Swapping Cars
July 26, 2021 1:14 PM   Subscribe

My parent and I have have essentially permanently swapped cars. Both are paid off and insured. Is there a good reason to go through the process of changing titles/insurance/etc. Or is it ok to just leave it as it is?

I understand that my insurance is "following" the car, and that it would be under my insurance if there was an incident. Beyond that, I'm not sure. My understanding is that I may be liable if they cause an accident with injury and are sued. However, one source I read said that the driver is responsible for liability, but the collision is under the insurance owner. Is that correct? Any advice would be appreciated.
posted by roaring beast to Work & Money (19 answers total)
 
Where are you located? Laws on this can differ. Are you named on each others' policies as additional drivers? Do you live together and are the cars garaged at the same address?
posted by mskyle at 1:17 PM on July 26 [1 favorite]


Doesn't matter who owns the car, as long as you (the driver) are insured (for that vehicle). Make sure this is the case, via a quick call to the insurance company.
posted by Rash at 1:42 PM on July 26


While insurance does follow the car, all the drivers should be added onto the policy as well (though there are often "family or friend may not have to be formally added" rules at some insurance carriers).

Also keep in mind that often the rates are dependent on vehicle make and model, primary driver, zip code, and miles driven. If you drive each other's cars, and you don't live together, you may or may not be getting the best rates.
posted by kschang at 1:52 PM on July 26 [2 favorites]


Yeah, it's common for insurance premiums to depend on where the car is normally parked. If you and your parent live at different addresses, you're probably both obligated to report the swap to your insurers.

Here's what my policy says: "You must promptly report to us all changes, including additions and deletions, in policy information. This includes, but is not limited to, changes in: [...] the principal garaging address of any covered auto."

In addition, you might run into complications when the policies overlap. For instance, if you get into an accident, you might be covered both by your own policy (as the named insured person) and by your parent's (because you were driving their car with permission). Which would be fine, except that both policies almost certainly have a clause saying you're not allowed to collect multiple payments for the same damages. So there might be some extra hassle involved in getting one or the other to pay up.

And depending on your state laws, either the title ownership or the car's registration might affect who is held responsible for tickets.
posted by teraflop at 1:54 PM on July 26 [2 favorites]


Do you live in the same house? Most insurance companies require you to report to them where the vehicle is garaged, and this will affect your insurance rate. If one of you lives in a lower risk area, but owns/insures a car that is garaged at a higher risk area, and does not report that to the insurance company, they may interpret that as fraud. At the very least, they could require you to retroactively pay the proper premium when they figure it out.
posted by yuwtze at 1:55 PM on July 26


Response by poster: For those asking, yes we are at different addresses.
posted by roaring beast at 2:00 PM on July 26


I used to work for an insurance company. Just do it. It's not rocket science, it's just paperwork. Why are you even asking this question? You own a car, you are the insured. If you swap a car, that person is the insured. You fill out the paperwork.
posted by Marie Mon Dieu at 2:04 PM on July 26 [14 favorites]


In my experience when something is going wrong, the fewer weird exceptions you have in your situation, the smoother everything goes. If god forbid something happens to one of these cars, you will be glad to have already straightened this out.
posted by bleep at 2:47 PM on July 26 [8 favorites]


FWIW, if you're avoiding car swapping because of tax concerns, your municipality may not charge taxes on a swap between related folks (I *just* did this with my sister and was pleasantly surprised that we paid no sales tax on the transaction because we're sisters).
posted by joycehealy at 3:03 PM on July 26 [1 favorite]


Is there a good reason to go through the process of changing titles/insurance/etc.

Because when you're driving someplace and the cops need to meet their quotas and/or have set up "bust everyone going 1 mile an hour over the speed limit" traps, "Can I see your license and registration and proof of insurance, sir/ma'am" goes from a 15-minute pause in your day & a small-dollar ticket to very potentially a whole thing of "Who owns this car? Who holds the registration? And the title? And they know you have it? You have their permission to drive it? And you have your own insurance? Oh, it's on an entirely different car? And where is this car? And the title and registration of the car you're driving don't match the address on your license? And? And? And? And?"

Don't give the cops any excuse to make your life more difficult.
posted by soundguy99 at 3:31 PM on July 26 [16 favorites]


It's an odd ball case, but I know of a case where someone was driving a car and was reported for an infraction that could cause loss of license. No, not DUI and it was just the plate number that was reported but it caused a LOT of trouble and significant expense to prove that the owner was not the driver of the car that day.
posted by forthright at 4:30 PM on July 26


What soundguy99 said. I once got pulled over driving someone else's car. The first question asked was, "is this your car," and when I said no, the trooper had so many questions. The car's owner was in the passenger seat, got questioned separately, and was able to provide answers that made the stop a short one. Turned out the troopers were running license plates for fun; for reasons totally unknown to me this car still had expired plates, and it looked stolen. On my own, I would have been held up for a while at very best.
posted by mersen at 5:45 PM on July 26 [2 favorites]


Insurance: If you’re already listed as drivers on each other’s insurance you can leave that alone, but if not, you would all get sucked into legal problems if any of you had a bad wreck. It’s not hard to switch it over.

Registration: This will vary by state, but it’s generally pretty simple and inexpensive to gift a car — if you each sign the title over to each other, then register the cars under your own names, you will have clean titles. This will allow each of you to easily sell your car if you need to.
posted by farkleberry at 6:08 PM on July 26


Should a car get towed, the registered owner generally has to reclaim it. How much of a hassle would it be to arrange for your parents to claim "your" car or vice versa? This can also be a problem if the registered owner is out of town.
posted by zombiedance at 6:17 PM on July 26


Tickets from traffic cams go to the car owner on file.
posted by oceano at 8:27 PM on July 26 [1 favorite]


In some cases if a car you own is involved in an accident and the driver is found to be at fault, you could be held liable. I suggest you transfer the ownership of the vehicles if this going to be a permanent arrangement.
posted by tman99 at 5:39 AM on July 27


Insurance does not always follow the car.

Drivers residing at the same household may have to be disclosed and individually added to the policy or sometimes specifically excluded.
( it's possible for a high risk driver to live with a low risk driver. Insurance companies don't like that, hence the requirement to disclose and add to the policy )

When a person passes away the insurance generally lapses.
There's a lot of problems with that as people assume the car is still insured. It is not ,unless the person driving has been added to that policy.

Don't open a can of worms as to who is or is not the principal driver etc. etc.
Do the paperwork and get the ownership and policies changed.
There's typically no fee for transfers between family members.
posted by yyz at 7:01 AM on July 27


Echoing others here: normal traffic stops (e.g. for speeding, tail light out, etc.) are way more of a pain in the butt if you don't own the car.
posted by nosila at 11:21 AM on July 27


When the plate fees are due get the car you drive titled to you. They can do the same. In the mean time each sign off the respective titles to the other. You take the title to the car you drive. They take the signed off title to the car they drive. Then you are both ready for new plates when it gets closer to time.
posted by Oyéah at 4:15 PM on July 27


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