Selling a car that's in a settlement or has a recall refund

So before the title changes hands, find the paperwork. The settlement notice decides the first question and your repair receipt decides the second. Some classes turn on whether you owned the car on a certain date, so read the class definition before you sell.

The settlement notice decides who gets paid

Every class action defines its class: who counts, between which dates, and what they had to do to claim. Some settlements cover only the person who owns the car on a certain date. Others also cover people who sold it. You can't tell which kind you have until you read the notice.

The two Volkswagen diesel settlements show how former owners can stay in:

• 2.0-liter cars. The settlement agreement made room for an "Eligible Seller": someone who bought or acquired the car on or before September 18, 2015 and sold or transferred it after that date but before June 28, 2016 (settlement agreement). The period for those sellers to identify themselves ended September 16, 2016.
• 3.0-liter cars. The notice says former owners and former lessees who sold or ended a lease after September 18, 2015 "may also be eligible for cash settlements" (3.0-liter notice). A former owner had to identify themselves at VWCourtSettlement.com by May 1, 2017, then file a valid claim within 60 days after the court's final approval. Current owners and lessees had to claim before June 1, 2019.

Every dated deadline in those notices has passed. The point they make still holds for any car settlement: selling didn't shut people out, and missing a date did. If your car is in an open case, the claim window matters more than the sale date.

A recall repair stays with the car

Recalls work differently from settlements. Federal law says that once a defect notice is required, the manufacturer must remedy the defect "without charge" once the car is brought in for the fix (49 U.S.C. 30120). The free repair is tied to the vehicle, not to you. After you sell, whoever brings the car in gets the fix.

There is one age limit. The free remedy doesn't apply if the car's first purchase came over 15 calendar years ahead of the defect notice or order, whichever was earlier. Measure from that first sale to the recall date, not to today.

What that means for a seller: an open recall doesn't vanish when you sign the title, and you don't lose anything by passing it on. If you want the repair done on your watch, do it before the sale.

A recall refund follows the person who paid

The harder case is a repair you paid for before the recall was announced. The federal rule calls the person asking for that money a claimant: "a person who seeks reimbursement for the cost of a pre-notification remedy for which he or she paid" (49 CFR 573.13). It ties the refund to whoever paid, not to whoever owns the car now.

Three details in the same rule decide whether you collect:

1. The receipt. For a repair, the manufacturer may ask for a receipt showing that the work fixed the recall defect and what you paid for it.
2. Documentation. A manufacturer's plan can refuse to pay a claimant who didn't send in adequate documentation.
3. The window. For cars, the reimbursement period ends 10 calendar days after the manufacturer mailed the last recall notice to owners.

So the receipt is the asset. Keep it, plus any recall letter that reached you, in a folder that doesn't leave with the car.

Before you sign the title: a short checklist

• Look for any settlement notice that names your car, and read the class definition for language about owners who sold.
• Write down the claim deadline and any step you must take before it, such as registering as a former owner.
• Copy your proof of ownership before the title goes. The settlement windows above all turned on dates, so keep copies of the assigned title and the bill of sale as your own record of the sale date.
• Pull out repair receipts for any work that matches a recall.
• Clear any loan first. A lender that holds the title has to release it before you can sign it over; our loan guide walks through the payoff.
• Finish the state steps in the table below, then file your state's sale notice. After you sell covers the plates and that notice.

What your state asks of the seller

None of this changes how the title itself is signed over. Here is the seller-side rule we found for each state. Check your state's page before you sign; most have more steps than one line can hold.

Repair the recall, or sell the car now?

Sort the problems into two piles.

The recall defect. If the car is within the 15-year limit, the remedy costs you nothing as long as the car can be presented to the manufacturer for it. That makes it worth doing when the recall is the main thing wrong. If you sell first, the next owner can still get it done.

Everything else. A failed engine, a dead transmission or crash damage aren't covered by a recall, and the repair bill is yours. Compare that bill with what the car is worth as it sits. A settlement payment or a recall refund goes to whoever the rules name, so it shouldn't change that math. Only the repair cost and the car's value should.

Selling it to us

We buy whole non-running and junk cars. Whether you can still claim depends on your settlement's notice, so check it before you sell. For an offer we need the basics: year, make, model and miles, the fault, and whether a lender still holds the title.

You sell the whole car as it sits, and pickup is free anywhere in the US. Keep your receipts and the settlement notice; they stay with you, not with the car.

Questions first? Call (877) 421-6008.