<human>: Can you summarize the given text in a few sentences?

This all started when me and my SO moved in together and realized we didn't need two of every vehicle. Being that I made most of the repairs on his car he let me decide who it went too upon mutual approval (my car being newer and more maintained) . I chose a co-worker who I know has to take 2 busses into work every morning and supports a non working spouse thinking that they would be grateful and prompt.

 I was wrong and they dragged their feet getting proper paperwork and never even bothered to go and check on the car after taking ownership of keys. I had left it in front of a friend's house but still on the street in a residential parking area. The day they said they would pick it up I informed my friend and he stopped watching it, but they never picked it up. After 13 days and 3 weekends they finally went to move it and it had been stolen and at which point they called us and we all filed a police report together. 

The next day on day 14 she emails me that she is sending the title and keys back and I should buy a new title because the old one is ruined since it's signed over to her and should they recover the car she would take it then and can we cancel the release of "sale" (it was a gift) because she isn't going to register it in her name now. I am so upset and feel horrible now because I convinced my SO to give her a car and she fell thru and could now cost us a lot of money if we cancel the sale and it turns out impounded . My SO being a good guy wants to cancel the sale once keys are recovered (they mailed them but somehow haven't arrived yet) to stop fees accuring since it is past the 15 day mark. But I feel horribly betrayed and feel she should pay for her negligence. I told my SO I will take responsibility for whatever choice he makes because I did give him Ill advice concerning something in his name. Am I over reacting? Should we just cancel the sale and write the person off? Or leave it and let them pay for not doing their part in a timely matter?
<bot>: I subsequently ruined a friendship trying to be nice.  I also feel like a put my SO in a bad spot, though they are being supportive.