Should you let someone else just take over car payments?

There is an interesting thought- letting someone take over car payments.In these days when times can be tough going and we get financially submerged from the high monthly outgoings such as rent, mortgage, food

Let someone else take over Car payments?

and medical bills, sometimes making monthly car payments is  low on the priority list. So,we figure, well let’s just skip this month’s car payment. How we wish someone else could take over car payments, just for this month. Sadly,it just doesn’t work that way. However, soon those payment arrears start to add up and it becomes a real difficulty to overcome.So you think , can someone else just take over car payments and just be done with it?

If you can get by with just one vehicle in the family, one possible solution to this problem might be to find someone to take over car payments on your behalf for your second car, while the loan is still in your name. But, is this a smart idea and a viable option to save your monthly outgoings? And, what happens if the chosen person reneges on the agreement and can’t make the car loan repayments? They should never have been allowed to take over car payments in the first place really.If this happened, you would end up having a repossession stigma on your credit status, so maybe allowing another person to take over car payments is not such a good idea. Often people looking to take over car payments have a history of bad credit and defaulting on previous loans- this is why they want to take over car payments of others as they would not be approved if they were to apply for new credit in order to buy a car. So, you should be doubly cautious of anyone keen to take over car payments- why?

Allowing someone else to take over car payments

At times, allowing someone else to take over car payments can work very well if that person is in the family or a close friend.But there can be trouble. The first obvious problem can be when a person does not have the title deed or legal right to the car, so what’s to keep them enjoying having the car but not making the monthly payments?Sad to say there are people out there who would happily take over car payments but have no intention of paying the debt. You think now you have less stress as someone else can take over car payments. However, you may find out after a couple of months that your car is being repossessed for lack of payment. The bank or financial institution won’t be interested in your woeful tale about your friend who said he would take over car payments when they weren’t even co-signed on the loan agreement. So, an arrangement to have the car loan co-signed with the person who will take over car payments would be a good option. There are some other options that might help in these economic crunch times.

Take over car payments alternatives

If you think that giving your vehicle to another to take over car payments could be dodgy, there are alternatives.

Talk to your financing bank:

If you can see that serving your monthly car payments is really going to be a problem, firstly, it would be best to get in touch with your bank or finance company to explain your financial situation. This is best done early, before those late notices start piling up. “Is there any way you can take over my car payments,?”  is the usual request to the loan company. It is a shame that banks don’t offer a debt holiday ‘take over car payments’ deal like they do for mortgages!  Next,you need to find out the true market value of your vehicle from the finance company at that time. This depends on the mileage and age of car. If you find that the realistic market value is more than what you owe the finance company, perhaps it is best to go ahead and sell your car outright so there is no need to find anyone to take over car payments for you. Obviously you won’t have the car but you will have got rid of those monthly payments so you can go ahead and search out a more affordable car- one which you wont have to take over car payments on!

However, if you find out that you owe the car financing more than what the car is worth, you  can still sell off the car and perhaps borrow the difference from family members to clear off the loan rather than one of them willing to take over car payments.

Look at current Interest Rates and Refinancing

Another way to get around finding someone to take over car payments is to approach your lender.Although most car lenders won’t reduce the interest rate on an existing loan, they may allow you to re-finance for a longer term which will lower your monthly repayments and therefore stop the requirement to find someone to take over car payments. Unfortunately this re-financing may result in a higher interest rate but here your goal is to reduce your monthly outgoings, so this may work for you in the short term and also stop the reality of losing your car. You can take over car payments yourself and this should help you keep easier control on your finances at this time.

Look at Loan Assumption for taking over car payments

Loan assumption is when you find someone with good credit rating to take on your loan . This doesn’t mean they take over car payments! It means the person assuming the load could take the vehicle from you if they are making the payments and it would then be in their name. This in particular should be kept as a last resort-taking over car payments from another person should be looked into very carefully.

So, overall, letting someone take over car payments on your existing loan is probably not a good proposition. You will have very little come-back or any commendable solution if the other person stops making monthly payments for any reason. Co-signing loans can also be dangerous if  you are not absolutely sure they will be responsible enough to front up with the cash every month to take over car payments. The finance company will be on your back as you being the original loan signatory, are just as responsible as the other guy on the loan contract who will take over car payments.

If none of the above suggestions helps take over car payments, you can always visit the car dealership where you originally bought the car and see if they could help you . One option is to sell it on consignment to help you pay off what is owed on the car and avoids the issue of having to find someone to take over car payments.

Take over car payments

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