Joint tenancy. With this arrangement, the car automatically goes to the other person upon one co-owner’s death. To create a joint tenancy, list your names as “Mary Smith or Michael Jones. ” In some states, however, creating a joint tenancy allows one owner to sell the car without the other owner’s consent. To prevent that from happening, you can list the names as “Mary Smith and Michael Jones, as Joint Tenants with Right of Survivorship. ” Tenancy in common. Under this arrangement, you can leave your half of the car to whoever you want if you die. To create a tenancy in common, list your names as “Mary Smith and Michael Jones. ”
The statement of agreement: “Mary Smith and Michael Jones agree as follows:”. The details about the loan. “Mary has entered into an agreement with First Lending Car Loans to take out a car loan for $18,000 to purchase a [insert car details]. Mary has agreed to pay First Lending Car Loans the sum in monthly installments of $350, inclusive of interest, for 60 months, due on the first of every month beginning February 1, 2016. ” A statement that you own the car equally: “We intend that this car is owned equally by both of us and we each will pay one-half of the cost. ” Details about how the person not on the loan will give the money to the borrower: “Michael agrees to pay Mary $175 one week before payment is due. Mary will then pay First Lending Car Loans in a timely manner. ” Information on how the person not on the loan can buy out the other owner: “If Mary no longer wants to own the car, then Michael can enter into an agreement with First Lending Car Loans to take over the payments himself, and pay Marry one-half of the difference, if any, between the car’s current resale value and the amount of money still owed. ” An explanation of how the person on the loan can buy out the other owner: “Mary may buy the car from Michael by agreeing to be solely responsible for the monthly payments to First Lending Car Loans and by paying Michael one-half the difference, if any, between the car’s current resale value and the amount of money still owed to First Lending Car Loans. ” Whether the ownership percentage will change if one person fails to contribute to the monthly car payment. For example: “Should either fail to make the required share of the payment, the other may do so. Accordingly, this person’s ownership percentage will be increased. If, for example, Mary makes 12 payments without Michael contributing, her share of the car will increase to 60/40. ” A statement that the agreement can only be modified in writing. The signature of both co-owners.
You must follow your state’s procedures for putting another person’s name on the registration and title. To find the requirements, visit your state’s Department of Motor Vehicles (DMV). In New York, for example, you can’t simply add someone to the current registration or title certificate. Instead, you must apply for a new registration and a new title certificate in the names of both owners. [6] X Research source Buying a used car can trigger different fees that you have to pay. To find the full fee schedule, contact your state’s DMV.
Of course, if the owner took out a loan for the car, then the loan company should have a lien on the vehicle. [7] X Research source There is no reason to refuse to buy a share of a car simply because the owner took out a loan to purchase it. Instead, ask the owner for proof that he or she is current on payments. If you doubt the owner’s financial stability, then you should refuse to buy a share of the car. To find out whether a car has a lien on it, you should ask to see copies of the car’s title and registration. These documents should state whether the car has a lien. You also should get the car’s VIN (vehicle identification number), which is on the car’s dashboard. Take this number to the DMV and ask for a car history. This history will show whether someone has a lien on the car. [8] X Research source Look for liens held by those other than the bank that lent the owner money to purchase the car. If there are multiple additional liens, then you should avoid buying a share of the vehicle.
You will not need permission if you live in:[11] X Research source Kentucky Maryland Michigan Minnesota Missouri Montana New York Oklahoma Wyoming You may also have to pay off other lienholders, such as mechanics who have made repairs but have not been paid. In this situation, you would need to pay the debt and get a release of lien form completed. Contact your DMV for your state’s requirements. If the owner has multiple liens because of unpaid debts, you should think carefully before becoming the co-owner of a vehicle with someone who has trouble paying debts.
An insurance company might not add the second driver to the policy if he or she is not an owner or a family member. [12] X Research source Should the second owner wreck the car, then your insurance company will probably not cover the accident. You should be careful about relying on an informal (particularly oral) agreement. These are difficult to enforce in court because there are no documents. Instead, the lawsuit becomes a “he said, she said” situation. Watch an episode of Judge Judy to see how judges treat these kinds of lawsuits. If you want an informal agreement, then be sure to write down the terms of the agreement in a contract.
Your schedules. When will you need the car? For how long? Can either person use the car for a longer trip? Do you need permission from the other owner? Who can ride in the car? Who owns the objects inside the car? For example, who owns the windshield scraper, the radio (if added to the car), and the floor mats? Can you smoke or transport animals in the car? Can you eat or drink? How do you handle refueling issues: does each co-owner need to make sure that there is a minimal amount of gas in the car at all times? Who will pay for insurance and how much will each driver contribute? Who will pay for the car’s upkeep, such as repairs and inspections? Who will pay for the car to be cleaned?
You should try to be as detailed as possible. The more you can include in the agreement the better. When both co-owners understand the rules, then you can pre-empt most disputes.
Be sure to bring sufficient personal identification to the notary. Typically, a valid driver’s license or passport should be sufficient. Also remember to give a copy to the other owner so that he or she can look at it whenever a dispute arises.
Sit in an open manner. Do not cross your arms or turn your body away from the other person. Make eye contact. Ask the other co-owner about his or her needs. If you don’t understand their situation, ask for more detail. Don’t interrupt. Try to mirror by summarizing the other person’s needs and concerns. After summarizing, ask if you understand their situation correctly.
Remain calm. Effective problem solving requires that you avoid getting too emotional. By remaining calm, you don’t threaten the other co-owner or try to punish them. In this way, you make it easier for the other owner to understand your point of view. [16] X Research source
Amending one part of the agreement might mean that other parts of the agreement must be changed. For example, you and the co-owner might have agreed to split insurance and repairs 50-50 because you had initially agreed to use the car an equal amount. However, if you suddenly need to use the car 80% of the time, then you should expect to pay a greater percentage of the costs associated with the car. Once you and the co-owner have come to a new agreement, you should type it up. Then both owners should sign the new agreement in front of a notary.
The mediator isn’t a judge, and he or she will not be assigning blame. So it is important to be honest when meeting with the mediator. Typically, a mediator will let each co-owner discuss the problems in front of the other co-owner. Then the mediator will meet individually with each person. To find a mediator, you should visit your local courthouse to see if they run a mediation program. They might also have a list of court-approved mediators. [17] X Research source You can also contact your local or state bar association.
Use your court’s self-help center. Some courts have self-help centers where staff assists people who are representing themselves. To find out if a self-help center is available, call your local courthouse. Find a local legal aid organization. Legal aid organizations provide free legal services to those in financial need. To find a legal aid organization near you, visit the Legal Services Corporation’s website at www. lsc. gov. Click on “Find Legal Aid” in the upper right-hand corner and then enter your zip code. Ask if a lawyer provides “unbundled” legal services. Many states now allow lawyers to provide “unbundled” legal services. Under this arrangement, a lawyer can agree to perform only discrete tasks. For example, you might pay an attorney to offer advice, look over your court documents, or even represent you before a judge. Because the lawyer does only the work you give them, unbundled legal services is a good way to keep your legal fees down. [18] X Research source Call a lawyer and ask if he or she offers unbundled legal services.
