Can a Person's Name Be on the Title of a Vehicle If Their Name Is Not on the Loan?

As exciting as it is to buy a new car, it can also be stressful. In addition to getting a good deal, you have to worry about paying for the vehicle. For about 107 million Americans, that means taking out a car loan. But once the loan is in place, the lender holds onto the title until the loan is paid in full, at which point the title reverts to the buyer. Although the lender holds the title until the loan is paid, the title itself generally names the driver of that vehicle as its owner. In some cases, though, the person initiating the loan may want someone else to be named on the title, at which point things get a little complicated.

Can a Person's Name Be on the Title of a Vehicle If Their Name Is Not on the Loan?
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Why Another Name?

There are multiple instances where the loan signer might want to put a separate person's name on a title. One primary case involves the many parents who purchase cars for their underage children each year. The child will be driving the car, but lacks the resources and credit history to take out a loan.

Another common scenario is the person who wants to add another name for backup purposes. If a member of a married couple dies, for instance, the surviving spouse will be able to sell the car. Experts recommend titling a vehicle using "or" instead of "and" to prevent an issue with transferring the title in the event of a death or divorce. If "or" is written between the co-owners' names, both parties do not need to be present to sell the vehicle.

Adding Another Name

At the time of the sale, the buyer has the right to add another name to the title. However, that person will need to be present to sign. This may delay the purchase process as you wait for the co-owner to meet with you and the seller. If you're co-signing on a loan for someone else, you should understand the commitment you're making: You'll be responsible if the person doesn't pay. Having your name on the title may help protect you, so it's important to insist on that.

Once the title is submitted, you won't be able to add another name until after the loan is paid in full. For this reason, it's important you make sure you know exactly whose name you want on the title before you finalize the purchase.

Buying a car can be a fun, stress-free experience, as long as you plan in advance. Make sure you know whose name you want on the title before you start shopping, and you'll avoid slowdowns that will delay your drive off the lot.

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