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Letting friend take over car note

Discussion in 'BBS Hangout' started by The Boz, Oct 27, 2014.

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  1. The Boz

    The Boz Member

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    Need advice please. I have a vehicle I no longer need. My friend needs vehicle. He just bought a house, so he can't finance a vehicle at this time. He wants to take my vehicle and pay me the monthly payments. I am okay with that, because if he defaults on me I can take vehicle back and have a win on the payments he made.

    My question is about insurance. Finance company requires vehicle to be fully covered and state law requires liability. Do I keep paying insurance and charge him? If not, will the finance company be okay with him getting insurance coverage on the vehicle?

    One more thing. Should I make some kind of written contract with friend? Payoff of vehicle is about 20k.
     
    #1 The Boz, Oct 27, 2014
  2. Mr. Clutch

    Mr. Clutch Contributing Member

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    I don't get why he can't finance a vehicle just because he bought a house.

    Yes, get a contract.
     
    #2 Mr. Clutch, Oct 27, 2014
  3. SwoLy-D

    SwoLy-D Contributing Member

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    Explain how this is so, like Mr. Clutch and I are wondering as to how you know this for a fact.
    How do you know you will have a win? If he defaults YOU will have to make the payments.
    I think that you will be liable for him or any damage he incurs as an "uninsured driver" because the car and insurance policy are under your name. Think of the worst of scenarios... what if he commits a crime with your car or crashes into someone on purpose? Legally, you're the one that will have to pay.

    Or I'd like to hear someone with insurance agency experience clear this up.
    Yes. :eek:

    Lastly, why don't you need a car anymore? It's a HUGE city. Please don't tell me that everything is within a block from you or within the train's ride.

    Anyway, I've never heard of anyone taking over someone else's payments end well, much less WITHOUT a contract. You'll be risking losing a friend all over doing "a financial favor" y'all both can't cover.
     
    #3 SwoLy-D, Oct 27, 2014
  4. Dgn1

    Dgn1 Member

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    Don't be a fool
     
    #4 Dgn1, Oct 27, 2014
  5. Dairy Ashford

    Dairy Ashford Member

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    You're committing fraud to your lenders, though; I'm just wondering if you'd be able to enforce a contract agreeing to an illegal transaction.
     
    #5 Dairy Ashford, Oct 27, 2014
  6. Space Ghost

    Space Ghost Contributing Member

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    Pretty much this.

    A vehicle can not have overlapping insurance. If your friend had his own insurance policy, you might be better off. However since he does not have a car, he can't have his own policy. He can probably get some third party insurance, however the state will still require you to have the car insured under your name.

    Just avoid the mess altogether and go buy him a jalopy.
     
    #6 Space Ghost, Oct 27, 2014
  7. Mr. Clutch

    Mr. Clutch Contributing Member

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    Why is it fraud to the lenders? He'll still make the payments then receive payments from his friend. If his friend stops paying he still makes the payments anyways.

    Anyways, he should just sell his car to his friend.
     
    #7 Mr. Clutch, Oct 27, 2014
  8. codell

    codell Contributing Member

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    He normally canr insure it himself. He has to have an insurable interest in the car which he doesnt have.
     
    #8 codell, Oct 27, 2014
  9. Phillyrocket

    Phillyrocket Member

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    Just don't do it. If he just bought a house his credit should be good enough to buy a car.
     
    #9 Phillyrocket, Oct 27, 2014
  10. cheke64

    cheke64 Member

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    This isn't going to end well
     
    #10 cheke64, Oct 27, 2014
  11. Yonkers

    Yonkers Contributing Member

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    http://budgeting.thenest.com/can-someone-over-payments-financed-vehicle-24578.html

     
    #11 Yonkers, Oct 27, 2014
  12. fallenphoenix

    fallenphoenix Contributing Member

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    he may not be eligible for the same rate your getting, so in that sense it's fraud.

    i'd only do this if you wouldn't mind losing this friendship. things like this tend to not end well.
     
    #12 fallenphoenix, Oct 27, 2014
  13. The Boz

    The Boz Member

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    I knew all the "don't do it" comments were coming. That was a given. My main question was about the insurance. To answer some of your questions.

    Friends income to debt ratio will not let him finance car because of the new house payment.

    I needed vehicle for job. Bought vehicle. Company paid me monthly allowance. I quit after six months. New job provides vehicle I drive as my own. Now I can't afford vehicle I bought. Upside down on loan. Payoff is 25k, value is 22k.

    Friend has vehicle that is fully insured. He wants mine also.
     
    #13 The Boz, Oct 27, 2014
  14. benchmoochie

    benchmoochie Contributing Member

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    I would go with NO. What if he runs into someone with your car and jacks them up then what happens? say worst case involuntary manslaughter.


    Anything I don't need like a second car, I usually just sell and take the cash, liquid asset and less liability..also no extra insurance, registration etc.
     
    #14 benchmoochie, Oct 27, 2014
  15. Mr. Clutch

    Mr. Clutch Contributing Member

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    You want this guy who has too much debt to now be responsible for payments to you?

    Seems risky. I would just try to sell the car for as much as possible.

    By the way, apparently there are sites for this. You should check them out. http://www.takeoverpayment.com/
     
    #15 Mr. Clutch, Oct 27, 2014
  16. KingCheetah

    KingCheetah Contributing Member

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    What could possibly go wrong?
     
    #16 KingCheetah, Oct 27, 2014
  17. benchmoochie

    benchmoochie Contributing Member

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    Just find a new buyer that gets a bank approved loan for the remainder balance of the note and sell to him. boom problem solved
     
    #17 benchmoochie, Oct 27, 2014
  18. rrj_gamz

    rrj_gamz Contributing Member

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    This! Don't do it bro
     
    #18 rrj_gamz, Oct 27, 2014
  19. The Boz

    The Boz Member

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    Easier said than done. Who wants to pay 25k for a 22k truck?

    I am afraid of having the truck repossessed and ruining my credit. I am aware of all the bad things that can go wrong if I do this. Just trying to save my credit.
     
    #19 The Boz, Oct 27, 2014
  20. cheke64

    cheke64 Member

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    What kind of vehicle is it?
     
    #20 cheke64, Oct 27, 2014
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