What to do if you inherit a car

Carlton Boyce / 16 November 2015

What do you do if a car owner dies or you inherit a car?



When a car owner dies there is more to the situation than you might imagine. 

The period following any death is a difficult time and while the ownership of the car is rarely in dispute (assuming a valid Will has been made…) the legal complexities around storage and usage can be a trap for the unwary.

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Insurance

The first thing to be aware of is that any insurance policy covering the car will have lapsed with the death of the policyholder – you must notify the insurer. 

This leaves you without third-party cover, which means the car cannot be stored on a public road. 

It probably also leaves you vulnerable to any losses through theft or fire, although some companies will continue fire and theft cover for a limited period as a gesture of good will if you explain the situation to them. 

If you need to move the car as a temporary measure, you’ll need to think about insurance.  While your own policy probably covers you to drive a car that doesn’t belong to you; most policies only provide such cover if the car is already insured. 

It’s worth checking the position with your insurers but you will generally have to arrange your own insurance cover for the vehicle, even if it’s just temporary cover to enable you to drive it to a secure, off-road location for storage. This isn’t normally expensive and is likely to cost between £25-50 for 24-hours’ cover.

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Ownership

The thorny question of ownership needs to be settled fairly quickly, and the advice of a solicitor sought if there is any doubt. Also, if the car is still the subject of a finance agreement you will need to contact the finance company to seek their advice too.

In any case, you’ll need to inform the DVLA of the registered keeper’s death. It’s easy and quick to do and a full guide is available here

It might be easier to register the car in your name, even if you don’t intend to keep the car in the long-term. Again, this is very simple to do and there is a special department at the DVLA who will handle the transfer of the V5 (registration document) to the new owner in a sensitive and understanding way.

Find out about changes to the V5 registration document.

The car’s value

Once ownership has been established, the question of the car’s value might need to be determined. 

If the car is specifically mentioned in the Will and bequeathed as such, the matter is simple: the car is inherited and the new owner is free to do with it as they please, regardless of how much it is worth. (Although inheritance tax thresholds might mean that the solicitor dealing with the estate needs to establish a value.)

However, if the car isn’t mentioned as a discrete item and forms part of a larger inheritance that is to be split between two or more people, its value needs to be established. This can be done by comparing the recent sale price of similar cars on eBay, Autotrader and the like, obtain a valuation from a website, such as WhatCar, or you can have the car valued by a reputable garage, with them providing a written valuation.

You should keep all the paperwork to demonstrate that you have acted reasonably in the event of any future legal wrangles.

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Selling the car

Once the car is securely stored, insured, and ownership established, you might be tempted to sell the car as quickly as possible, and who could blame you? With so many things to worry about, a quick sale leaves you free to deal with other, possibly more important, matters.

You might further be tempted to arrange for a garage or local car dealer to come and collect the car for you. This is an attractive option as they will deal with the whole process on your behalf. However, this is unlikely to yield the best price for the car, so you’ll need to balance the convenience offered with the money it will cost you.

Selling the car privately through Autotrader is easy and relatively cheap, while selling it on an Internet auction website, like eBay, will (usually) result in a sale that reflects the true market value of the car. However, in either case, you’ll need to deal with potential buyers.

If you do take this option please make sure that the money paid has cleared before handing over the car: a bank transfer into your account is safe and can be done almost instantaneously.

Otherwise a banker’s draft can be accepted but you must pay it into the bank before handing over the keys to make sure it isn’t a forgery. Cash used to be a safe option, but there are a lot of forged notes around and it isn’t unheard of for thieves to come back later that night and burgle you to recover their money…

In the case of a more valuable or classic car, you might be better off contacting a specialist auction house, such as Bonhams or H&H, to seek their advice on a valuation and the best way of selling it. This is one instance where it probably is worth handing the car over for someone else to deal with.

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Vehicle Excise Duty (car tax)

The vehicle excise duty (‘car tax’) status can be checked online if you are unsure of whether it is taxed or not. Essentially, it will either be taxed or registered as SORN (Statutory Off-Road Notification).

If the registered keeper has declared the car as SORN, you don’t need to take any action. However, if the car is showing as having current tax on it, this cannot be transferred to you or anyone who might buy the car, so if you need to drive the car on a public road, you will need to tax the car afresh.

However, the DVLA has confirmed that as long as you report the owner of the car as deceased it will not pursue anyone driving the car from the registered keeper’s address to a place of safekeeping.

Find out more about the changes to car tax.

Existing car breakdown cover

Don’t forget to cancel any existing car breakdown cover. Most companies just need a letter confirming the position, along with a copy of the death certificate.

What if you don’t have a driving licence?

If you don’t have a current driving licence your options are a bit more limited. 

The easiest solution is to find a friend or family member who is prepared to move the car to a place of safekeeping for you if necessary. Failing that, most local garages should be able to help for a nominal fee.

Visit our bereavement section for more useful information.

The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.