California Release of Liability (REG 138): The 5-Day Rule After You Sell

California gives you five calendar days from the date of sale to file a Notice of Transfer and Release of Liability with the DMV. It is form REG 138, it is free, and you file it at dmv.ca.gov/nrl. Until it is on file, the DMV still shows you as the registered owner, and the parking tickets, toll violations, red light camera citations, and accident claims the new owner generates can be routed to your name.

I am Joe Yavetz, a licensed dealer in the San Fernando Valley. I have bought over 50,000 cars in California, and I have talked a lot of sellers through a citation that arrived months after they handed over the keys. This page is about the one form that stops that from happening. The rest of the sale, the title, the smog, the bill of sale, is in our main California car selling guide.

What Is the Notice of Transfer and Release of Liability?

The NRL is a one-way notice you send the DMV saying you no longer own a specific vehicle as of a specific date. On paper it is form REG 138. Filed online it has no form number at all, just a confirmation page.

That single date is the whole point of the form. California's Vehicle Code section 5602 says an owner who has made "a bona fide sale or transfer" and delivered possession is not, by reason of anything in the Vehicle Code, the owner "so as to be subject to civil liability or criminal liability for the parking, abandoning, or operation of the vehicle thereafter by another," as long as that owner either endorsed and delivered the title or sent the DMV the notice described in section 5900. The NRL is that notice. It is how you claim the protection the statute already gives you.

The DMV states the effect in plain language on its own NRL page: after DMV receives the notice, "any liability for parking violations, traffic violations, or civil litigation after the date of sale becomes the responsibility of the subsequent purchaser."

One thing to be clear about, because it is where most of the confusion in this topic lives: the NRL is not a title transfer. It is not a substitute for one, and it does not start one. Two separate forms, two separate people, two separate deadlines.

How Long Do I Have to File the Release of Liability in California?

Five calendar days from the date of sale. Not five business days.

Vehicle Code section 5900 requires the owner to notify the department "within five calendar days" of selling or transferring title or interest, and to include the date of sale, the names and addresses of both parties, a description of the vehicle, and the odometer reading. If the registered owner is not the person physically holding the car, whoever has possession files instead.

There is no grace period written into the statute and no extension to ask for. If you sell on a Friday, the clock runs through the weekend. This is the part I push hardest on when I am standing in someone's driveway, because the five days are cheap and the alternative is not.

How Do I File the Release of Liability Online With the CA DMV?

Go to dmv.ca.gov/nrl and press Start NRL. There is no account to create, nothing to sign, and no fee.

The first screen is a vehicle lookup. It asks for two things: the license plate or CF number, and the last five digits of the VIN. Not the whole VIN. That trips people up when they are standing at the curb reading the number off the dash.

Then it asks for the rest of what section 5900 requires. Here is the DMV's own list of the information it collects:

Note what is not on that list: the selling price. The DMV does not ask, and section 5900 does not require it.

Submit, and you get a confirmation on screen. Print it or screenshot it. The DMV's instruction is short and worth following exactly: "Print a copy of the confirmation and keep it in your records." An electronic NRL updates the vehicle record within one business day.

Three details that are not obvious from the form:

If you do not know the buyer's name, you may enter "unknown" in the new owner fields. The DMV allows it and also warns what it costs you: missing information may leave DMV unable to update the record, "which may disqualify your liability exemption." Get the name off the driver's license before the car leaves.

If the buyer is a business, the online form still works. Enter the business name in the last name field and continue into the first name field if it runs long.

If you would rather mail it, complete the paper REG 138 and send it to the address on the form. Same five-day clock. Photocopy it first, because if any of it is illegible the DMV may not be able to update the record.

What Does Filing the Release of Liability Actually Protect You From?

Four specific things, each with a statute behind it. This is the part almost every article on this topic waves at and does not source.

The parking and toll rules are the cleanest of the four, because the statutes use the word "shall." Under section 40210, you return the affidavit of nonliability that comes attached to the delinquent notice, the processing agency checks with the DMV, and if you complied with 5602 it cancels the citation as to you. Section 40265 does the identical thing for toll evasion. Both sections then let the agency go collect from whoever actually owned and possessed the car that day, which is exactly where it belongs.

The crash claim is the one that costs real money. Vehicle Code 17150 makes "every owner of a motor vehicle" liable for death, injury, or property damage caused by anyone driving it with the owner's permission. Section 17151 caps that imputed liability at $15,000 for one person's injury or death, $30,000 for more than one, and $5,000 for property damage. Those are not enormous numbers on their own. The cost is the lawyer you hire to explain that you sold the car in November, and that bill has no cap.

Here is the honest limit on all of this, straight from the DMV: "In the case of a suit or complaint, the court is responsible for determining if you have complied with the law and are exempt from civil and/or criminal liability." The NRL is not a magic shield. It is the evidence that ends the argument early. Filed on time, it turns a four-month fight into a phone call.

Two of these I have watched happen. A woman in Encino sold her 2017 Civic in November and skipped the NRL. In March, three Santa Monica street-cleaning tickets showed up totaling $385, because the buyer's daughter parked it outside Santa Monica College every Tuesday. She won every one of them, and it took four months and three phone calls per ticket. A guy in Woodland Hills sold a 2014 Camry to an uninsured buyer who rear-ended someone on the 101 two months later. The injured party's attorney pulled the registered owner's name, which was still his, and sent a demand letter. He had the bill of sale. He did not have an NRL. It cost him $1,200 in legal fees to get his name off a claim he had nothing to do with.

Does the Release of Liability Take My Name Off the Car?

No, and this is the single most misunderstood thing about the form.

The DMV's answer is one sentence: "Only the buyer's application for transfer, using the endorsed title received from you, can remove your name from the vehicle record." Your NRL marks the record and stops your registration renewal notices. It does not complete the transfer.

That job belongs to the buyer, and it has its own deadline. Vehicle Code section 5902 gives a transferee who has received a properly endorsed title 10 days to forward it to the DMV with the transfer fee. If the buyer sits on it, the transfer penalties are theirs, not yours.

So what happens if the buyer never registers it at all? Your protection under 5602 still runs from the date of sale, because that protection is triggered by your notice, not by their paperwork. The car sits in the DMV system as a reported transfer waiting on an application that never comes. Buyers stall most often on cars whose tags already lapsed, because the back registration bill lands on whoever applies first, and that situation has its own guide: selling a car with expired registration in California. If the car later gets impounded or abandoned and the DMV contacts you as the prior owner, you answer with the NRL confirmation and the dated bill of sale, and that ends your involvement.

This is why I tell people to file it even when the buyer is a cousin or a neighbor. It is not about trusting the person. It is about closing the loop on your side, which is the only side you control.

What If I Get a Ticket for a Car I Already Sold?

Contest it, and do not pay it to make it go away. Paying is treated as accepting responsibility.

1. Note the violation date on the notice and compare it to the date on your bill of sale. The violation must fall after the sale.
2. Fill out the affidavit of nonliability. It comes attached to the notice of delinquent parking violation by law, along with an explanation of what nonliability means.
3. Attach your NRL confirmation and a copy of the signed bill of sale.
4. Return it to the processing agency named on the notice.

If your NRL was on file, the agency verifies compliance with 5602 with the DMV and cancels the citation as to you. If it was not, section 40210(c) gives you a second door: deliver evidence within 15 days of the notice that ownership and possession transferred before the violation date, and the agency cancels it anyway. Subdivision (d) says what counts as evidence, and it names one document specifically, "a copy of the executed agreement showing the date of the transfer of vehicle ownership." Your bill of sale. Section 40265 sets up the same 15-day path for toll notices.

That second door is the reason the bill of sale matters as much as the NRL does. Keep both forever. Email them to yourself the day of the sale so a dead phone cannot cost you.

Lost your NRL confirmation? Submit a Request for Record Information (INF 70) with the fee to the address on the form and the DMV will send you a copy of what you filed.

What If the Five Days Already Passed?

File it anyway, today, and date it honestly with the real sale date.

A late NRL is worth far more than no NRL. It marks the vehicle record, it stops the renewal notices, and it puts a dated filing on the DMV's system that any processing agency can verify. What you lose by being late is the clean automatic path. You move from "the agency shall cancel it" to "the agency cancels it once you produce evidence," which is the 15-day evidence route above. Slower, more paperwork, same ending, provided you kept the bill of sale.

Do not backdate anything. The date of sale on the form is a statement to the DMV, and a false one is a much larger problem than a late filing.

Should I Take My License Plates Off the Car?

Standard plates stay with the vehicle in California. You do not remove them, and the buyer drives off with the plates and the sticker.

Selling because you are leaving the state? The change-of-address deadline, the registration refund rule, and the order to do it all in are in selling a car before you move out of California.

Personalized and special interest plates are different. Per the DMV's registration procedures manual (section 21.200, Veh. Code 5109), when you sell a vehicle you may reassign the plates to another vehicle immediately, retain them for future use, or surrender them. Retention is requested on a Special Interest License Plate Application (REG 17), and there is a catch worth knowing before you choose it: an annual retention fee is due every year the plate is not on a vehicle, and failure to pay it cancels the plate.

Decide before the sale and physically remove the plate the day of the transaction. I have had sellers ask me a week later whether they can still get a vanity plate back. Once it leaves on the car, it leaves with the car.

When Should I Cancel My Car Insurance?

The day of the sale, after the buyer takes possession, and not one minute before.

The order is: payment changes hands, both of you sign the bill of sale, the buyer drives off, then you call your insurer. Cancel any earlier and you are uninsured during the test drive and the handoff. Cancel later and you are paying premiums on a car you do not own.

If you are replacing the car, ask your insurer about a vehicle transfer rather than a cancellation. It keeps your continuous coverage history intact, which is what your rate is built on at renewal. And do not let the buyer drive away on your policy as a favor. If they hit someone on the way home, your policy answers for it.

Do I Owe Taxes on a Private Car Sale in California?

Almost certainly not, but three separate taxes get confused with each other here.

Use tax is the buyer's, paid when they register the car. You owe nothing.

Income tax applies only if you sold for more than you paid, which happens with collectibles and almost nothing else. A normal car sold at a loss produces no reportable income.

The $10,000 cash rule is about the buyer, not you. A business that pays more than $10,000 in cash for your car has to file IRS Form 8300. A private individual buying your car does not. Your bank may separately report a large cash deposit, which is a different system and not a problem when you have a bill of sale showing where the money came from.

Frequently Asked Questions

How do I notify the DMV that I sold my car in California?

File a Notice of Transfer and Release of Liability online at dmv.ca.gov/nrl within 5 calendar days of the sale. It is free and requires no account. You need the license plate number, the last 5 digits of the VIN, the odometer reading at the time of sale, the date of sale, and the buyer's name and address. You can also mail a paper REG 138 to the address on the form within the same 5 days.

What happens if you don't file a release of liability in California?

The DMV continues to show you as the registered owner, so parking citations, toll evasion notices, red light camera tickets, and civil claims arising from the buyer's driving can be routed to your name. You can still get them cancelled, but under Vehicle Code 40210(c) and 40265(c) you have to deliver evidence within 15 days that ownership and possession transferred before the violation date, rather than the automatic cancellation an on-time filing gives you.

How long does a release of liability take in California?

The online filing itself takes a few minutes and you get a confirmation on screen immediately. The DMV updates the vehicle record within 1 business day of an electronic NRL. A mailed paper REG 138 takes as long as the mail plus processing, which is why filing online is the better option when you have the choice.

Is a California release of liability legally binding?

It is a statutory notice, not a contract, so "binding" works differently than people expect. Filing it satisfies Vehicle Code 5900 and triggers the protection in Vehicle Code 5602, which relieves a seller who made a bona fide sale and delivered possession from civil and criminal liability for the parking, abandoning, or operation of the vehicle afterward. The DMV notes that if a suit is filed, the court decides whether you complied and are exempt.

Does a release of liability form need to be notarized?

No. The DMV's online NRL takes no signature at all, and the paper REG 138 is signed by the seller and mailed in with no notary block. Nothing in the process requires a notary or a witness.

How do I get a copy of my release of liability in California?

Complete a Request for Record Information (INF 70), and mail it with the required fee to the address on the form. The DMV will send you a copy of the NRL you submitted. If you filed online, the confirmation page you printed is itself proof of filing, so save it at the time rather than requesting it later.

What happens if you don't transfer a title within 10 days in CA?

That deadline belongs to the buyer, not the seller. Vehicle Code 5902 gives a transferee 10 days from receiving a properly endorsed title to forward it to the DMV with the transfer fee, and late transfer penalties are theirs. Your own protection under 5602 runs from the date you filed the NRL and does not depend on whether the buyer meets their deadline.

Do I have any responsibility after I sell my car in CA?

One mandatory filing: the Notice of Transfer and Release of Liability within 5 calendar days. Everything else is either the buyer's job (registering the car, paying use tax) or housekeeping on your end (cancelling insurance, retaining special plates). Keep the NRL confirmation and the signed bill of sale permanently, because those two documents resolve any citation that arrives later.

Is a handwritten bill of sale legal in California?

Yes. There is no required form for a private-party bill of sale, and a handwritten one holds up as long as it shows the date of sale, the vehicle description and VIN, the price, and both parties' names and signatures. Vehicle Code 40210(d) specifically names "a copy of the executed agreement showing the date of the transfer of vehicle ownership" as evidence sufficient to cancel a parking citation, which is the job your bill of sale does. The DMV's own form, and when it is required, is in the California bill of sale (REG 135).

Do I keep my license plates when I sell my car in California?

Standard plates stay with the vehicle. Personalized and special interest plates can be reassigned to another vehicle, retained for later use, or surrendered, using a Special Interest License Plate Application (REG 17). Retained plates carry an annual retention fee, and not paying it cancels the plate. Decide before the sale, because once the car leaves with the plate on it, the plate is gone.

When should I cancel my car insurance after selling my car?

Cancel or transfer coverage the same day the sale closes, after you have the signed bill of sale and the buyer has taken possession. Do not cancel before the buyer drives off, because you are uninsured during the handoff and any test drive. If you are replacing the car, ask about a vehicle transfer instead of a cancellation so your continuous coverage history stays intact.

Do I have to report the sale to the IRS?

Most personal car sales are not reportable income, because you almost always sell for less than you paid. If you sold for more than your purchase price, the difference is a capital gain and gets reported on your federal return. Cash payments over $10,000 trigger an IRS Form 8300 filing by the buyer only when the buyer is a business. Private buyers do not file Form 8300.

When I buy a car, I file the release of liability with the seller on their phone before I pull out of the driveway, because it is the one piece of paperwork that stays theirs after the money changes hands. If you find yourself selling another car down the road and would rather skip the whole checklist, I come to you across the San Fernando Valley, Ventura County, and West L.A. at (818) 325-7535. Otherwise, file the REG 138, save the confirmation, and you are done.

Related reading: how to fill out a title when selling a car in California and the full California car selling guide.