Lending a car - liability question

[Hugh R]

NO!

I asked a lawyer friend about my 82 y/o MIL driving her car, but living at my house. He said a lawyer would probably face ethics charges if he didn't try and sue me just because she lived with us, in the event of an accident (not vigorously representing his client). Wasn't even registered to me nor owned by me.


I co-signed a loan to get a truck for my son, a few months later I paid off the loan, took my name off the truck and had him pay me the monthly payments. Anything with your name attached can result in you being drug into a court battle.

[dave 911]

Thanks for all the replies. You guys have all confirmed what my gut was telling me all along . . . .bad idea.

Even though we are good friends with the family, protecting my family and assets is priority #1.

[gordner]

You can lease it to her by contract and ensure that you are insulated from liability, we do that with airplanes and hangar equipment all the time. When people want to borrow a ladder from us it comes with a no cost lease agreement for just that reason.

[flipper35]

If that doesn't work out there is a guy in San Diego...

[Steve Carlton]

Originally Posted by gordner

You can lease it to her by contract and ensure that you are insulated from liability, we do that with airplanes and hangar equipment all the time. When people want to borrow a ladder from us it comes with a no cost lease agreement for just that reason.

Sure. Just title it "Pandora's Box Lease."

[Dueller]

CAVEAT: I AM A LAWYER BUT NOT LICENSED IN OHIO. THIS IS INFORMATIONAL ONLY AND NOT OFFERRED AS LEGAL ADVICE.

As you describe it, not advisable. If she gets in an accident and lets say she is carrying minimum coverage but the damages far exceed he policy limits. What could happen? Oh, let's see..;.;.hmmmmm.... you "negligently entrusted" her with an automobile when you were on notice of her previous accidents. Plaintiff lawyer takes her full insurance coverage and sues you for the excess damages.

Wanna help her out? Sell it to her for $10 down. Finance balance with a one time payment due June 1, 2015. If not paid, you "repossess" car. But, she's a minor....can't legally enter into contract. So you sell it to her parents with the same deal.

As you are trying to do it I fear you will end up in a mess.

YMMV

[tedg04]

Originally Posted by TimT

Millions of people insure vehicles they don't own...

If you lease a vehicle you are still required to provide insurance,

Ditto if you take a loan on a vehicle...

In both cases some entity other than you owns the vehicle..Yet you the operator have to provide, at a minimum, liability insurance. The owner of the vehicle (leasing agency/bank) could require that you hold collision coverage for the duration of the agreement..

The state still requires that the vehicle is insured...

As otherwise mentioned - vehicles that have liens or are leased are almost always (I only say almost because I think there may be a state or two that don't require it) registered as legally owned by a bank and registered owner is the person or persons making the payments.

As to the idea of leasing or loaning it to the girl - she is under 18 (previously mentioned by another poster) and can't enter a contract. Parents may not be keen to take the agreement themselves either.

Secondly - the bank that holds the loan on your car can't just come drive it whenever they want. Even if you title it with girl (or parents) name as registered owner and yours as legal owner, you can't drive the car at will. It would have to repossessed, and I would be surprised if the legal owner can then use it at will even then. More likely you would have to sell it off and report the sale against the amount the registered owner 'owed' you (in some cases, repo vehicles get more than the delinquent amount at auction and the bank has to pay the registered owner the difference - though rarely). If you don't follow these steps, a court could find that you price-fixed the asset and took part in illegal/predatory lending.

It's a nightmare - stay away. Far away.

[rwest]

Buy her a bicycle and a bus pass.

[gacook]

Depending on the position you're in, I'd say just give her the car.