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.
Unlike co-borrowers, who are on the title or have some claim to the property or funds, co-signers have no title or ownership of the property the funds are used for. For example, a co-signer for a vehicle has no legal right to the financed vehicle.
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.
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.
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.
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.
– 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.
Usually, when you cosign a car loan, you agree to be responsible for the debt if the primary debtor doesn't make payments or otherwise defaults on the loan. If the primary debtor defaults on the loan, then the creditor has the right to repossess the car and sell 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.
In general, if someone takes or controls your property without your permission, it could potentially be considered theft. Here if you contacted the police department they would investigate whether it is theft and charge him with a crime if they believe one has occurred.
Co-signing means you are responsible for covering payments if the main borrower cannot, but you do not have any legal rights to the car. Co-owning means both parties have equal ownership and financial responsibility for the car.
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.
Co-Ownership
Each person has an equal claim to the vehicle and can use it as they please.
When the title states “and/or” or “or” in the name field, only one person needs to consent to remove a name. If it only contains the word “and,” both parties need to agree to remove any name from the title. Therefore, you'll need to get consent from the co owner.
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.
Working with a cosigner can help you qualify for a loan you otherwise couldn't get, but if you don't hold up your end of the deal, the cosigner can take you to court.
1. If the car is jointly owned, then the creditor has the right to foreclose on their lien, which would include a forced sale of the car; 2. This is the case even if your car is jointly owned with your wife.
Cosigning a loan doesn't give you any title, ownership, or other rights to the property the loan is paying for. Your only role is to repay the loan if the main borrower falls behind on the payments or defaults.
Co-signing on a car means you`re responsible for paying if the first party fails to, it has no condition on you having possession of the car. You don`t `repossess`, the lender does because their name is on the title is a lien holder. If you don`t want to pay for it then you should not have co-signed.
Your best option to get your name off a large cosigned loan is to have the person who's using the money refinance the loan without your name on the new loan. Another option is to help the borrower improve their credit history.
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.
In other words, if you wanted to get in the car and drive away with it, you'd have the right to do so, since (presumably) you're the owner of the car as well (this does not apply if you're only a co-signer on a loan). You could also take the co-signer to court for financial damages.