Many times throughout the year we have clients call to tell us that they are trading in a car for a new one. However, when we look up their plate in the Registry it is still active on the old car. Because auto insurance is compulsory in Massachusetts all active plates are required to maintain insurance. Insurance companies are not allowed to cancel insurance on active plates except for non-payment. In these cases the customer ends up carrying insurance on both vehicles even though they only have possession of one.
How does this happen? Here are a few of the most common situations that I have seen.
- The car that is being traded in is registered in a name that is different from the owner of the new car. For instance, the old car is registered in the husband or wife’s name but the new car will be registered in both names. Because the owning entity is different between the old and new car the plates cannot be transferred onto the new car.
- The old car is owned while the new car will be leased. In this case the new car is registered in the name of the leasing company and new plates are required.
- Even if the owner is exactly the same it can still happen. For instance, the person trading in the car decides that his current plates are tired looking and he wants new plates on his brand new car.
In all of these cases the old plates need to be cancelled with the RMV in order to cancel the insurance on the old vehicle. Here is the simple rule to follow. Never leave a dealership with your new car without having either the old plates or a Plate Return Receipt in your possession. Many dealers can cancel your old plates from their office. If that is the case, don’t assume they will do it. Make sure they do it before you leave. If the car dealer does not have the capability to cancel them you can cancel them on-line at http://MassRMV.com. In the rare case that your plates can’t be cancelled on-line you can bring them to the RMV or better yet, call your agent to bring them for you. If you do cancel them on-line, take the extra precaution of cutting them in two so no one takes them out of your rubbish and puts them on another car.