Man gets charged for donating car

October 17, 2008 6:58:42 PM PDT
Donating your car to charity can be a good deed and a nice tax write-off. But what happens to the car after that can land you in trouble? 7 On Your Side has important advice to anybody who donates or sells their own car.

Videographer Rick Corrigan thought he was doing a good deed when he donated a car to charity last year.

"We'll take it and it'll be a tax write-off and it'll be a donation. I said that sounds great," said Corrigan.

He signed over the pink slip to a charity called Wellness Central of Petaluma. All fine and good until two months later, Rick got a notice in the mail. His donated car had been towed down in Morgan Hill and he was being billed about $500 in tow fees.

It turned out the car's title never changed. It was still registered to Rick, so he called Wellness Central.

"Please take care of this. I donated the car to you and you were in control of it and they said yes we'll take care of it," said Corrigan.

But nine months later, Rick got another bill from the tow company, this time demanding $2,200.

"I couldn't ignore it because I didn't want my credit ruined, so that's when I got in touch with 7 On Your Side," said Corrigan.

7 On Your Side contacted the charity and it referred us to the agent who handles the donated vehicles, James Schultz of Petaluma. Schultz promised the charity would relieve Rick of responsibility for the tow fees.

"The towing company will look to see who the last registered owner is," said Jan Mendoza from the California Department of Motor Vehicles.

Mendoza of the DMV says there is a big lesson here. If you donate or sell a car, title doesn't automatically change.

But you can protect yourself by filing notice of transfer and release of liability. Jan says file a form right away; so that way, you're not legally responsible for parking tickets, towing and car crashes -- anything bad that happens after you sell your car.

And if you don't, you are on the hook, legally, for all potential parking fees, lawsuits or other costs

"If you don't file that release of liability, you could be stung with that bill," said Mendoza.

The DMV says often charities don't re-register cars before they sell them, because it racks up registration fees. Meanwhile the tow company has stopped billing Rick for the fees.

Notice of Transfer and Release Liability form


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