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My Mom can't afford car insurance. She is in a nursing home in NJ under Meidcaid, and they won't allow for her funds to cover car insurance while we sell it, but it is taking longer than we expected to get it sold. We can't afford to pay for it ourselves. If it lapses, and we let someone test drive it and they get in an accident, will it be a problem for her either fianncially of legally?

Also, will we have a problem with the DMV when we sell it if she does not have car insurance?

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How much is the car worth? If the blue book value is slim, why not just donate the car to charity.

I plan to do that with my parents car when the time comes, just too many things wrong with it over the years, plus now it sits and is barely used [I hate driving it].
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Also, when the car is sold, the records at DMV will reflect the transfer. When your mom's Medicaid case is reviewed after a year, they will see from DMV that the car was sold and they will have questions. If it's too much money for her to have in her account, it could cause problems OR they may want that money. I"m no expert, but I have read that turning exempt property like a car, into cash, which she is restricted to have, can cause problems. I would double check before you sell. This is why many of Medicaid recipients cars sit unused and unsold in the garage. Selling them is sometimes not worth it, since it could disqualify the person.
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I have to agree with Garden Artist. The liability is huge. Call a car dealer. They'll skin you on the deal but how much time and money do you want to put in this deal. BTW, what is the car worth? Unless it's worth big bucks just be done with it.
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I think the answer is that it will be a major liability problem not only for her, but for you for allowing the car to be driven not only w/o insurance but by an unknown party, especially if you don't have a DPOA allowing you to sell it or you're not a joint owner on the title.

This sounds like a really tough situation.

I'm wondering if you could talk to the former insurer and ask for insurance on a monthly basis. I've never done it, but it's worth a try.

If you're having trouble selling the car, I'm wondering if you would be able to work around it by selling it to a dealership. You might or might not get as much, but the issue of insurance and liability would be off the table.
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I would check with her state's DMV laws. They are normally posted on line, however, in most states, it is illegal to operate a vehicle on a public highway without proper liability insurance. It's difficult to determine if the one driving's insurance would cover them or not, so I would just not allow it. IT's too risky. Not worth it, IMO.

I would figure a way to pay the insurance if possible. In many states, you have to turn in the plates BEFORE the insurance expires. They normally don't allow you to keep the plates if you don't have liability insurance.

How much is the car worth? Do you have the authority to sell her car? If she is on MEDICAID, I would be very careful. She is entitled to have one car to her name, but if the car is sold those proceeds become money and that could affect her eligilbility for Medicaid. I would get reassurance that the sale won't mess up her qualification. You can read around this site or check with a Medicaid attorney.
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