TACOMA, Wash. -- It's one of the biggest mistakes you can make when selling a used car -- not filling out a seller's report. It's a mistake that can have serious consequences months, even years after the sale.

Don Watson considers himself a car guy. He's bought and sold dozens of vehicles and never had a problem. That is, until he sold an old Dodge Spirit.

"He paid me in cash and I gave him the title," Watson said. The buyer indicated he would change over the title.

"He told me he would take care of that," Watson said.

Watson was going to file a seller's report. But when he found out the buyer gave him a fake name and bogus phone number, he decided to skip it.

Big mistake.

A few months later, Watson got a notice from SeaTac police that said his car had run a red light, and Watson was still the registered owner. Luckily, a judge dismissed the ticket.

Then the car was in an accident. Watson wasn't driving, but the other person's insurance company wanted him to pay $3,800. And the tow company wanted $550 -- a bill that was sent to collection when Watson didn't pay.

"Most people don't read the back of their titles when they sell a vehicle," said Gary Petersen, owner of Pete's Towing. "They think if they sign a title off, that it's out of their name and the no longer have any liability to it."

Carena Baker of Lake Stevens has a similar horror story. She got rid of an old Geo Metro because it wasn't safe to drive any more. The tow company promised to scrap it. It said so right on the paperwork.

So it was quite a shock when she got a call from an impound lot.

"They said it was in an accident," Baker said. "And I go, 'How was it in an accident? It was supposed to be crushed.' And they said apparently it wasn't because it was on the road."

Her old car was on the road, driven by someone else and involved in a serious accident.

The storage charges were already $400 and climbing.

"Because it was still in Carena's name, Carena was legally responsible for it. So we paid to have it taken out of impound," said Baker's mother, Karen Nemeyer.

But the worst was yet to come. The driver of the other car was injured in that accident and their insurance company wanted Baker to pay up.

"$15,000 is a lot of money to be forking out for something I didn't cause," Baker told me. "I wasn't behind the wheel. I wasn't the one driving."

It took Baker months of work to prove she had gotten rid of the vehicle and eventually the legal action was dropped. Or at least that's what she thought.

Nemeyer says it was quite an ordeal for her daughter.

"Yes it really was a nightmare," she said. "It has been a nightmare, an ongoing nightmare."

And that nightmare continues. Baker just received a letter from a collection agency. It turns out the insurance company sent the claim to collection. The bill is now more than $20,000.

I contacted the state Insurance Commissioner's Office who promised to look into Baker's case to see if they can help her get this monkey off her back.

So how do you keep this from happening to you? Make sure you file a seller's report whenever you sell your car or transfer title. Don't rely on someone else; you do it right away. You can do it online.

For More Information:

Washington State Department of Licensing: Report of Sale

YouTube: Report of Sale