BigJam

A friend of mine was telling me that a co-worker of his was planning on taking over the payments of somone else's car. My question, once the car is paid off, who owns it? The original owner or the person who took over the payments? Has anyone heard of this type of thing going on? Please fill me in. Thanks

kensteele

Since you cannot take over the payments of a car, the question doesn't make sense.

If you make payments on a car that you don't own, then you won't own the car when you finish making payment.

If you want to legally assume payments for the car, the outstanding balance on the car must be paid in full to the lienholder to release the title to the new owner, whether the owner is another bank or an individual.

Basically whoever's name is on the title is the legal owner of the car, no matter who made the payments. If you can somehow convince the bank to allow a promissory note to be amended changing the debtor from one person to another without changing the terms of the security agreement, the title must be changed also. But somehow I doubt a bank will change any of the debtor terms short of a co-signer; they are more than happy to obligate more people to protect their interests.

If you have only been sending money to a bank and that's all nothing else (sounds like a gift), thinking that you will eventually own the car, you'll have to go to court if there is a dispute since you are not the owner simply by making payments on someone else's loan. Bottom line is owner is name on the car title less any liens.

Since I am not familiar with "taking over payments", I hope this helps. My advice, if it's a co-worker, this arrangement "taking over payments" is a bad idea. If you want a car, go get your own loan.

AQUI NO!

i hsve only heard of tsking over payments on a lease. at the end of the lease the owner can choose to buy the car.

Doom878

Bank wouldn't want to just change owners as they might not be as creditworthy as the previous owner. Avoid the headaches and just outright buy the car.

phipark

You can do a transfer of equity. However, you will have to go through the financial instutition where whomever the lien is filed with. They will have to check your credit, fill out a couple forms, then done. The contract must be current, meaning no past due balance, at the time, also.

zamo

and IBTMtomoney&investing

chef chris

Don't know how he will transfer equity in a car that the bank owns, not his co-worker.

Not to mention, the bank will not transfer title to anyone unless they've met their underwriting guidelines(ie: has applied for a loan, credit check, paystubs, etc).

zamo

it should be called transfer of liability or so.

This can be done at least with leases. I am not sure about loans tho, but makes sense.

In any case, if the buyer gets a loan to payoff the balance and change the title lienholder, he is pretty much gonna pay tax for transfering that title, meaning again, tax over a "taxed payoff" loan.

Doom878

If on an owned car that this can be done this might be a wholesale thing. I was with BOA for 4 yrs and we never did this.

TSX 'R' US

I tried to transfer the rest of my Dad's car loan onto my name so I could pay the rest off as a gift... But the bank wouldn't let me cause my name was not on the title and I'm not on the insurance plan for that car.

dallison

what if someone wants to buy my car but i still owe on the loan, how would honda financial handle something like that??

indoMFP

you can take over payments on loans and also on leases. But the fact of taking over payments on a loan, the original owner has to be the co-signer of the loan you assume. You have to be of better credit worthiness than the original owner. This is the only way that someone can own a car by paying less than the market rate.

The money paid by the original owner (he forgives you) needs to be treated as income to you. This is only for tax purposes (don't go there....it can get complicated). Banks are more willing to allow you to take over a lease, since the dealership has the the title, but on a loan the bank assumes the title until it is paid off. They want to make money on the terms, so they want to hold the original owner liable..... (fees and penalties)....

Tell your friend, if this is legit, he/she got real lucky they found a bank that will do it..... and also proceed with caution.... good luck and I hope I helped....

Shoofin

Well, I know in a lease, you can simply call the bank and ask to do a "Lease assumption", in which you're assuming someone's lease. They would send you a credit app to mail back to them, and like any credit app for a car they would have to approve it and switch everything over to the new person. Most banks would not still tie you to the lease if someone else assumes it, but there are a few banks that will still have your name tied to the account even though someone else is making the payments, which is bad, because if they screw up and miss or make late payments, it would hurt your credit too. As for financing, I'm not sure about someone assuming a finance, it might be possible. I would think the best way is to have them pay it off and refinance it, but you might be able to assume a finance...Not sure though, you would have to contact the bank and find out.
Ed