Difficulty: Moderately Easy
Step1
Schedule a meeting with the bank or credit union that issued the original loan. The loan issuer might be able to re-write the loan so it's in your name and the title is sent directly to you when the vehicle's paid off. The terms and conditions of the loan might change depending on your credit, which may or may not be in your favor. Don't sign any paperwork until you've completed Steps 2 and 3.
Step2
Take the vehicle to a mechanic before you commit to taking over the payments. You need to know the condition of the engine, brakes and transmission. If the car needs major repairs, negotiate with the owner to pay for them before you take over the loan.
Step3
Calculate the total cost you'll pay for the car, after taking into consideration the potential costs of repairs and interest on the loan. If it's more than the car is worth, look for another seller.
Step4
Write a contract between you and the seller if you can't re-write the loan. Be clear about what is expected from both parties. For example, determine if you send the payments to the bank or to the seller. Make sure you have in writing that the seller is surrendering all rights to the car unless you default on the payments. Have the contract notarized and make several copies for all parties involved, including the bank.
Comments
enzley said
on 7/11/2008 While it's an option for most individuals in a dire circumstance to find someone to take over their loan, doing so may not be worth the risk. Since the loan remains in the original seller's name, anything that happens to the vehicle while it's in the possession of the "buyer" can mean serious legal consequences. In fact, the seller's loan company will not likely approve such a transaction causing the loan to be in default of the terms of the contract. Your best option is to sell the vehicle and hope you're able to cover the loan. As a side note, having the document notarized does nothing to legitmize the agreement. The notary is only acknowleding the signatures of the individuals who sign the document. The notary's seal has no bearing in court affirming the understanding between the parties. Hope it helps.