Am I liable? Accident involving a car registered to me

Conor_3

The Registered Keeper isn't necessarily the owner of the vehicle - merely someone to whom correspondence can be sent so still being registered as the keeper when you sold it doesn't make you liable - just that you'll get the letters until you inform them who is the owner.

Once you've sold the car, you have no liabilities to make sure he is insured to drive it. You do up to that point but not once you've sold it.

And in reply to your last post, the finance company wouldn't be liable.

raskazz

The reason they are enquiring is because of the compulsory nature of motor insurance. Just because the new keeper is not a named driver on your policy does not mean that your insurer can simply avoid liability. This is because if the implications of the Road Traffic Act and Article 75 of the Motor Insurance Bureau's Articles of Association.

Under s.151 of the Road Traffic Act the insurer cannot exclude third party liability on grounds of the driver not being covered under the policy.

Even if s.151 did not exist, then in a case like this, if the new owner did not insure it, then under Article 75 your insurer can only avoid liability:

(vi) when the insurance has ceased to operate by reason of a transfer of interest in the vehicle involved in the accident, which the insurance purports to cover, and which transfer is proved by evidence;

So in other words your insurer would only escape liability if they can prove that you had transferred ownership of the car. Usually this would be straightforward if the transaction had been wholly completed before the incident. However, seeing as in this case you had not apparently been paid in full for the car AND retained the registration document it is not as simple as that.

This situation has arisen because your insurer will be listed against the vehicle on the Motor Insurance Database. You MUST tell your insurer immediately if you have sold your car.

Edited to add: Worst case scenario would be if you sold a car that you were insuring; but you did not inform your insurer; the new owner did not insure the car; and there is no evidence that the car was sold (V5 not processed correctly, paid in cash etc). If the new owner had an accident then your insurer could be forced by law to compensate the victim. As you breached the terms of the policy by not informing your insurer that you had sold the car, your insurer then sues you for the amounts it had to pay the third party.