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Can I Get Someone to Take Over My Car Payments?

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If you can’t make your car payments, can you just find someone who can? Credit.com blog reader Carlos asks:

I have had my car for 5 months my payment is $330 but I will soon be getting married and getting my own place. I have tried to advertise my car and have someone take over loan on my car and everyone is just trying to get a notarized agreement and keep the car under my name. I won’t be able to make my next payment.

It sounds like Carlos is hoping is that someone will officially take over his payments and assume his loan. But that may not be possible. “In most cases, car loans are not assumable,” says Edmunds.com Senior Consumer Advice Editor Philip Reed. “When the registration and title are transferred to a new owner, the lender needs to be notified. The lender will then step in and require a credit check to make sure the new owner can make the payments. This leads to the initiation of a new loan at the new owner’s credit level.”

Policies with regard to auto loan assumptions vary by lender. A representative from Wells Fargo said its car loans are not assumable, while a representative from Ally Financial said that it will “work with a customer to determine whether an assumption is an option for them. If the assumption is allowed, the person taking on the finance contract would need to fill out an application to see if they qualify to assume the responsibility of the vehicle and payments.” (Of course, someone who qualifies to assume a car loan can shop for a car and not worry about taking over someone else’s payments.)

That doesn’t mean Carlos couldn’t let someone else drive his car and make payments to him, so he can make the payments to his lender. But that can be risky.

If the person who is driving the car doesn’t pay on time, Carlos will have to try to get the car back; in a sense, he will be repossessing his own vehicle. And anyone who has repo’d cars for a living knows how challenging that can be. In the meantime, he could fall behind on his car loan if he isn’t receiving the funds he needs to make the payments each month. (Here’s a guide that explains what to do if you can’t make your car payments.)

Another concern is that the new driver could put a lot of miles and/or wear and tear on the vehicle. And that, in turn, could make it more difficult for him to sell it in the future.

And then there is the issue of insurance. Carlos would have to make sure the car remains fully insured while registered under his name. One way to do that would be to keep his insurance and add the new driver to his insurance policy. But “if the additional driver has a poor driving history or is young, the rate is likely to increase,” warns Laura Adams, senior insurance analyst for insuranceQuotes.com. Not all insurers will cover an unrelated driver living at a different address, so drivers attempting to do this should check with their own insurance company and shop around first.

Another option would be for the new driver to get insurance and add Carlos on “as an additional insured, so he would be notified of any changes,” says Adams, adding that “Some carriers will allow you to insure a vehicle that you don’t own, as long as you have a good reason.” But that’s also risky. One day (and one accident) without insurance could create a huge financial mess — and damaged credit scores — for Carlos. (You can see how your car loan is impacting your credit scores for free on Credit.com.)

Guarding His Own Credit

Finally, there’s the risk that the new driver could run up unpaid tolls or parking tickets that may end up in Carlos’ name since he is the registered owner of the car. One of these items could wind up on his credit reports as a collection account, and his credit scores could drop significantly. A recent settlement with the credit reporting agencies and 31 state attorneys general will change how certain fines are reported in the future. Here’s what the credit reporting settlement will do.

If Carlos has a friend or family member he trusts to take over the payments until he gets back on solid financial footing, letting them assume his car payments might work. But relying on a stranger to make payments, insure the vehicle, and take good care of it is fraught with risk. If he decides to move forward anyway, he will want to get the agreement in writing, get a deposit and make sure the car remains fully insured.

Given his precarious financial situation, though, a better strategy might be to talk with a credit counseling agency or bankruptcy attorney to explore his options for getting out of this car loan.

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  • heavyw8t

    I am not getting what the desired end result is here. If you can’t afford the payments, you sell the car and get out of it at least what you owe. What did I miss?

    • Paul Martinez


    • faaaaq

      You completely missed the point, in every way. He is still upside-down on the vehicle, meaning if he sells it, he would still owe money on the vehicle, meaning to get it paid off so the new owner legally owns it and can get the title, he would need to put forward both the money from the sale AND thousands of his own dollars, as well as hoping the buyer is OK waiting a while to get the title. Obviously if the amount he still owed was equal/less than the sale value of the vehicle he would simple sell it…

  • Breezy Mane

    So I financed a truck for me from a Buy Her Pay Here dealership,I’ve had it for about 6 months but things got hard for me so i couldnt afford to keep paying for the truck so i found someone to take over the truck and payments. All i did was go to a Notorizery office with him and we came down to a Mutual agreement saying he is responsible for anything and everything that happens to the truck and is responsible for having full coverage insurance at all times. But dealership bugged me about the insurance for about a Week straight and the guy refused to put me on his policy as the driver, so i had to pay for insurance again since he couldnt add me as driver on his policy. so i said hey I’m just gonna do this the right way, i went to dealership and payed taxes and fees for him so he can sign paperwork and credit app in his name. But he’s out of town working now they are looking for the truck ! What do i do???PLEASE HELP

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