California: A mechanic serviced Bob's car, has it in his shop, and verbally agreed to buy it from him. Is Bob liable for accidents before it's sold?

Question

TL;DR

Bob took his car in to a mechanic (M). After M worked on it, Bob decided to sell it to him. It's currently in his shop but it'll take Bob over two weeks to sign over the title.

In the meantime, if he or one of his employees gets in an accident in his car, will Bob be legally and financially responsible? If so, how does Bob eliminate or reduce that risk to himself?

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Additional Context

Bob has a really old car and the check engine light was on. He took it to a mechanic and quoted Bob $2500 for the original repairs: the engine was leaking all over the place, including the oil pan and some broken ignition coils. The car isn't worth that much, but it would last for years after this repair, so it seemed worth it anyway.

Once Bob gave him the go-ahead to work on that, he found $2k in more issues: the radiator is cracked, the water pump is broken, and so is the engine mount.

At that point, Bob decided it wasn't worth the investment. Bob proposed to him that Bob would pay for the work he's done up to that point (M said it was the $2500) and sell the car to him for $2000. Therefore, Bob would end up owing him $500 total.

Both agreed to this, but here's the tricky part: Bob couldn't find his title. Bob also recently changed his address and informed the DMV of that yesterday. According to their website, Bob has two wait two weeks after an address change before Bob can start the process of getting a replacement title then sign it over.

At the moment, the car is in his possession but the title and insurance is in his name. Here's his main concern: if he or one of his employees gets in an accident before the title change, will Bob be legally and financially responsible? If so, how does Bob eliminate or reduce that risk to himself?

Here's the "paper trail," so to speak:

Bob took the car in and signed some paperwork saying he could work on the car. (Come to think of it, he didn't even give Bob a copy!) Bob's been texting him every step of the way to tell him he approves of the fixes he's going to make and saying he wants to sell the car.

But this is all one sided: Bob's been texting M about approving things, but M hasn't been texting Bob about anything; the rest of the details have been over the phone -- including his agreement to buy it from Bob. Bob doesn't even have an itemized list of the amount of work he's put in before the sales agreement (though Bob said he would need to see it before Bob signed over the title).

Answer 1

You’re looking for something called the “permissive driver law.” I’ll include a link to the full text, but here’s a summary:

You still own the car, and the insurance is still in your name. If the mechanic takes your car out for a drive and gets in an accident, the damages will fall upon you and your insurance provider—your insurance would be deemed the “primary coverage” since you own the vehicle. The exception is personal injury—if the mechanic himself gets injured, his insurance is likely liable for that expense.*

This doesn’t have to be the case, though. You don’t have to make the mechanic a permissive driver. If you don’t trust him, or just don’t want the liability, tell him so in writing. Or, you could set limits on the usage, like permitting him to drive around town but not on the interstate. As long as these conditions are in writing, they shield you from all liability related to operation of the car. In fact, it would be a crime for the mechanic to violate these conditions.

You could also potentially be liable through something called “negligent entrustment,” which is basically when you lend your car to someone who should not be driving (i.e. they are too young, have a suspended license, etc.). Based on your question, this doesn’t seem to apply.

*This is generally true, but check your specific policy.