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I have a car, both me and by grandpa are on the title. As I cannot get loan on my own, my grandpa is my cosigner. My grandpa is almost 90, and chances are he may not be around till the loan is paid off.

I have been paying on my car loan for almost 3 years now, never late and usually a little extra. The car was new and has low mileage, but I still have around $12,000 to be paid, and the car itself may have a resale value of around $6,000.

Refinance on my name is not working out as I don't make enough on my own and have a poor credit score from this loan and school loans.

My family members, particularly my aunt (his daughter), are telling me that when my grandpa dies they are taking my car. Because my grandpa is on the title as well as me, I think they can legally do this. She hasn't mentioned taking over the payments on the loan, which I think I would be obligated to continue as my name is on it

However, my grandpa is still alive and I get along well with him.

Is there anything I can do to keep the car? Notarized, put it in the Will?

GS - Apologise to Monica
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JWea417
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  • The dealership told me to get a different cosigner..... not an option, and why would I want to chance that again – JWea417 Nov 15 '16 at 21:47
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    @JWea417 What do your loan documents say about this situation? They should say something specific about what happens when a cosigner dies. – Joe Nov 15 '16 at 21:52
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    If your name is on the title, you have the right to use the car, full stop. Your grandfather does too. Whether or not your relative (assuming they are executor of the estate or sole heir) legally gets that right is a detailed question about the state law and specifics of the will. But assuming they do, what they can do legally is move the car to make it difficult for you to use it. If you then found the car, you could drive away. You have the right to drive it, they cannot claim you're stealing it. Upshot, be careful with copies of the keys. – user662852 Nov 15 '16 at 22:47
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    I'm not living in the US, so things may be different there. But from what I've seen on the Internet (yeah, like that's an unimpeachable source lol), a co-signer has only the obligation to repay the loan in case you default, but no actual right to own or use the vehicle. From what I understand a co-signer's name doesn't have to appear on the title, so it's strange that your grandfather's does here. But even if that's so, if you're the sole person making payments (and you've never defaulted), you can probably lawyer up and convince a judge of the merits of your case. – Deepak Nov 16 '16 at 02:45
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    Some loans have a clause which states something along the lines of If either borrower (main or co-signer) dies then the remaining loan principal (no further interest added) must be paid in full immediately. – MonkeyZeus Nov 16 '16 at 16:21
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    First, I am a she not a he. My grandfather and I have a good relationship, so I will talk to him about options. – JWea417 Nov 17 '16 at 03:48
  • Comments are not for extended discussion; this conversation has been moved to chat. – GS - Apologise to Monica Nov 17 '16 at 14:15
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    What jurisdiction (state) issued the title to this vehicle? What is that jurisdiction's policy about vehicles with two names on the title upon the demise of one of the two persons? If your generous grandfather should happen to die while his name is still on the title, keep a copy of the newspaper with his obituary, or get a copy of his death certificate. Your motor vehicle registry may want to see one of those. – O. Jones Nov 18 '16 at 13:47
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    I'm confused as you why you'd think that having a loan (that you state you've been paying, always on-time and often extra, for 3 years) would contribute to bad credit. That's exactly how you get good credit. This makes we wonder if you're just assuming you have bad credit based on a false understanding of credit. – Jimbo Jonny Nov 18 '16 at 16:32
  • @O.Jones Illinois is the state here. See my answer for information about what Illinois does here. – Joe Nov 18 '16 at 20:04
  • The only person who can take any such action is the executor, who is obliged to call in all loans and realize all property not explicitly bequeathed, and you can forestall that by having grandpa put something into his will about it. – user207421 Nov 18 '16 at 21:05
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    having a co-signer on your loan and having joint ownership of the car are completely separate issues. upon one joint owners death, most states give the property (car, house, bank account) fully to the other and probate court cannot affect that, as immediately upon death the deceased loses all rights to the property (therefore their estate too). Unrelated to this is the loan, which has its own terms which may say the estate is now liable or may revert to just you (and if you stop paying, they will reclaim the car). if estate is liable, then bank can go after them as well as you if non-payment. – simpleuser Nov 19 '16 at 06:50
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    I'm amazed that a car that apparently cost $12,000 + "(...) almost 3 years now (...) and usually a little extra" worth of payments, is now worth only $6000. Can you shed some light on what happened there? What was the original price, what model was the car, and why is it now only worth $6000? We're all a bit puzzled here. – SQB Nov 19 '16 at 12:47
  • @Doopak It's a bit more complicated in this case, since both parties are on the loan and the car title. – jpaugh Nov 19 '16 at 19:19
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    @SQB yes I was going to ask OP how they can end up upside-down on a loan with $12K remaining and only worth $6K after 3 years. (Was it crashed or damaged? secondhand? Was the loan >20% APR?) – smci Nov 20 '16 at 06:01
  • The same questions and comments are getting re-asked and re-commented, respectively, as previous comments that got moved to chat. – stannius Nov 20 '16 at 16:40
  • Taking the car from you would be a poor decision on their part. It's worth 6k and you owe 12k. That means they'd be taking six thousand dollars in debt from you. Far better for them to leave that burden of debt in your hands. – jorfus Nov 20 '16 at 20:50
  • @jorfus my guess and possibly the OP's fear is that they'll somehow manage to take the car but leave the debt. – SQB Nov 21 '16 at 17:47
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    @stannius perhaps we should leave one request for more information, vote that to the top, and remove the others. – SQB Nov 21 '16 at 17:49
  • @SQB sure, but I'm not sure it matters since the OP has been responsive but hasn't answered those questions. There are other repeating comments including "they'd be doing you a favor" (even though that's not true). – stannius Nov 21 '16 at 18:06
  • @stannius true, but if there's a "canonical" request for more information, we can leave that one in place and remove all others (including mine). – SQB Nov 21 '16 at 18:56
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    There has been so many responses, most of which are not actually asking for any info, that I haven't written back. Both names on loan and title, no I cannot put it just in my name. No I do not have the title, the bank has it till paid. My question was and is still, is there paperwork such as a notarized letter, the will, etc that he can write to make it so that the family (aunt) cannot take the car when he dies. Or if they do, how can I get out of paying for something they are just going to hide from me so I cant use it. – JWea417 Nov 21 '16 at 19:05
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    16k for the car, 2-3ish years of payments around 300$ a month @ 4.9% leaves me with about 12k left. The cars kbb is now around 4-6k – JWea417 Nov 22 '16 at 18:52
  • @JWea417 Is it a 60 month loan? – stannius Nov 22 '16 at 19:30
  • Yes, I believe it is – JWea417 Nov 22 '16 at 19:34
  • @JWea417 So how come a car that cost 16k 2-3 years ago is now only worth 4-6k? That seems to be more than the usual depreciation. – SQB Mar 03 '17 at 20:57
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    @JWea417 It's been a few months, would you mind updating us on what you did, if anything, to resolve this situation? – Adam Davis Mar 01 '18 at 18:02
  • 16k for the car - 9k in payments + 2.5k in interest = $7500 left to pay, not $12,000. – Hannover Fist Mar 19 '24 at 18:41

9 Answers9

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It looks to me like this is a 'call an attorney' situation, which is always a good idea in situations like this (family legal disputes). But, some information.

First off, if your family is going to take the car, you certainly won't need to make payments on it any more at that point, in my opinion. If the will goes through probate (which is the only way they'd really be able to take it), the probate judge should either leave you with the car and the payments, or neither (presumably requiring the family to pay off the loan and settle your interest in the car). Since the car has negative net value, it seems unlikely that the probate judge would take the car away from you, but who knows. Either way, if they do take the car away from you, they'll be doing you a service: you have a $6,000 car that you owe $12,000 on. Let them, and walk away and buy another car for $6,000.

Second, I'm not sure they would be allowed to in any event. See the Illinois DMV page on correcting titles in the case of a deceased owner; Illinois I believe is a joint tenancy state, meaning that once one owner dies, the other just gets the car (and the loan, though the loan documents would cover that). Unless you had an explicit agreement with your grandfather, anyway.

From that page:

Joint Ownership

A title in the names of two or more persons is considered to be in joint tenancy. Upon the death of one of them, the surviving joint tenant(s) becomes the owner(s) of the vehicle by law.

Third, your grandfather can fix all of this fairly easily by mentioning the disposition of the car and loan in his will, if he's still mentally competent and wishes to do so. If he transfers his ownership of the car to you in the will, it seems like that would be that (though again, it's not clear that the ownership wouldn't just be yours anyway).

Finally, I am not a lawyer, and I am not your lawyer, so do not construe any of the text of this post as legal advice; contact a lawyer.

Joe
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If you've been paying on the car for three years, it's possible that your credit is in a place where you don't need a co-signer any more.

See if your bank will re-fi with you as the sole debtor. If they won't do it, find another institution who will. The re-fi will take your grandpa off the loan, and whichever institution that does the re-fi will still have a lien on the title until you pay it off. Then, if you can do this soon enough, figure out if grandpa can sign you off the title.

Xavier J
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    Excellent answer, this might solve the main problem and put's OP in a more independant/secure financial position! –  Nov 16 '16 at 03:20
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    I don't disagree with this, but unfortunately the op mentioned in his first comment than he tried to refi and couldn't due to credit problems. Refinancing a new car loan on a car well underwater is challenging, unfortunately. – Joe Nov 16 '16 at 04:01
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    It might still be worth going into the branch, if you can and asking nicely. The bank now "know you" and that can count at some places. They see you have paid the loan. Go in prepared though with statements showing you and not someone else did pay and your monthly budget. (Even if you have to go in once before to get your statements). In the end they want to ensure they get the money they loaned back. i.e. a return on their investment. – indofraiser Nov 16 '16 at 10:02
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    In respect of your credit score, you can do all you can to boost your reputation. If, as @codenoir says, your credit score is now better, good. It's worth getting one of those free credit reports on yourself, to find out what's dragging you down: 3 years good payments should amount to good behaviour, but if you have a) too many things on credit b) any/too many missed/late payments then this will be adverse for you. So a) don't take out ANY new credit b) decrease # of loans if you can, by paying off - ideally those on a high interest rate ! c) DO NOT miss / be late with any payments ! – MikeW Nov 16 '16 at 10:47
  • Also consider a credit union who are sometimes more forgiving about bad credit than banks. – corsiKa Nov 18 '16 at 00:18
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You're driving a car worth about $6000 which has a $12,000 loan against it. You're driving around in a nett debt of $6000.

The best thing your grandfather could do for you, if possible, is to take your name off both the title and the loan, refinancing the car in his name only. If possible while still letting you drive the car.

When he dies, you will be out of a car, but also out of a $12,000 debt which I'm sure you could do without.

Okay, the best thing your grandfather could do, from your wallet's point of view, is paying off the loan for you and then taking his name off the title.

SQB
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My grandmother passed away earlier this year. When I got my car 3 years ago, I did not have good enough credit to do it on my own or have her as a co-signer. We had arranged so that my grandmother was buying the car and I was co-signing. A similar situation was happening and I went to my bank and took out a re-finance loan prior to her passing. I explained to them that my grandmother was sick and on her death bed. They never once requested a power of attorney or required her signature. I am now the sole owner of the vehicle.

Daerik
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I think Joe is right, it seems that you will get the car once grandpa passes. It clearly states that on the DMV page.

I would work like crazy to get this car paid off ASAP. Work extra and see if you can get it paid off in less than a year. Once paid off, have grandpa sign it over to you.

This is a really toxic situation that you can reduce somewhat by having the car in your name only. Learn from this: have a will and keep it up to date. There is going to be a lot of fighting over the assets that grandpa leaves behind. You don't want that to be your legacy, and you don't want to tarnish your grandfathers memory by participating in such nonsense.

My concern is why you have such poor credit. Understand that poor credit is a choice of behavior and there is no one to blame but yourself. I would recommend to stop borrowing completely until this car is paid off and all of your obligations are paid back (that is if you have items that are in collections). No vacations, no eating out, etc... Work don't spend.

Pete B.
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  • I know this is old, but that last paragraph is harsh. Poor credit rating *can* be a result of behaviors like running up credit cards and not paying them off. OTOH, it can also be the result of being young (thus having little credit history), relatively low income (often also a result of being young and new in the work force), and lots of debt - which student loans and a car loan could easily create - for your income level. I've known some very responsible 20-somethings who still need co-signers on loans due to their lack of credit history and difficulty finding high paying jobs. – GreenMatt May 03 '21 at 19:08
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I was in a similar situation about a year ago, and the expedient thing to do would be to remove your grandfather from the Title. He would probably have to agree with this, but I think he will if you approach it correctly.

In my case, I was the cosigner for my son's car loan and was told by the dealer that I "had to be on the title". This is not true as far as Virginia is concerned (Illinois may be different). I know this because when my son dropped his auto insurance I got the fine for having an uninsured vehicle and was told during the hearing that the dealer was mistaken.

It all worked out in the end, but all we had to do was go down to the DMV and get my name taken off of the title.

I'm sure if you approach it this way - you do not want him to be responsible for things that you do (who would get sued if you caused an accident?) he would agree to have his name removed from the title.

Michael J.
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  • Since we do not have a physical title because a bank obviously owns it till it's paid off, how do we juat go to the DMV to have his name removed? – JWea417 Nov 17 '16 at 04:18
  • @JWea417 I took a look at the IL DMV page and having a lien on the title looks like it complicates things. There is a form to mail in to remove an owner from a title, but it requires that you send in the title. But in your case you don't have one, since in IL the lienholder keeps it until the lien is satisfied (i.e. the loan in paid off). If you have time, going to or calling the DMV to explain your situation and find your options might be worthwhile. – Sean Nov 17 '16 at 19:30
  • Yea, that call is next on the list of possible resolutions. I am seeing my grandpa tonight, hopefully him and I will have a minute to talk about options. – JWea417 Nov 17 '16 at 19:32
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    The cosignor may be required to be on the title based on the loan documents - look at those documents and verify. – Joe Nov 17 '16 at 23:51
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My family members, particularly my aunt (his daughter), are telling me that when my grandpa dies they are taking my car.

Bring this up with Grandpa. If this is what he wants to have happen, then help him make it happen before you finish paying $12,000 on a car worth only $6,000. Let the Aunt and other relatives deal with the remaining $12,000.

If that isn't what he wants to have happen, then work out how you and he can legally make sure that what he wants to have happen actually happens.

If the Aunt or others bring it up, make sure they understand that you still owe $12,000 on the car, and if they get the car they also get the loan. If they refuse to pay the loan then make sure they know you will cooperate with the bank when they attempt to repossess the car - up to and including providing them with keys and location. This will hurt your credit, and you will be on the hook for the remaining portion of the loan, but you at least won't have to deal with all of it - they'll sell it at auction and your loan amount will fall a little.

But the best course of action is to work with Grandpa, and make sure that he understands the family's threats, how that will affect you since you're on the loan, and what options you'd like to pursue.

Adam Davis
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  • Yes. Firstly it's Grandpa's name on the title that matters. Approach him with the prospect of adding a note on his legal will, giving you his interest in the car. This should prevent the executor from considering it just part of his general estate, to be divided among the family. Or, as others have said, have him give you his interest now, as a gift worth $3000. – CCTO Mar 01 '18 at 17:57
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The lead story here is you owe $12,000 on a car worth $6000!! That is an appalling situation and worth a lot to get out of it. ($6000, or a great deal more if the car is out of warranty and you are at risk of a major repair too.)

I'm sorry if it feels like the payments you've made so far are wasted; often the numbers do work out like this, and you did get use of the car for that time period.

Now comes an "adversary", who is threatening to snatch the car away from you. I have to imagine they are emotionally motivated.

How convenient :) Let them take it.

But it's important to fully understand their motivations here. Because financially speaking, the smart play is to manage the situation so they take the car. Preferably unbeknownst that the car is upside down. Whatever their motivation is, give them enough of a fight; keep them wrapped up in emotions while your eye is on the numbers. Let them win the battle; you win the war: make sure the legal details put you in the clear of it.

Ideally, do this with consent with the grandfather "in response to his direct family's wishes", but keep up the theater of being really mad about it. Don't tell anyone for 7 years, until the statute of limitations has passed and you can't be sued for it.

Eventually they'll figure out they took a $6000 loss taking the car from you, and want to talk with you about that. Stay with blind rage at how they took my car. If they try to explain what "upside down" is, feign ignorance and get even madder, say they're lying and they won, why don't they let it go? If they ask for money, say they're swindling. "You forced me, I didn't have a choice". (which happens to be a good defense. They wanted it so bad; they shoulda done their homework. Since they were coercive it's not your job to disclose, nor your job to even know.)

If they want you to take the car back, say "can't, you forced me to buy another and I have to make payments on that one now."

Harper - Reinstate Monica
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    But isn't OP still a co-signer? He'll still be on the hook for the debt. – JTP - Apologise to Monica Mar 04 '17 at 19:51
  • @JoeTaxpayer That's why I said "make sure the legal details put you in the clear of it".. OP is not a mere cosigner, she's the borrower and owner. Removing her from those capacities would be the very essence of their taking the car. Also, while I have a feeling OP is judgment-proof and has no credit to risk, that is only relevant if they default. Nothing indicates the grandfather means to, and I believe the estate can't unless it is truly bankrupt. – Harper - Reinstate Monica Mar 04 '17 at 22:19
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Possession is 9/10 of the law, and any agreement between you and your grandfather is covered under the uniform commercial code covering contracts. As long as your fulfilling your obligation of making payments, the contract stands as originally agreed upon between you and the lender. In short, the car is yours until you miss payments, sell it, or it gets totalled. The fact that your upside down on value to debt isn't that big of a deal as long as you have insurance that is covering what is owed.

Thomas Paine
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    The agreement between the grandchild and the grandfather isn't itself a contract, as there is no consideration. – user207421 Nov 18 '16 at 01:40
  • The contract is between the grandfather, the OP, and the lender. The OP should look through the loan docs for an in event of death clause, and in the mean time, make sure they (the OP) are the only one on the registration, since the lender is owner of the car and the OP doesn't have title. – Thomas Paine Apr 07 '17 at 15:09