Understanding Your Role as Power of Attorney to Sell a Car

Power of Attorney provides you with the legal authority to sell someone else's car on their behalf.

Ben Luthi | 

May 25, 2022 | 4 min read

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Power of attorney is a legal document that gives an individual the power to act on behalf of another person as an agent. Depending on the type of power of attorney, that authority can be broad or limited.

While this legal authority is most commonly used to make decisions about a person's finances, medical care, or property, it's also possible for someone with the power of attorney to sell a car on your behalf. So how exactly does that process work?

What to Know About the Power of Attorney to Sell a Car

There are two primary types of power of attorney: general and limited. If you give someone a general power of attorney, they can act on your behalf in just about any matter allowed by your state's laws, which may include selling your car.

A limited power of attorney, on the other hand, prescribes exactly which matters the agent can have authority over. In particular, you can use a motor vehicle power of attorney that only allows that person to handle the responsibilities associated with your vehicle, including selling it.

How to Set Up a Motor Vehicle Power of Attorney

You may consider using a power of attorney to allow someone else to sell your car if you're sick, disabled, elderly, or otherwise unable to perform the task on your own.

Assuming you don't want to give someone else a general power of attorney though, you can set up a motor vehicle power of attorney. Contact your state's Department of Motor Vehicles (DMC) or use a website like eForms to obtain the document for your state.

You'll then fill out the information on the form, which may include your and your agent's name and address, information about the vehicle, and other pertinent personal information. You'll then sign the document in the presence of a notary public and have them notarize the form.

How To Use Power of Attorney to Sell a Car

Anyone can go through the sales process for a car without specific authority to do so. That said, if the buyer notices that you're not the registered owner of the vehicle, presenting the motor vehicle power of attorney could satisfy any concerns they may have about the arrangement.

The power of attorney is really important when you go to sign the title over to the buyer.

According to the American Bar Association, you'll need to present your power of attorney document to the Department of Motor Vehicles for it to honor your signature in lieu of the registered owner's. In all other respects, the sale should occur as normal.

How a Power of Attorney Protects all Parties

An alternative to a power of attorney is for the person you're helping to sign the title over to you so that you can turn around and sell it on their behalf. But in this scenario, you're technically not legally required to give them the money you receive from the sale.

As such, a motor vehicle power of attorney can protect both of you by giving you the right to sell the vehicle on their behalf and ensuring that they have a legal claim to the proceeds of the sale.

Finally, the power of attorney document also protects the buyer of the vehicle. If you were to sell the car without one, or without having the owner transfer the title to your name, the original owner could technically claim that you didn't have the right to sell the vehicle and might demand that the buyer return it.

Should You Use a Power of Attorney to Sell a Car?

If you want to sell your car and don't have the capacity to do it on your own, utilizing a power of attorney can help make the process go smoothly and provide legal protections for everyone involved.

Unless you have other reasons to consider a general power of attorney, using a motor vehicle power of attorney can ensure that your agent won't have the authority to make any other decisions for you beyond those related to the sale of the car. It also means you don't need to take further action to end the power of attorney.

If you want to proceed, make sure you get a valid document for your state, fill it out correctly (including all relevant information about the vehicle), and sign it with a notary public on hand to verify and notarize the document, making it official.

Ben Luthi

Ever since I read a personal finance book in college, I've been hooked. I've covered just about everything from credit card rewards and auto financing, to student loans and cryptocurrency. I've worked in banking, auto finance, and financial planning, and I've been writing about all of it since 2013. My top priority is to give people the information they need to make the best financial decisions for themselves.