As a cosigner, you don't have ownership rights to the vehicle so you can't repossess it from the primary borrower. (However, if you were a co-borrower, it's possible that you could jointly own the vehicle with the other borrower.)
Can a cosigner repossess a car? It's important to know that taking possession of the car if the primary borrower defaults, or “taking matters into your own hands,” is not a legitimate substitute for legal action.
While you won't have any legal rights to the vehicle unless granted permission, you must be prepared to cover payments, late fees and collection costs if the borrower defaults. Failing to keep up with car loan payments will negatively impact your credit score.
In most states, only the person on the title owns the car. Being on the note (loan) for the car typically does not give a person any ownership interest in a vehicle unless their name is also on the car's title. Again, this is a general rule.
Keep in mind that a cosigner can't take possession of a car they've cosigned for. A cosigner doesn't have any legal rights to the vehicle, so they can't take a car from its rightful owner, the primary borrower.
However, if the primary borrower defaults and the co-signer doesn't step in to pay, the co-signer is held responsible, and their credit score may suffer. Co-owners, on the other hand, are equally responsible for the loan from the start. If payments are made on time, both parties' credit scores can improve.
Request release from a co-signed loan
Co-signers can make a written request to the lender to be released from a loan. In certain cases, like some student loans, there may be a provision that allows a co-signer to take their name off a loan.
Cosigners can't take possession of the vehicle they cosign for or remove the primary borrower from the loan since their name isn't on the vehicle's title.
As we spoke about above, it is at your discretion to peacefully take the car if you have a key and access to it as an owner. If you do not have a key and this is the first time that you are sharing this since we started the discussion, then you cannot take it back on your own.
Key takeaways. When you co-sign for a loan, you are equally responsible for paying it off, and promise to repay the loan if the primary borrower defaults. Co-signing a loan doesn't give you partial ownership of the property the funds are paying for — such as a vehicle or boat.
There's no such thing as "primary" owner. You are either a co-owner on the title or you are not. The car is legally titled to each of you, so neither of you could be accused of theft if you took possession of the car or drove off with it.
If you want to sell the car by yourself, you may not be able to – you're likely to need your co-borrower to complete the sale. Both of your names are on the title, which can make selling the vehicle complicated. You're also likely to need your co-borrower's permission to transfer ownership legitimately.
To remove a cosigner from a car loan and title, you typically need to refinance the loan solely in your name. This involves applying for a new loan based on your creditworthiness and income, which can be challenging if your financial situation has changed since the original loan was taken out.
Repossession is really bad news for both the borrower and the cosigner. Not only will the borrower lose their mode of transportation, but one of you will likely have to pay the remaining balance, and credit scores belonging to both of you will take a hit in the process.
He can not take it away from you. But, if you are both in the title & registration card, you are both co-owners too. If you are in the title alone, it is your car.
While you don't necessarily have the same rights to the vehicle as the primary borrower, you – as the co-signer – are equally responsible for ensuring the loan is paid back. If the primary borrower doesn't make their monthly loan payment, you will be asked to make the payment.
– While the cosigner is contractually committed to the loan, they have no rights to the vehicle. Even if they find themselves having to take over payments, they cannot take possession of the car.
Yes, you can sue the person you co-signed for if they don't make the payments they promised to make. You may be able to get a judgment against them in court, but it could be hard to collect that money since they didn't pay the debt in the first place.
Key takeaways
A co-signer or co-borrower can request a release from a car loan, refinance the loan, pay off the loan or sell the vehicle to remove themselves from the loan agreement. It is important to communicate with the other borrower and come to an agreement on how to handle the loan before taking any action.
The order of the names on the title do not matter.
Remember, the primary borrower legally owns the vehicle, so an auto loan co-signer cannot take over without the consent of all parties and a refinance loan.
Cosigners can take the primary borrower to court if the primary borrower fails to repay the loan or otherwise fails to fulfill the terms of their agreement.