Let us say you want to sell your car.  What do you do with the motor car policy on it?

That Certificate of Cover (COC) corresponding to the Compulsory Third Party Liability (CTPL) should be included in the sale and the deed of sale should say so.  This is because the COC is non-cancellable, but it is transferrable.  Ask your broker or agent to have your name changed to that of your buyer.

The voluntary portions of the policy – own damage, theft, voluntary third party – may or may not be part of the sale.  If it is not part of the sale, then the policy can be cancelled and, depending how many months it has run, you should get part of the premium back.

If the policy is part of the sale, it is better that the deed of sale should say so.  You may want the portion of the premium corresponding to the period the policy is yet to run to expiry date added to the selling price of the car.  You can ask your broker or agent to have your name on the policy changed to that of the buyer.

We are assuming that your insurance company is acceptable to the buyer.  If not, you can have the policy cancelled.  The buyer then arranges his own insurance which is no longer your concern.

If you still have a balance on the mortgage of the car, and the buyer will assume the payment of that balance, you and the buyer will have to bring in the bank or finance company into the transaction, which becomes a three-way deal.  You better have your lawyer draft the contract to protect your interest.

Now for the most important part: It is essential that a new registration certificate be issued by Land Transportation Office and your old certificate be cancelled.

As long as the certificate is in your name, you are liable for third party damages arising out of the operation of the car, in spite of a valid deed of sale.  This is the way the Courts have decided, whether you agree or not.

It is best that you work out the transfer of the certificate yourself. Do not rely on the buyer’s promise to do it.  He may not do it at all, and you run the terrible risk that the car may cause an accident, or it may be used to commit a crime, or – it may be converted into a car bomb, which is what happened to a car a friend of mine had sold years before.




  1. Boyet Deleon says:

    Hi Sir Honesto,

    I have a question, what if i sold my car under assume balance (the bank approves the buyer to be the new loaner), can we also change the car registration from my name to the buyer’s name? Just in case the car sold was used in a crime or hit someone, I’ll be protected.

    Thanks and Best Regards,

    • 6hydra says:

      Bring your car and all the papers to LTO and have the registration transferred to buyer. The most important thing is that the registration is no longer in your name.

      Hope everything turns out alright. Thanks for writing.

      Honesto C. General

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