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Donate A Car -- The Right Way

Your state department of motor vehicles typically will offer a Notice of Transfer of Title and release of liability that you can file once you have signed the car over. That tells the DMV you have sold a vehicle, and you should be able to cancel your insurance after the sale report is done.

Don't just let the policy lapse; if you don't renew it or pay the bill, the policy will be canceled for nonpayment. That can have a major impact on your future car insurance rates.

Your name doesn't come off the legal title until the new owner registers the car, Gusner warns. “It's a good idea to follow up at the DMV later on. You may not be legally liable anymore, but you don't want to have to go to court to prove it.”

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