Difficulty: Moderately Easy
Things You’ll Need:
- Limited Power of Attorney form
- Assignment Agreement
- Credit Information Sheet
- Insurance documents
Step1
Check local publications for eager sellers. Car owners who are in dire straits or have negative equity on their car loans often post ads in auto trader magazines and local newspapers. You may even know someone in this situation who's looking to sell their vehicle fast. Be sure to consult the National Automobile Dealers Association (NADA) book concerning your prospective vehicle. If the payoff figure on a vehicle is greater than the retail value listed in this book, then you may
have located an eager seller.
Step2
Contact the owners of each vehicle that interests you. The goal of this conversation is to discover if the owner is upside down or in a negative
equity position concerning their vehicle. In most cases the owner just wants to get what they owe on the vehicle so they can be relieved of their financial pressure.
Step3
Meet the owner face-to-face. Be professional and treat it like a job interview. During this meeting you want to be upfront with the owner about past credit problems that pose a hindrance to your ability to get financing. At the same time, you want to present a Suggested Assignment Agreement to the owner and assure them of your financial ability to take over their payments. Provide details concerning length of current employment, proof of income, length of time spent at current
residence, etc.
Step4
Seal the deal. Get the owner to commit to your offer to take over the payments. If they seem hesitant, then empathize with their fears and ask when the next payment is due. They'll become more flexible as the due date approaches and you can offer to make the payment for them or make two payments in advance.
Step5
Complete the appropriate paperwork including Limited Power of Attorney, Assignment Agreement, Credit Information Sheet, and Insurance
documents.
Enthusiast 
Comments
exportguy said
on 1/8/2008 Imagine if YOU were the person that agreed to let a person with sub-par credit take over your payments, and be responsible for YOUR CREDIT. If this person misses just ONE single credit, it could ruin years of due diligence on your part, just for doing things the wrong way. This is among the worst advice I have ever seen. Think about it - you are giving someone who has proven they cannot maintain a good credit profile (no matter the sorry excuse) and allow them to ruin yours. With no risk on their part, they can not only take your car, but destroy it. Nevertheless, it's required in MOST states that the original buyer insure the vehicle, so even with a power of attorney as stated, would still require the original owner to have insurance. This would be a double whammy should they not only ruin your credit, but kill someone, only to have them take all you have. For what?
dazcon5 said
on 1/2/2008 Most financial institutions expressly forbid owners from doing this. Some banks will let someone assume the loan but they will need to go through a credit check in order to assume the loan.
presnick said
on 12/5/2007 This is fascinating, and I hope to make use of it in the near future. At least it gives me an alternative to consider.