Can I sell a motorcycle without insurance?

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If you are looking to make a good profit, selling a vehicle such as a motorcycle is not an easy task. When selling a vehicle like a motorcycle, there are many things to consider and many questions you should ask.

Insurance is a key aspect of selling a motorcycle. Some people may not have insurance but wonder if it’s required if they are planning on selling their bike.

Can I sell my motorcycle without insurance? It is advisable to have motorcycle insurance if you plan on selling your motorcycle or letting potential buyers test it. Most states require that you have at least basic motorcycle insurance. It is not necessary to have insurance if your bike is not in use.

My motorcycle flipping business was small when I was in college. Within my motorcycle flipping, that meant I sold a lot of motorcycles so I’ve been able to get a good idea about the importance of insurance and when do you and do not need it. Continue reading to find out more information about selling your motorcycle.

Why You Need Insurance

Insurance can be confusing, especially when there are so many rules and regulations. As annoying as insurance can be, it’s also important to have because it can really save you in sticky situations.

The majority of states in the United States require motorcyclists to have some form of insurance. Motorcyclists are required to have minimum liability coverage. If you cause an accident that involves another person, it will be covered by your insurance.

Selling a motorcycle is not an easy task. There are people who will make appointments, but they may not show up. Or there may be joy riders who want to just ride the bike.

Whether you have a serious buyer or a joy rider taking your motorcycle for a test run, it’s a good idea to have insurance during this process. Even if you didn’t have insurance before, I suggest you get insurance during the weeks you are trying to sell your motorcycle.

Motorcycle insurance is necessary because a motorcycle can be taken off the road at any time. Police can check your plates to see if you have insurance. You or they could be pulled over if they run the plates when you or potential buyers take the bike for a ride. In most states, it is illegal to ride on public roads without insurance.

Insurance is essential for the sale of a motorcycle. If the test rider causes an accident, you could be held responsible. Insurance for motorcycles is only available to the owner, and not to the rider. This is particularly important if the potential buyer causes an injury that injures others.

Click here to see my article if you’re Not sure whether or not to let potential buyers take your motorcycle for a test ride while you’re selling it.

The take home message is that not only is a running, uninsured motorcycle illegal, it’s also not frugal. If an accident occurs, you could be responsible for thousands of dollars in damages.

What Happens When an Accident Takes Place During a Test Ride?

Now that we’ve covered the importance of having motorcycle insurance when selling a running bike, we’ll discuss in more detail as to why it’s important to have it.

Insurance can be very expensive. Insurance costs can vary depending on who you are. (See my article about why motorcycle insurance can be expensive). Sometimes it feels like insurance is trying to scam you. Insurance can save you money if you follow all laws and do everything correctly.

If you plan on letting potential buyers test ride your motorcycle when you’re selling it, there are a few hazardous situations that could arise if you don’t have insurance. The main possibility is that the potential buyer wrecks while they’re out for a test run. So what does this all mean? Well that still means you’re still held liable for it, not the buyer. Seems a little backwards, but that’s simply how it is.

As I mentioned, insurance covers the motorcycle only and not the rider. You can sue the other party if you cause injury to another person. It’s really nice to have insurance in this situation because your insurance will cover the injuries of all parties involved up to the limits of your liability plan.

If the cost of someone’s injuries exceeds your liability amounts, they can come after you personally but most people don’t actually end up doing that. If you don’t have insurance in an instance like this, you are personally held liable for those injuries involved.

Potential buyers could even try to get you money to pay for your injuries. This could mean they have the right to take over your property, such as your car or house. That’s a huge world of mess for you and though your premiums will likely go up after it all, having insurance while selling a motorcycle can really save you a lot of money.

There are exceptions to the rule of not having insurance

While it is important to have insurance when selling a bike, there are a few exceptions.

The first exception would be if your motorcycle is not running when you’re selling it. There’s really no point in having insurance because your motorcycle isn’t out on the road and risking any harm to others. And the potential buyer isn’t able to take it for a test run anyway. The only reason to have insurance on a non-running bike is in the event it’s stolen or damaged in an accident.

Another exception is making sure that the potential buyer rides only on private roads. These places could include large parking lots, dirt roads or private property. These people have a slim chance of being caught by the police without any insurance or causing an injury for another person.

It is important to note that even if a potential buyer allows you to ride your motorcycle on private roads, they are still responsible for any damage. If your bike is damaged, you can’t make a claim against their insurance. So it’s always a good idea to have some sort of collateral against them whether or not you have insurance.

This could mean holding on to their driver’s license, taking a picture of it or having them give you at least a cash down payment on the motorcycle before the test run. You should inform them that you will keep the cash if it is damaged.

How To Handle Insurance Once You’ve Sold Your Motorcycle

After your motorcycle is officially sold, you still need to make sure you have insurance. These are important steps you should take so you won’t have to deal with potential problems down the road.

Once the new owner has left your driveway, you will have a copy in your hands. Notify your local DMV about the sale. This is known as a Notice Of Transfer and Release of Liability.

You can either go to the DMV and sign the form with information of the motorcycle such as the license plate number, motorcycle VIN, and the new owner’s name and address. You can also do this online in most states. This is a nice thing, because who has the time? “quickly run to the DMV?”). This will notify the state that the vehicle is no longer yours and you are not liable for any damage it may cause.

Complete the form and immediately cancel your motorcycle coverage. Many large insurance companies offer a 24-hour cancellation line that you can call to cancel your insurance. Some smaller insurance companies only allow you to call during business hours. If you’ve sold your bike outside of business hours, call your insurance agent anyway and leave a message stating you want your insurance cancelled as of the this time (state the date and time you called).

It’s important you cancel your insurance as soon as you sell your motorcycle because you can still be held liable for damages done by it by the new owner if they don’t have insurance and yours is still legitimate. While you might be able to dispute it through your bill, cancelling insurance should be done immediately.

Similar Questions

Can I cancel my winter motorcycle insurance? It is not advised to cancel your motorcycle insurance during the winter, even if you don’t use it and store it for the season. You can get “lay-up” insurance which is a policy that lowers your premiums during the winter months and still covers your motorcycle if it’s stolen or damaged by fire, floods, etc.

Is it possible to sell your motorcycle to an authorized dealer? A motorcycle can be sold to a dealership through either a trade in, consignment, clean sale, or a trade-in. Although trade-ins are usually less expensive, consignment sales can bring you more money but it may take longer to get paid.

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