybe this isn't the right car. If this is some kind of super special car where you expect it to keep running and stay as pristine as possible for a long time, maybe the nephew isn't the right new owner?
posted by BlahLaLa at 7:44 PM on September 30, 2019

> Am I opening myself up to liability by gifting this car?

Why would this even be a concern? In every state I know of, when a car is sold or transferred, the buyer is responsible for using it and the seller is not, so long as the registration paperwork was properly done.

No one buying a 200K vehicle expects it to be in prime condition.
posted by megatherium at 7:46 PM on September 30, 2019 [15 favorites]

We used to sell it to them for $1, on the paperwork, and then after they get it, their insurance company would cover them. And since you "sold" it, it's their responsibility. If it bites the dust, not your fault. It's a mechanical machine, don't overthink it.
posted by Marie Mon Dieu at 7:48 PM on September 30, 2019 [3 favorites]

I hope you don’t mind if I provide my answers to your questions in reverse order.

4. You’re missing the fact that you are giving someone a gift worth thousands of dollars, and you are instead focusing entirely on what disaster your nephew could cause with your gift.
3. You are absolutely catastrophizing a very simple situation. I think you are very much “spinning out”.
2. I have bought, sold, and gifted many used cars. I have never, ever, ever seen a spreadsheet. One is considered lucky to get decent tires. A freaking maintenance spreadsheet??!!
1. Everything we do opens us up to liability. Existence is a liability. I am also an American, so I understand this extreme fear of “Liability”, but you can’t live your life in fear. Things sometimes go sideways. Your nephew could wreck your car, injure themselves, and sue you for it. They can do this regardless. There is literally nothing you can do to legally protect yourself; by definition the legal system is constantly redefining itself. The best thing you can do is love people, love your nephew, and give them a gift that will help them. If they decide to sue you there are much larger issues at play than a gifted car.
posted by weed donkey at 7:48 PM on September 30, 2019 [14 favorites]

Ok, I'm marking this as answered and changing my name to "Pretty Good Freak-er Out-er."

Weed Donkey, I laughed pretty hard at "A freaking maintenance spreadsheet??!!"

Thanks all for the quick head check.
posted by Pretty Good Talker at 8:00 PM on September 30, 2019 [7 favorites]

1). Am I opening myself up to liability by gifting this car?

No, not if you transfer the title. Just like if you were to sell the car to anyone else.

2). Would it be a good idea to make a spreadsheet of the major maintenance? I generally have a "nothing incriminating in writing" rule, but I think it could be helpful.

I mean, ok you could, but it's not strictly necessary.

3). Is this just my anxiety and tendency to catastrophize making me spin out?

Yes, definitely. Once the title is in his name and you cancel your insurance it is his liability, full stop.

4). Anything I'm missing, due diligence wise?

No, you are overthinking this. Give him the car, fill out the release of liability with the dmv, cancel your insurance and you're good to go.
posted by ananci at 8:02 PM on September 30, 2019

Yep really the only major issue is that you make sure you transfer the title correctly, assuming your nephew is not a horrible person (which it sounds like he is not). When my mom died, we gifted her car of about that age to her foster son's niece. We gave him all the maintenance records and some other stuff, did a little fussing about title transfer and that was basically it (in my state getting the car inspected was their issue, in some states transferring an uninspectable car is a problem). After not that long the entire rear axle fell apart (she was fine) and we all shrugged and said "Well, sorry about that" but there were no other repercussions. It's nice if you to do a nice thing, this will be ok.
posted by jessamyn at 8:12 PM on September 30, 2019 [1 favorite]

Your nephew could wreck your car, injure themselves, and sue you for it. They can do this regardless.

But if they're in a position where accepting a venerable used car from their loving relative is a good option in the first place, they're totally unlikely to be in a position where pissing money up the wall on doomed and vexatious lawsuits is a similarly good option.

The world is full of people who are more than happy to accept the tradeoffs involved in keeping older cars running. I am one; my 1995 Daihatsu Mira is currently undergoing its second engine rebuild.

The world is also full of people who are apparently willing to believe that there is some magic number of miles past which, or some magic resale value below which, an older car must suddenly start costing so much to repair and maintain that putting more money into it makes no sense. I'm unconvinced that any of these folks are actually that good at basic arithmetic. For which I thank them all; my entire driving life has been spent in cars for which somebody else has bought the ten thousand dollar ticket for the ten metre ride down the new car dealer's driveway. It takes vast amounts of maintenance to match the cost of those tickets.
posted by flabdablet at 9:06 PM on September 30, 2019 [2 favorites]

People above have answered the question in terms of legal liability. That’s not the same as whether you will feel at fault if your nephew is in an accident and someone is hurt. I’d take into account your nephew’s age and experience. I don’t think a 16 year old should be driving a car that old. But the calculation may change if your nephew is an adult, knows cars well enough to recognize when something doesn’t feel or sound right and will get it checked out, has proven to be a safe driver, etc. Those things won’t change your liability, but they will lessen the chance of something happening that will make you regret your decision.
posted by Sukey Says at 9:49 PM on September 30, 2019 [1 favorite]

I essentially assess risk versus reward for a living. I have rarely, if ever, seen a more imbalanced transaction than this proposed one.

I am not a lawyer, but I cannot perceive any legal liability especially if you are as transparent as you write here. The reward is tremendous! It is for you and for your nephew. Instant good karma for you and a car at no cost to your nephew..

If your only hesitation is potential liability, I strongly recommend you take a deep breath, look over and marvel at your spreadsheet, email it to your nephew and gift him the whip.

Bless you.
posted by AugustWest at 10:00 PM on September 30, 2019 [3 favorites]

If your nephew asked for the car, you decided to sell it to him without disclosing its age, mileage, accident history etc and provided him a warranty then youd have legal liability once it all fell apart. 1)its a gift 2)if he doesnt like it he can sell it 3) once he accepts it the deal is done. Your brother/sister however may feel a little angry that you gave their kid a car in rotten shape but that's the no good deed goes unpunished rule of life.
posted by The_imp_inimpossible at 10:21 PM on September 30, 2019

However, it's an old car, and things fail.

While it's lovely that you want to help out your nephew, and everyone's sentimental about the car, there's no way this gift has the modern safety features and reliability you'd want in a car driven by a loved one. And even a currently well-maintained early 2000s car with 200K+ miles will demand time and money, sooner than later, to try to keep it road-worthy.

I think you and your family could honor the good memories you associate with this car, and still let it go via donation to a charity or perhaps by sale to a place like CarMax (with the appropriate disclosures) -- rather than risk tacking on negative experiences at the tail-end of a well-appreciated car's life. And you're already aware of your "anxiety and tendency to catastrophize" (there's a club! no worries, we don't hold meetings), no need to set out that welcome mat.

Keep any money from a sale in the family (not the automobile itself), by using it to seed a car-buying fund for your nephew.
posted by Iris Gambol at 12:24 AM on October 1, 2019

How old is your nephew, how long has he been driving, and how mechanically inclined is he? If he's a 16 yr old new driver this is not the car for him.

A car with 200k miles on it may be able to go another 200k miles if it's well-cared for. Last year I had to give up my much-loved 2002 car with 225k miles on it because someone ran a red light right into me. I would definitely still be driving it. All those fancy new features may improve safety a bit, but good driving is ultimately what counts.
posted by mareli at 7:26 AM on October 1, 2019

I've actually done this three times and haven't ever considered any liability issues. My wife is an attorney and she loves to imagine how things could go wrong, since it is essentially her job to do so. She has never expressed any concerns with giving away our old cars.

The one thing I have had go wrong is that my less than reliable brother never successfully registered the car, crashed it into something and abandoned the thing in a place where it got towed. I learned about it when the towing company contacted me as the owner of record. What I learned from that experience was that I needed to file paperwork with the DMV to establish that I had, in fact, transferred ownership when I gave him the title.

Also, be aware if the fair market value of the car plus birthday and christmas presents exceeds $15,000 you are obligated to file an income tax form (Form 709) recording the value of the transaction with the IRS. Most people don't do this, but it could technically land you in trouble if you are audited. You won't owe any tax (unless you give more than $10 million over their lifetime), but you're still supposed to file the form, even for your own children.
posted by Lame_username at 12:40 PM on October 1, 2019

my grandmother "gifted" me a car by selling it to me for $1.00 - that way it was not a gift, but a sale, which meant more protection for her if the car broke down.
posted by megan_magnolia at 3:41 AM on October 6, 2019

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