Blog

Selling To A Minor

In Texas, there are no direct age restriction in place for individuals wanting to be recorded on the title and registration as the owner of a vehicle.

In Texas, there are no direct age restriction in place for individuals wanting to be recorded on the title and registration as the owner of a vehicle. However, many dealers prefer NOT to sell to a buyer who is still a minor (under 18 years of age) because of related legal ramifications. Whether retail or financed, dealers should be careful before he or she sells a vehicle to a minor.  

In general, a minor can legally purchase a car and a minor may enter into a contract with a dealer. However, in most states the minor may void a contract before they reach the age of 18.  This includes all related sales documents, the buyer's order, and important documents such as the As-Is disclaimer.  Even if not on the title, it may be prudent to have a parent, guardian, or other person over 18 sign related documents as a best practice.

If it is a financed sale, be on alert that a minor customer could also void the contract in addition to creating doubt about the disclosures noted above. Because of these considerations, a dealer selling to a 17-year-old will often request that a parent or guardian co-sign on the bill of sale and other retail installment contract paperwork. Doing this makes the adult who signed on the contract bound to the contract terms, even if the minor is not.

Whether retail or financed, think about insurance and hidden liability. Car insurance for teenagers is expensive, really expensive. Car dealers in Texas should inquire about proof of insurance before they sell or register a vehicle in a customer's name. If a minor buyer cannot secure AND afford liability insurance, then there may be future registration issues that may come back later. Also, if the minor buyer drives the vehicle off your lot without insurance, you could be the subject to a lawsuit for negligent entrustment. 

For those curious about what the elements of a negligent entrustment claim are: 1) the entrustment of a vehicle by the owner; 2) to an unlicensed, incompetent, or reckless driver; 3) that the owner knew or should have known to be unlicensed, incompetent, or reckless; and 4) the driver was negligent on the occasion in question and; and 5) the driver's negligence proximately caused the accident and plaintiff's injuries. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 758 (Tex. 2007); Schneider v. Esperanza Transmission Co., 744 S.W.2d 595, 596 (Tex. 1987); Williams v. Steves Indus., Inc., 699 S.W.2d 570, 571 (Tex. 1985).

Comments

There have been no comments made on this article. Why not be the first and add your own comment using the form below.

Leave a comment

Commenting is restricted to members only. Please login now to submit a comment.