Help with car loan and cosigner

March 20, 2010 10:32 AM

My girlfriend drives a 2004 Ford Focus that is insured by her mother, but my gf pays her for it. The title and registration are also in her mothers name, but the loan is in my girlfriend's name with her mom as a cosigner. My girlfriend has made 100% of the loan payments (as well as minor repairs). Recently my girlfriends mom has begun to demand that she turn over the vehicle because it is "hers", but has now decided to try to cancel her insurance but cannot do so due to not having the plates to the car. My girlfriend is now living in fear and worrying that her mother is going to come over to our house and take the plates off the car. Her mother has also threatened to report the car as STOLEN.

First of all, WHO OWNS THIS CAR?! The loan holder or the name on the title/registration? Can her mother simply demand that she turn over the car because the title and registration are in her name?

Second, is there anyway my GF can remove her mother from the loan? There is only one year left on the loan.

Any suggestions / tips / advice would be greatly appreciated.

posted by ascetic to law & government (14 answers total)

I would think the bank owns the car right now, yes?
posted by spikeleemajortomdickandharryconnickjrmints at 10:39 AM on March 20, 2010

Is this in NY?
posted by spikeleemajortomdickandharryconnickjrmints at 10:40 AM on March 20, 2010

I hope your GF has proof SHE has been making ALL the payments, like cancelled checks to the bank with the loan number on them. She may want to call the bank, or log on-line, and print the history of the loan and payments made and keep this, as well.
posted by 6:1 at 10:42 AM on March 20, 2010

spikelee, the car secures a loan but the bank does not own it.

The mother holds title, unfortunately. I think if the mother demands it be turned over your gf is going to have to go to court to get her money back (and she will need good written proof of her payments). Without title, your gf will be unable to refinance the car loan. I don't see any good options here, since the mother is selfishly forcing a confrontation. Unless there's some written agreement that it's really your gf's car (say, when the loan is paid off), in the view of the authorities, your gf is borrowing her mom's car until such time as the mom cancels permission, at which time the police could arrest her for, potentially, grand theft auto.

Lawyer up. This won't be easy to sort out, and it may not get sorted out in anything like a timely, one way or another leaving your gf carless. It's time to find a way out of this.
posted by dhartung at 10:49 AM on March 20, 2010 [1 favorite]

If your girlfriend is an authorized driver on the insurance and listed as secondary on the loan (if the mother is co-signer then she's considered to be primary), then she can't be accused of stealing the car because she's authorized to drive it.

I doubt that she could remove the mother from the loan without refinancing...which would probably require the mother's permission (because her credit was used to obtain the loan).

If loan payments are still being made, then the bank holds the title, not the mother. As for the registration, I imagine it should have both names on it.

The simplest answer here, it seems, would be for the girlfriend to insure the car in her own name and let her mother cancel the policy that she's paying for. Legally, they both would still have equal claim to the car, but the mother wouldn't be permitted to drive it if she wasn't on the insurance. And even if she stole the plates at that point, she couldn't cancel the insurance.

Is this all about the insurance or some other issue? Give her what she wants, let her cancel the insurance that she pays for, and your girlfriend should pay for the insurance herself.
posted by nayrb5 at 10:49 AM on March 20, 2010 [3 favorites]

IANAL, but it seems like the mother can make a very strong legal argument that the car is hers because her name is on the title, and the fact that your GF paid for it is not going to change that.

I think you need to get the mother to sign the title over to the daughter. If you can't do that then she's probably screwed and can't even stop further payments because it could ruin her credit.

I'd try to get the mother to sign the title over by being nice, appealing to her better nature, and not threatening her or making the situation worse than it is.

But if the nice approach is not going to work then you're going to have to play hard ball just like she is. That might mean taking the mother to small claims court for the payments the daughter has made. To win though, you're probably going to need to be able to strongly document any payments she made, and maybe more importantly, any agreement she had with her mother. And, winning in court is one thing, and getting the losing side to actually pay up is another.
posted by 14580 at 11:13 AM on March 20, 2010 [2 favorites]

Collect all the documentation for the past payments and repairs. Ask small claims court for a lean on the title for the value of past payments, although repairs seems unrealistic. If she gets a lien on the title, then she'll have some bargaining power with her mother.
posted by jeffburdges at 12:06 PM on March 20, 2010

I don't know if this is doable or not, but I can remember test-driving a car at an auto dealership and before we could take it on the road, the salesguy had to afix license plates to the car magnetically.

Maybe your girlfriend could put really strong magnets on her plates so she could take them in the house with her whenever she gets home. At least that way you wouldn't have to worry about the mom ripping off the plates in the night while you figure out a more permanent solution.
posted by Serene Empress Dork at 12:14 PM on March 20, 2010 [1 favorite]

Even if you could do it, you don't want her mother's name removed from the loan. That doesn't benefit you at all. You want her mother to be forced to make the payments if your girlfriend stops making them, which she may need to do when her mom reclaims the car and your gf goes and buys another one, in her own name this time.

The person listed on the title is the car's owner. Unfortunately, you're in a really bad situation of your gf having agreed to make the payments on a car that someone else owns--effectively paying for her mother's car.

You need one of two things to happen: (1) The mother agrees to sign the title over to your GF, or (2) The mother agrees to refinance the car in her own name, freeing your GF to go get another car without responsibility for this one bogging her down. Being financially responsible for a car that someone else owns is bad mojo all around.
posted by Pater Aletheias at 12:19 PM on March 20, 2010 [2 favorites]

This seems like the symptom of a problem, and not the real problem. If your GF's mom is acting out in this way, then she is clearly unhappy about something else. Consider clearing the air and addressing the root cause of this behavior- otherwise, she'll just come up with another way to make you guys miserable.
posted by jenkinsEar at 12:23 PM on March 20, 2010 [3 favorites]

Yes, I agree that this is a symptom... her mother sounds way too much like mine for me to avoid immediately connecting this behavior to what I suspect may be a long-term pattern of manipulation — is that indeed the case? If this is not the first time her mother has pulled this sort of stunt, please stop trusting her with things that are important to you, because she will only continue. Some parents pull this sort of thing as the ultimate "I have control over you" move, because, for whatever reason, they're too immature to have ever recognized that their children are, in fact, individuals. Seeing their child as a grown adult, and realizing they could well lose their power (and will if the child knows what's good for them, because it's only healthy after all), can set off some of the worst cases of this.

Have you straight-out asked her mother why she's doing this? Have you calmly and as non-confrontingly as possible informed her of the negative impacts this will have on her daughter's life? I know, I know, it's obvious... but sometimes a calm, sternly implied "we see what you're up to" talk can do the trick. Especially if there's not a long history of her doing this.

(My parents, mainly my mother although my father went along with it all, pulled the "oh look how generous we are! This is yours! [A while goes by] NOT!!!" with practically everything: "my" clothes, which, once my mother and I wore the same size, became hers, to "my" piano, to "my" car, to "my" university savings account... which helped pay for a BMW for my mother rather than my university studies... you get the picture.)
posted by fraula at 1:21 PM on March 20, 2010 [3 favorites]

If the mother is as horrible as she sounds, you have 2 options:

1) Get a lawyer and try to get ownership of the car.

2) Forget it. Hand over the car, accept the loss, and realize that entering into contracts with family/friends is a bad idea.

If the mother can be reasoned with, that would be the cheap and easy way to handle it. But it needs to be done directly and completely, without loose ends (like mom keeping the title).
posted by coolguymichael at 5:18 PM on March 20, 2010 [2 favorites]

Mom sounds like a manipulative bully. Stand up to her. Tell her you're prepared to go to court to establish ownership, and be prepared to follow through.

With manipulative people, you have to stay out of entanglements, and you have to give them whatever you want to give, without games. Give Mom love, affection and attention, separate from the car issues. With any money or business, be matter-of-fact, brief, factual, and avoid emotion. This helped me have a relationship with my Mom; maybe not the relationship I wanted, but a healthier one than it was before I stopped participating in manipulative games.
posted by theora55 at 10:46 AM on March 21, 2010

I am a lawyer, but in this case I'm not going to speak as one, because legal advice doesn't seem to be the most helpful. Your girlfriend has just learned a very important lesson: She cannot trust her mother with anything important. This lesson will cost her whatever she has paid into the car ($15K?). The best, most drama-free, painless solution I can think of is this:

Drop off the car at the mom's house. Let her know she is expected to make the payments going forward, as the loan is in her name. Go out and buy a used car, using the funds with which you've been making the payments on the old car. Don't give mother another chance to hold power. Move on.

The mom wants drama, to show she's the boss, and to exercise control. So, let her have her way in the least satisfying way possible, and show her that even her worst behavior won't phase you. Take control so she can't have it anymore. The alternative, fighting this out in court or otherwise, will be a painful, drawn-out process with shaky outcome. Cut your losses.
posted by kingjoeshmoe at 11:53 AM on March 22, 2010 [1 favorite]