I'm loaning my friend money to pay off their car and putting the title in my name, am I under any liability?

Question

I'm loaning my friend money to pay off their car and putting the title in my name until they pay me back in full. Am I under any liability if they get into a car accident, have the car stolen, etc? What would happen to me if something like that happened?

Answer 1

you must carry the insurance in your name and list them as drivers

Answer 2

The car is in your name, so if your friend gets into an accident, car gets towed, friend gets parking tickets, etc., they come looking for you.  I wouldn't put the car title in your name.  Draw up and have your friend sign a promissory note outlining the terms of the loan and if he/she doesn't pay you back, you can take your friend to court.  Much better way.

Answer 3

Yes. This is a potential mind field, don't do it. Money, loans and friends so not mix

Answer 4

you are setting yourself up for a fall. i've seen this before. they won't pay you back and your credit will be c**p when they drive off with the car and dont repay you.

Answer 5

Yes, you are.

Answer 6

Check with your and/or their auto insurance agent. They might not be able to get insurance if their name is not on the title. This might couse them to not get insurance at all, and if they do get into a wreck then it is YOUR car that was uninsured!

Answer 7

get yourself listed as the creditor/financing company on the title - just like their current title says. Why are you doing this? - what's the benefit for you? - are they paying you 10% interest? make sure they have maximum collision and comprehensive insurance coverage

Answer 8

Better to be put on the title as the lienholder.

Remember cars depreciate incredibly fast. So for the money you are loaning in a couple of years you may have to rep a car that's worth about half of what you loaned.

Answer 9

Yes, keep the insurance in your name, you will also be liable for their parking tickets if the registration is in your name.