We are not legal experts so you should contact a lawyer for your state that specialized in liability laws such as this to find out your complete liability in this situation. We can however give you general information that we know regarding what typically happens with co-signers. State laws do differ so again contact a lawyer in your state to get the most accurate information about your situation.

In general if you are only on the note and not on the title of your son's vehicle then chances are that you would not be responsible or liable for the other party's damages since you only guaranteed the loan and are not part owner of the vehicle.

A cosigner on an auto loan, who is not a titled owner on the vehicle, is usually not liable for injuries or property damage caused by the driver of the vehicle. There are certain circumstances however when state laws can find you liable though if you for instance knew that the person you were co-signing for was negligent and should not have been driving.

We have read cases where if the cosigner provided money or helped secure a vehicle for the driver by cosigning and knew that the person who would be driving the vehicle presented an unreasonable risk to the public (i.e. drove drunk, had seizures, etc) then there may be liability on the cosigner. This is termed in some states as negligent entrustment.

It sounds lucky that the other car was barely damaged in case you are on the title and can be held liable as co-owner of the car. If you are on the title, again state laws differ however in many cases you could along with your son be held liable for the damages he caused to the other party. Owners of a car normally have vicarious liability for those that operate their vehicle.

Even without being on the title you, the co-signer, may be in trouble with the lender since the vehicle you guaranteed the loan for was uninsured.

Most loan agreements obligate the borrowers (signer and co-signer) to keep the vehicle (the collateral/asset for the lien holder) insured. If they fail to keep insurance on the asset, the lien holder may force place insurance on the vehicle and charge the borrowers, repossess the vehicle or, if the uninsured vehicle is destroyed (totaled out), the lender can demand full payment of the balance of the loan. And as you know if the car was totaled out and the driver, your son, does not pay than the lender will come after you, the co-signer. And if the car is damaged but not totaled out the lender will expect the vehicle to be properly repaired.

As a co-signer you could have requested to be listed on the car insurance policy as an additional insured so that you would have been aware if insurance was taken off the vehicle. As you know now it is important that your son keeps the proper insurance on the financed vehicle. Your son should have had not only Liability coverages to cover the damages he did to others but physical damage coverages of Collision and Comprehensive so that the damages he caused to his car would have been covered for repairs or the value of it if he totaled it out.