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My stepmother asked me to co-sign on a brand new car. I did it because I felt obligated.

When we got to the dealership they said her credit was so messed up to get the car I had to be the primary and she could not even be on the car.

I really didn't want to do it because I worked very hard to get my credit score where it was, but the car salesperson made it sound as though it could never hurt my credit only help it. So reluctantly I did it with the understanding that in 12mths she would switch the car and financing into her name and she would be working to fix her credit in the meantime.

One year came and went, two years came and went, now we are approaching three years. She has ruined my credit with late and missed payments and I have repeatedly kept asking her to get the car out of my name.

On top of that I find out her son that is on parole is driving the car, while I have been stuck for 8 mths with no car.

Enough is enough. How can I get the car out my name with or without her help, and can I call the dealership and tell them where the car is and have them get the car. Or can I legally call the car in as stolen?

(Some extra information: The car and registration is solely in my name, however she pays the car note -- late every month, but she pays it nonetheless. The only thing in her name is the insurance she put on the vehicle.

I called her today and gave her until Friday to either drop the car off to me or I am calling the car in stolen, and I reiterated that I mean this Friday not next.)

Is this the way I should go about it? How can I fix my credit or get this car out my name? Can she fight me on this? I'm in California just F.Y.I. please help

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  • Hi, and welcome to money.SE! Unfortunately, your problem is fairly common. I linked an answer to a similar Q. I hope that helps; if you still have questions, please edit your question to indicate what is different from the linked question. Otherwise your question will probably be closed as a duplicate.
    – sleske
    Nov 29, 2023 at 12:24
  • Side issue: you'd be creating a situation where your step-brother could be caught driving a stolen car while on parole...
    – DJohnM
    Nov 29, 2023 at 20:28
  • Not a duplicate because the OP owns the car. Nov 29, 2023 at 20:31

2 Answers 2

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So, what happened is that you bought a car on credit and also made an arrangement with your stepmom that she would cover the loan payments and get to use the car, and that after a year, she would buy the car from you for remaining payback value of the loan. The first two things actually happened, but the planned onwards sale did not.

Courts tend to be quite reluctant to consider agreements between close relatives as contracts, because they presume that there is a lack of intention to form a legally binding contract. Unless you have your agreement with your stepmum in writing, it is unlikely that it would be deemed a contract.

Cars are owned by whoever the title says owns them, so its your car. Given that you most likely don't have a contract with your stepmom about her right to use it, and that even if you did, she's failed to live up to her obligations, your demand that she returns your car to you is certainly within your rights.

It wouldn't surprise me if the police would reject reporting the car as stolen if she does not return it. The police is often hesitant to get involved in what they'd see as a family dispute. Moreover, since your stepmom obtained posession of the car with your permission, it is a somewhat subtle situation. If the police doesn't want to act. you can go to court and ask for a judgement that your car is to be returned to you.

The dealership, however, doesn't want the car back. They want the rest of their money. They might have the right to take the car back if you don't pay, but that means you're defaulting on your debt (thereby ruining your credit score even more). Also, if the car wouldn't sell for the outstanding amount, you're still on the hook for that anyway. So once you have your car back, your best options are going to be to use it yourself (and pay the loan back) or to sell it (and pay the loan back).

Also, note that if you had co-signed the loan agreement rather than bought the car, you'd be in as much of a pickle regarding the credit score as you are now, but it would be your stepmoms car so you couldn't even take it back.

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    "Moreover, since your stepmom obtained posession of the car with your permission, it is a somewhat subtle situation." This. Whether this is legally theft would depend on jurisdiction. In Germany for example it would not be theft, but in some US states it could be. So this is probably not an easy solution.
    – sleske
    Nov 29, 2023 at 12:29
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The car and registration is solely in my name

This may be your magic bullet. You own the car and have every right to demand it back. If she will not give it back willingly, call the police and see what they can do. They will probably give her a chance to return the car voluntarily with no consequences, which might be enough incentive.

From there, what I would do depends on whether you want the car or not. If you want the car, keep paying the loan on time to repair your credit.

If you don't want the car, pay down as much as you can now, or keep making payments until you owe what the car is worth, then sell or trade it in.

You're very lucky that the title is in your name. Typically both cosigners get put on the title as well, and she would have just as much right to use the car as you do (i.e. she could not be forced to give it back).

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