Title of new car

[GusGus77]

Due to unfortunate circumstances, we will be getting a new car. The vehicle I currently drive is titled to me (the main family vehicle) and my husband is currently carless. When we get the new car, it will become the main family vehicle (and therefore the one I drive) and DH will get the current one. I have researched and found that we should definitely NOT have both of us on the title. DH thinks he should just be on the title (since my name is on the other vehicle.) He is also the one whose name is on the loan since he has an income and I have been homeschooling our children the past ten years.

So does it make a difference that “my” new car (since I will be the one primarily driving it) has the title in DH’s name and then “his” car has the title in my name? So in theory, DH owns the car I will be driving 99% of the time?

I am in Illinois if that matters (and no, no chance of divorce, so the legality of who owns the car in such a situation is not an issue.)

 

[barkley]

if you don't mind sharing-why wouldn't you put both of you on the title, it's not like it saves on insurance? aside from that-if you aren't going to be co-listed as owners on the title i would suggest you look into what the laws are in your state regarding dealing with a vehicle if you are not listed on the title and the owner passes leaving it to you. i say this after dealing with this situation in another state than i live-it was time consuming and somewhat costly to deal with an issue that could have been addressed by at least putting the beneficiary on the car's title as the designated 'transfer on death beneficiary' (what it was called in that state).

 

[Kathryn Merteuil]

You mentioned something about "the loan"...

The bank may actually require his name to be on the title if his name is the one on the loan and yours is not. Every institution has its own rules on this, but having a name on a title of a financed vehicle that is not on the loan is a BIG risk for the bank (if not done properly). I literally deal with this every day.

In theory if your husband takes out a loan and your name is on the title and not his...... If he does not make his payments, the bank cannot repossess YOUR car.

Also, in theory if your husband takes out a loan and your name is not on the title and not his... You can sell YOUR car and do whatever you please with the cash.

This is why the bank may balk at even making the loan if they know this is the plan. Most likely if they do make the loan, they will want you to be on the loan with him. If 2 names are on the loan and only one of them is on the title... the bank is covered so they should not care one bit about that. There are documents in place that will allow a person to be on the title and not the loan (along with a borrower being on the title). There is this thing called a "security agreement" they will make you sign to acknowledge that your name is on a title for a car financed by somebody else and if that person fails to meet their obligations the bank CAN take your car and a repo will most likely reflect on your credit.

The bank will most likely absolutely hate the idea of him taking out the loan for a car and his name not being on the title only yours. Usually the only way this happens with us is if somebody "just does it" and doesn't tell us ahead of time. In which case, the bank will make probably make you sign a security agreement and frown upon it heavily. If the bank is not nice, they could either make you go back and re-title the car with his name on the title. In Illinois that will cost you another $50. (IL titles are not cheap). If the bank wants to be really mean, they may just call the loan (although I have never seen it actually happen). The bank may also make him refinance the car with your name on the loan, or they may convert it to a non-collateralized loan and hike the interest rate.

Long story short... don't try to be sneaky and have him take out the loan and then title the car the way you want. The bank WILL find out and they will NOT be happy, and it will most likely cost him a lot of money. Be up front with your loan officer if you go directly through the bank. If you are working with the dealership's finance department let them know your plans ahead of time so they can present the bank with the proper information or the bank will be very unhappy with both of you.... and it will cost him money.

There is also the insurance aspect.... the insurance company may have their own requirements when it comes to financed vehicles and titles as far as how the names appear on the title.

Moral of the story.... just put both of your names on the title. (assuming the bank will allow you to sign a security agreement and be on the title with him) or put both of your names on the loan. We see it all the time where one spouse has 0 income and is on the loan with the other spouse.

If you were not financing the vehicle... you guys would be welcome to do whatever you want, but when the bank's money is involved they will have a lot of say in what you do.

 

[Kathryn Merteuil]

if you don't mind sharing-why wouldn't you put both of you on the title, it's not like it saves on insurance? aside from that-if you aren't going to be co-listed as owners on the title i would suggest you look into what the laws are in your state regarding dealing with a vehicle if you are not listed on the title and the owner passes leaving it to you. i say this after dealing with this situation in another state than i live-it was time consuming and somewhat costly to deal with an issue that could have been addressed by at least putting the beneficiary on the car's title as the designated 'transfer on death beneficiary' (what it was called in that state).

In Illinois you're on the title our you're not. Also with Illinois, all titles imply "AND" ownership. There are some states that have "OR". Illinois makes it that simple.

I know Missouri has a TOD thing going. In Missouri if you are a TOD and the owner passes, the TOD will assume the debt for the car... so the bank will generally let you put anybody as TOD because they (the bank) will be covered.

 

[Sinder]

I assume that whatever name is on the loan has to be on the title as per the bank.

With cars you outright own it really doesn’t matter except whoever the car is registered too has to be on the title. I’m not even sure it’s possible here to have 2 names on a title here in NY. I never looked, I’m on my car and my kids cars because I’m the one that did all the registration paperwork, dh is on his 2 vehicles

 

[kymom99]

When my husband bought a car he financed it himself. They said my name couldn’t be on it if it wasn’t on the loan.

It really makes no difference whose name is on the title versus who drives it as long as you all are insured together. In our house we have 4 cars and 3 are in my name. Obviously I can’t drive 3 cars. My son got pulled over in one of them. It made no difference.

Why would you not want both names on it if you could? It saves probate if one of you passes away. We had an issue with my dads truck when he passed. The car was in his and moms name but the truck was not. We had to take it through probate to sell it.

 

[_19disnA]

I would ask the dealer where you are buying the car what the state rules are on whose name goes on the title. Certainly they would know what your options are and any reasons for doing it one way vs. another. Laws may vary by state so what someone has done in another part of the country probably doesn't matter. Since you are married and live in the same household, also seems likely you may each drive this car.

 

[mrodgers]

My wife was never on any title or loan of any car we had.

 

[Praying Colonel]

In my state, I've had many clients who had to go through the probate process to get ownership of the vehicle transferred to them because their deceased spouse's name was the only name on the title. If they'd had both names with an "or" designation it would've passed to the survivor by operation of law, outside the probate process, upon the first spouse's death.

Laws will differ from state to state, and there may also be good reasons why both spouses' names shouldn't be on the title. YMMV.

 

[HopperFan]

Agree with above, the LOAN likely makes this decision for you. We went through this with DD car, loan was in her name even though we were making all the initial payments. In the end she didn't keep the car, I paid it off to keep for DH BUT because it was coming off her loan, they could add my name but not remove hers. I had to go to the DMV with proper paperwork for her name to be removed.

If it is an issue, once it's paid you could go to the DMV to add his name OR you could change your current car to his name so you are each driving the car you are titled.

 

[Stratman50th]

I have always had my both of us on the title with "Or". Both my former state of residence (MD) and current (FL) have lienholder titles so the bank is the first to get their money regardless. Having been the executor of my parent's estate I can tell you it that "or" makes a big difference.
I also like to have my copy of the title in my safe both before and after the vehicle is paid off.

 

[kcool]

I don’t have income, but we always both apply for the loan and are both on the title. I like the loan to also be in my name so that it builds my credit too.

 

[Luv Bunnies]

California is a community property state. We are both listed on the titles of all three of our cars. We don't usually take out car loans, but we would both be listed on those too. Maybe we're old school, but we've both been listed on everything since we've been married.

 

[AppleDumpling]

Check with your state DMV, or I’m sure the car dealer could help you. I never knew a car could be registered in two names before I read about it here. DH and I each have a vehicle titled and registered in our individual names, although we both drive both cars interchangeably.

 

[dez1978]

DH and I will never ever not have both of our names on everything. In the event that one of you is incapacitated in some way, either medically, or jail, or death, it is a huge PITA to force a bank to deal with you if your name is not on it. Yes, you can get a Power of Attorney, but do you know how much stuff can get screwed up in the amount of time that takes? We had to go thru that once and DH's identity was stolen and it was almost impossible for me to deal with bc my name was not on his credit cards or loans.

 

[DLgal]

DH and I will never ever not have both of our names on everything. In the event that one of you is incapacitated in some way, either medically, or jail, or death, it is a huge PITA to force a bank to deal with you if your name is not on it. Yes, you can get a Power of Attorney, but do you know how much stuff can get screwed up in the amount of time that takes? We had to go thru that once and DH's identity was stolen and it was almost impossible for me to deal with bc my name was not on his credit cards or loans.

Same. My husband is active duty military and everything is co owned as "or". I need the ability to "handle things" when he is away from home.

Car loans are always in my name with him as a co signer even though I don't work. I have the better credit score.

 

[tvguy]

Check with your state DMV, or I’m sure the car dealer could help you. I never knew a car could be registered in two names before I read about it here. DH and I each have a vehicle titled and registered in our individual names, although we both drive both cars interchangeably.

Until my father in law died I didn't know there were states that didn't allow two names on a title. He lived in Texas and my wife's stepmother had to jump through a lot of hoops when he died to take his name off the car title and registration and put her name on. My wife was her father's only blood relative, and Texas law says a blood relative can claim ownership of a car over a spouse. My wife had to sign a special form and have it notarzied so her step mother could change the title.

Everything we own, cars, house and all loans and bank accounts are jointly owned. That's basic estate planning in my book.

 

[cvjw]

All of our cars are titled in my name. We had one that was titled in my husband’s name - in order for the dealer to get to my drive out price, we had to finance a small portion of it. Since we financed in my husband‘s name, they required the title to be in his name. When you pay cash, you can title how you wish.

 

[mrodgers]

California is a community property state. We are both listed on the titles of all three of our cars. We don't usually take out car loans, but we would both be listed on those too. Maybe we're old school, but we've both been listed on everything since we've been married.

Could be just old wive's tale, but I've always understood you put cars in a single name and your house/property in both names so that in the case of an accident, you can't be sued and lose your home because your spouse is also on the deed.

 

[Skippy918]

Both of our names were on the loan and both are on the title for both vehicles.
With my previous vehicle, that was titled in my name only because I bought it before I got married.