I’m moving overseas for 14 months because of my wife’s job. Unfortunately I have a 1-year old car with a car loan. My dad said he would take over the payments because he needs a car, but how can he drive it legally? I don’t have title because I still owe about 15k. How can I add him to the title? If I do sell, it would probably be at a loss because I’m assuming only a dealer will buy it because of the lien. Plus I’m not sure I have time to sell it to a 3rd party with the title issues, etc. Suddenly I’m in a pickle here.
I’m not sure what state you live in, but here in IL, as long as the car’s registration is kept current, the car is insured and driven by an insured driver, and the car is not reported as stolen, your dad is good to go. If he is stopped by law enforcement and they ask why the vehicle is registered to someone else, he can just say he is the registered owner’s father and he is taking care of business with the car while you are overseas. As long as he keeps the car insured and it is not reported as stolen, this should not be an issue.
I agree with Mark. It is no different then if you or anyone borrows someone else’s car. You NEED to have this conversation with your and dad’s insurance company though, to see what specific adjustments in rates or provisions apply. There may be some differences and you don’t want to be stuck if you inadvertently violate one. Some companies may require some adjustment if you the primary listed driver, is away for 14 months. It will also involve DAD’s provider too. In our state, poof of insurance is required so be prepared.
Your father can drive the car in all the states I’ve lived in: NY, PA, OH, MI, NJ and in every state I’ve ever heard of. What you will have to do is put him as a covered driver on the car’s insurance policy. So, this is a matter you handle with your dad and your insurance agent. Make sure dad and you have a clear understanding of who will make those payments. There is also the matter of insurance, fuel, and maintenance too. Since dad won’t really own the car, what amount he should pay you to basically sublease your car is a detail you’ll need to agree on.
You can sell the car but you have to discuss with the loan company how you clear the lien in the sales process. If you owe more than the current value of the car that could be difficult.
One thing wasn’t clear to me. Is he taking the car for good or do you want it back when you return?
Also, will you be keeping your current residence for when you return? If not, I see a possible complication here, as it may not be legal for you to keep the car registered in your state when you don’t have a residence there. This would especially be a problem if the registration needs to be renewed while you’re gone.
As others have said, you definitely need to run your plans past your insurance company.
If he borrows the car, make sure that he has a copy of the registration card. It wouldn’t hurt to write up a letter to keep in the car stating that you’re the registered owner and that he has permission to use the vehicle for that period of time, with your contact information included in the letter. You could even notarize the letter if it makes you more comfortable.
There’s one other issue to consider. If the car doesn’t come back in the condition you expect for some reason, will this cause a big problem between you? I’d hate to see that happen here.
Thanks for all the responses, guys. He will basically be borrowing the car until we return. His cars are ancient and falling apart and needs transportation for my grandfather.
I’ll call my insurance company right away to discuss the options.
lion9car, we won’t be moving back to California, so the registration is an issue. He wants to register the car in IL where he lives …
I would expect some wear and tear, so it’s not a problem. Plus he doesn’t put a lot of mileage on cars, so it’s almost like parking it for a year.
The more I think about this, if you’re not keeping a California residence and if he lives in Illinois, the registration and insurance issues are going to get tricky. It may be necessary to sell the car to him and have an agreement that you’ll buy it back when you return, although unfortunately you’ll both get hit with sales tax and other fees that won’t be cheap. (Even if you sell the car at an artificially low price to try to avoid the sales tax, I think that most states charge tax on the actual value to prevent this.)
I work at a dealership and have had my fair shair of regestration issues. So here we go:
#1) YOU CAN NOT insure what you dont own, so your dad will not be able to get insurance in his own name. It will have to be in YOUR name with your dad as a legal driver.
#2) goes with #1, the only way you can list your dad as a legal driver (since he is not a dependent) is if you live under the same roof, and since you are not returning to Cali, I strongly recomend you change your residnce to IL and regester the car under your dads address with that being your addess as well. It may be a PIA but it is probably the simpelest thing to do. Also if you keep in the Cali the car will need to be smogged at some point (I think), and I am sure your dad does not want to go to cali to have this done…lol
If you follow one and two, then you keep the loan in your name and make sure he makes payments on time as it is on your credit.
- Visit a state MVD office.
- Call your insurance company.
- Prepare a letter stating the circumstances and store it in the glove box.
- Consider asking your local law enforcement office if they would suggest anything else.