mxt_77

True... I didn't think it through completely. I just figured that if anybody was co-signing on an auto loan that they would also want their name put on the title.

Sounds like a good plan. If she tries to hold it over your head, just try to remind her that she has just as much to lose as you do by not making payments, but she has more to gain (since paying off the loan will decrease her debt load (which also has the side effect of increasing her credit score), and making consistent payments will also increase her credit score).

midnightsunset

You have no legal rights to sue her. There is no clause in the loan cotract stating that if she doesn't pay, you are entitled to anything. In small claims you have to prove loss and the only thing you can use is that you had a verbal contract. Verbal contracts = $0.00 unless you go to a television talk show like Judge Joe Brown where the Judge will award you money on whether he likes you or not.

As mentioned before, co-signing only makes you responsible so collateral is only the security and has nothing to do with repayment. The only way to use a car is to have one (or two if registered to both) of the registered owners signing on the loan. The lender cannot repo the car if there are two names on the title and one signature on the loan contract.

BTW - There is no such thing as a Co-signer in a court of law. Both parties have 100% responsibility to pay back the loan (not 50/50). The ONLY time you can take action is in the event of a divorce and one party gets the security. However, while you have a very limited case it is still worthless to pursue it. as legal distribution of assets in not covered in a loan contract as an "Out".

s2kobsession

many right answers in this thread. Magician hit the nail on the head though. If she stops paying the bills, you are SOL. She needed a co-signer for the loan because she has/had bad credit so the bank requested for her to strengthen the relationship with a co-signer (your good credit). Make sense?

FYI, co-signers on a secured loan DO NOT need to have any sort of ownerhip in the asset that is being secured. I'm sure many of us have had parents co-sign for a first car loan etc and they were certainly not on title. One main benefit in this scenario would be the insurance savings available if your parents name (with good driving record) was owner/primary driver and you were co-driver.

/ramble. hah