If I co-signed on an auto loan...?

Question

and I've made an equal number of payments on the car, both of our names are on the registration, it's insured in my name, and I just found out that the other person has been driving with a suspended license, do I have any legal right to "re-possess" the car from him? He says I'm just security and that I'm not actually an owner.

Answer 1

You are equal owners, you both have the equal right to possess the vehicle (assuming you are both in title which it appears you are since you are on the registration and loan). You could take the vehicle from him and there is nothing that he could do. Are you in a position to do that? Of course, then he can just take it back and there is nothing that you can do.

You do not say why his license is suspended. If he can get his license back, make the payments and get insurance, then it would obviously be the best situation. In some states you could be charged with a crime for allowing a person with a suspended license to drive your vehicle. You could also be held civilly liable for an accident. This is not the case in all states so you should talk to someone in your state.

I think you should, at the very least, send him a certified letter demanding return of the vehicle. In that letter I would provide a date specific when the insurance will be cancelled if he does not return it. The finance company will place insurance on the vehicle if you do that and it will probably end up getting repossessed. At that point you can negotiate directly with the finance company to have his name removed from the title and to get the payments caught up. If you cannot do that, you probably are just going to end up with a repossession on your credit record. That is among the worst things that you can have on your credit. You could also spell out these options to him in your letter and he may just choose to do the right thing rather than face all of these problems.

Co-signing is a very big commitment. One that you cannot get out of until the end of the contract. This is a great example of why you should not co-sign. If someone needs a co-signer and you feel compelled to help, have the vehicle put completely in your name and then draw a contract between the two of you. That way you could always take the vehicle back if they fail to fulfill the terms of the agreement.

Answer 2

In any event, you need to get an attorney involved on your behalf.

Laws vary from state to state, but in general, the most important thing would be how the car is titled as to what your rights are in the matter. If if the car is titled in both your names, you are not just a co-signer, but a CO-OWNER and in light of all of the above, you may have grounds to repossess the car.

If you are not listed on the title of the car, your ex is correct, you are a guarantor of payments on the loan, not an actual owner; however, if you have proof of all you have stated above, you may be able to get ownership of the car by a Writ of Replevin.

As the insurance for the vehicle is in your name, but both of your names are on the registration, if your ex would be involved in an accident it would go against your insurance (although he could be sued also as he is the legal owner of the car). Any victims could sue both of you whether the car is titled in your name or not.

Answer 3

I would contact a lawyer. If you have made an equal number of payments and can prove it with cancelled checks, then I think you might be able to prove you are more than just a co-signer. The fact that the registration is is both of your names and the insurance is in your name just goes to support your position. It just might get a little ugly, that's all. However, it sounds like things are already getting that way, so it's best to protect yourself.

Answer 4

You are legally responsible for the loan. You need to check with a lawyer in the state you are in, or, at least check with the lender. IF you are on the title, you share ownership with the vehicle.
Realize, however, that you are liable for everything that happens to the vehicle. You would do well to work out what authority you have over the property quickly. In some states, you are also on the hook for liability to the vehicle if there is an accident, as well.

Unfortunately, you have just discovered one of the dangers of co-signing on someone's loan.

Answer 5

This is a difficult question for a number of reasons.

One problem is that this is a civil issue that can vary by law from state to state.

Even though you are a co-signer on the loan, does your state law provide for YOU to repossess the vehicle or the bank?!

Because there is still a "lien" or money owed on the vehicle, the vehicle is actually owned by the lender until the debt is paid.

The next issue is not about who is on the registration...but who is on the vehicle title!

Because the lien holder by law holds the lien, the lien holder also maintains the title!

Your best bet is to either contact an attorney familiar with your state laws or even the local law enforcement agency who would be more familiar with your issue.

Best wishes!

Answer 6

If the car has your name on the title AND is insured in your name AND you are knowingly letting a person with no license drive the car you are really putting yourself in a position to be sued in a major way!

If you are on the title you are a legal co-owner.

Answer 7

Ownership and liscencing are two different areas. If you are a co-signer on the loan you can't assume the property until the primary defaults on the loan. If you are a co-owner you would have to buy the other party's interest in the property.

Answer 8

yes because it is in your name and they have no license. if the law says otherwise then remove all things in your name including the insurance

Answer 9

I don't think so, better ask a lawyer.