A co-borrower can legally take a car if their name is on the title, as they have equal ownership rights, whereas a co-signer (who is not on the title) cannot. If both names are on the title, either party can generally take possession without the other's consent, often treated as a civil dispute.
Generally, both borrowers are listed on the car title, which might be something you want to avoid if you've split with your ex for good. If the other person is also listed on the title, they can take the car away from you and there may be little you can do about it.
As an equal partner on the financial agreement, a co-buyer shares the benefits of ownership and the financial accountability. This means that the co-buyer and the primary borrower have the same rights, such as the ability to sell the vehicle or trade it in (though both parties would have to agree to do so).
You can remove a co-borrower from an auto loan in two ways: Refinance the loan: Take out a new loan in your name alone and use it to pay off your existing loan. Loan assumption: Ask that your co-borrower be removed from the loan.
Once the vehicle is sold at auction, the lender can pursue both you and your co-signor for the deficiency debt – the difference between what you owed on the vehicle less the auction sale price plus any cost associated with the sale, interest and late charges, etc.
Similar to a home loan, you can be a cosigner for an auto loan. However, being a cosigner doesn't give you rights to the car that loan will purchase. A cosigner doesn't have any legal rights to the vehicle, so they can't take the car from its rightful owner, the primary borrower.
Removing a co-signer from a car loan requires the loan to be paid off. If there's a balance remaining, that amount must be refinanced. The primary borrower could possibly qualify alone, or a new co-signer may be needed.
With equal obligations to the finance contract and rights to the vehicle, the situation is simpler for a joint loan than a cosigned loan. However, if later selling the vehicle, the co-borrowers must each agree to the sale since both names are on the title and both signatures are required for the paperwork.
Get a loan release
Some lenders have a release option for co-signers, according to the Consumer Financial Protection Bureau. A release can be obtained after a certain number of on-time payments and a credit check of the original borrower to determine whether they are now creditworthy.
As a cosigner on an auto loan, your credit will suffer if the lender repossesses the vehicle. You may still be responsible for paying on the loan, even after repossession. To avoid repossession, work with the lender to devise a payment plan or be removed from the loan.
Quick Answer. A co-borrower on an auto loan is someone who has equal claim to the vehicle, as well as shared responsibility for paying the loan back. A cosigner, on the other hand, is there to help the primary borrower qualify; they don't own the vehicle, but they share responsibility for the loan.
Here are the four main ways to remove a cosigner:
A co-owner does not automatically have legal power to seize the vehicle from you without a court order; most disputes become civil actions (partition, replevin) not criminal recovery.
The 20/3/8 car rule is a financial guideline for buying a car, suggesting you put down 20% of the price, finance it for no more than 3 years (36 months), and keep your total monthly car expenses (payment, insurance, etc.) to 8% or less of your gross monthly income. This rule helps you avoid being "underwater" on your loan, pay less in interest, and maintain a healthy budget for other financial goals like savings and investments, focusing on affordable, reliable transportation rather than luxury vehicles.
To remove one name from a car title, treat it like a sale or gift: the person being removed signs as the seller on the current title (often in the reassignment section), and the person staying on the title signs as the buyer, then take it to the DMV with required forms (like a new application, ID, and possibly a bill of sale or court order for divorce/death) to get a new title issued, handling any liens with the lender first. The key is whether the title says "AND" (both must sign) or "OR/AND-OR" (either can sign).
Yes, you can remove someone from a mortgage without refinancing but it's not typical. Options include loan assumption, court-ordered removal, or lender release.
To complete the car loan transfer, the potential new owner will need to file a new loan application with the current lender. They'll need to go through the loan approval process (including a credit check) before they can be approved to assume your car loan. Transfer ownership.
If the co-signer backs out and the defendant is returned to custody, a new co-signer or cash bail must be provided for release. This can delay the process and often makes it harder to get out again, especially if the judge sees the revocation as a red flag.
A partial payment might buy you a little time, but it will not prevent repossession. The loan is still considered in default, and it's up to the lender whether to cut you some slack.
Alternatives to Voluntary Repossession