How to get rid of a financed vehicle

[swaymonae]

A good friend of mine has a car that he bought only in Nov of last year. He has decided that they payment is too much for him. What are his options?

He has a friend who would like to "take over the payments"

How does that work??

Thanks.

[disneysteve]

Is this a purchase or a lease?

[swaymonae]

Purchase

[disneysteve]

He can sell the car to his friend and use the proceeds to pay off his loan. The friend would get his own financing for the purchase. If there is a difference between the sale price and the loan balance, he would have to pay that out of savings or take a personal loan to cover it.

What he should NOT do is just give the car to the friend and keep the title and loan in his own name, collecting payments from the friend. That is just asking for trouble if anything happens.

[swaymonae]

Is there any way to just transfer the loan over to the other person?

[disneysteve]

Is there any way to just transfer the loan over to the other person?

I don't believe so. The friend has to apply and be approved based on his own qualifications, credit history, income, etc.

[tripods68]

A good friend of mine has a car that he bought only in Nov of last year. He has decided that they payment is too much for him. What are his options?

He has a friend who would like to "take over the payments"

How does that work??

Thanks.

Go to the nearest CARMAX to see how much they are willing to pay that vehicle. Otherwise I agree with Steve, your friend best bet is to sell it privately.

[boosami]

As far as vehicles go, it's possible to take over or transfer leases, but not loans.

[MiikeB]

I am pretty sure you actually can transfer the loan, if the bank agrees to it that is. They would have to approve him like they approved your friend.

[disneysteve]

I am pretty sure you actually can transfer the loan, if the bank agrees to it that is. They would have to approve him like they approved your friend.

Assuming that is possible, would there be any advantage to either party to doing that vs. just selling it to the friend and him taking out a new loan?

[Seeker]

Assuming that is possible, would there be any advantage to either party to doing that vs. just selling it to the friend and him taking out a new loan?

There are no advantages for either party. What usually happens is that when a "friend" takes over payments, and then stops paying for any reason, the original person gets hit for the expenses. If that person is unwilling to go to court (and has no documentation for the sale of the car), then it's a loss to both parties.

Title needs to be recorded properly. The car in question has a lien on it (the bank or loan originator). The person(s) responsible for paying for that auto is the person legally named on the lien. Until the lien is satisfied, the bank "ownes" that car.

Person selling the car needs to know the exact amount owed. That person needs to pay the lien and clear the title. If the "friend" cannot qualify for his/her own loan, then they should not be getting that car under any circumstances. That person should sell the car to someone who can. And then transfer ownership again.

This is the "responsible" way to take car of this. The legal way. Anything else could end up being a problem.

[Seeker]

Also, most financing companies will not just freely transfer a car loan. The problem with car loans is that they are almost always upside down. As soon as you drive it off the lot, you owe more than it's worth.

The bank with the lien would have to re-do paperwork and they'd most likely charge fees for that paperwork. How would they determine true worth? And the terms for used car (ie interest rates, vales, etc) would have to be updated as well.

Here are two Internet companies where you can get a private loan for an auto....

http://www.up2drive.com/

And for those with less than a 680 FICO...

https://www.autocreditfinders.com/

[noppenbd]

Also check out your local credit union. Mine is offering rates of around 5-6% for used auto purchase. If you don't have one, join Penfed. You might have to pay $20 to join NMFA first, but their rates are top notch (currently 3.99%).