Can my dad remove himself from my car loan?

Question

I bought a new car from a dealership, and my dad agreed in front of my husband and my mother to co-sign for me. The dealership allowed me to take the paperwork out to my dad's house and have him sign it. The dealership even talked to my dad at some point, and he was on board the whole time. The tags came in and he was a little upset that he was listed as the primary but decided to give me a chance. I have made every car payment on time and kept the insurance up by myself.

Everything was fine until I took a trip to Louisiana, and somehow my dad got 600 dollars worth of parking tickets!!!! Now I would be pissed, too. I never received a ticket on my car, so I was totally unaware of the issue. My dad has since tried to back out of the loan altogether he has put a remark on my credit saying that he disputes the car being put in his name and says he never signed it.

I can't get my car refinanced or anyone to even entertain the idea of leasing or selling me another car with that derogatory remark and what he is trying to do.

So my question is: Can he do that? What do I do? And can I trade the car in or sell it for less than is owed without him being there?

Answer 1

Dealerships lie. They told you that dad would be a cosigner, but the likely only way the lease could be approved is by him being the primary. They likely did a clever job of concealing that fact, and if your dad signed the paper work, both you and he are co-owners. Any derogatory mark on your credit would equally be on his credit. You two share an equal fate in the outcome of this transaction, so it is best if you two can work together.

When we are adults and make mistakes it costs us money, that is how we are "punished". This transaction contains a number of mistakes, by the both of you, so I would be prepared to pay to make them go away.

Parking Tickets You should probably pay for these. You may not have noticed the illegal parking signs or they may be cleverly hidden to trick unsuspecting tourists. It is far easier to give you a ticket via license plate then actually put one on your windshield. Plus, you will likely be a repeat offender if you don't have a physical ticket. You can fight them, but perhaps the best you can hope for is a reduction in fine.

Dad off the Lease This will require a separate car transaction. Since it is a lease you will have to obtain the pay off amount and either get a loan on your own for that amount, or a new lease. How likely are you to qualify for a loan/lease on your own? How much did you put down on the original lease?

Unless you put a large amount down, you will likely be unable to obtain a loan or lease for the pay off value of the car. This means you will have to come up with cash to make this transaction happen.

Co-signing is something you should never do for someone, nor should you ask someone who you care about to do for you. This is especially true for such as a diminishing asset, like a car. These kinds of transactions lead to all kinds of "tales of woe".

Leasing a Car Leasing a car is the most expensive way to drive a car. One is probably better off renting a car from Hertz or the like on a continuing basis. The ramifications of this transaction can echo into your financial future for many years. Some people never get out of the car payment cycle. It is best never to begin, but you already started.

The best thing you can do is pay cash for cars and save for your next one. Some people, who have actual cash, choose to invest the money if they can obtain a low interest loan. Fine, but that is a very different situation on one who borrows/leases a car with little in the way of assets.

Other than the parking tickets all of this pain and suffering would have been avoided if you paid cash for your car. Your relationship with your father would not be suffering. Sure the banks would have less money, but do you really want your paycheck to go to bankers?

Answer 2

Dad's strange maneuver with your credit bureau doesn't end his obligation to GM Finance, or whatever large corporation you and he are on the hook with. Keep making your monthly lease payments, and keep driving - could be the best way to go.

Answer 3

He can’t take his name off the loan, since he’s primary he might be able to take your name off the loan, particularly if he pays it off.

Resolve your parking tickets immediately, without involving your dad.

Most likely the remark on your credit report is actually a remark on his credit report, given that it is a joint account. It really doesn’t have any effect, except in the sense that it might mean you aren’t getting credit for having the account (ie credit history). If the account isn’t paid, it will negatively effect both of you.

If you buy a used vehicle and it lasts longer than the monthly payments divided by time, that’s just as good as a lease. New cars are for reliability and the ages (or until the car dies of old age).

You have leverage with your dad, as not paying the account will probably negatively effect him more than you. You could walk away and let him deal with it, bad credit score only matters when trying to get new credit, and you are married. That means that for most things that you want, the spouse with the higher credit score can do the borrowing using your combined income. That is probably what you should have done with car in the beginning (if possible).

p.s. leasing is for the well to do, who don’t want the bother of maintenance. This isn’t a condemnation of them, it’s simply the best way to constantly drive a new car.

Answer 4

There are a couple of different things going on here. You have also put some important information in various comments that aren't in the question, so I'll try to take them all into account here.

In a comment you referred to "tickets from Louisiana that he wont even show me and give me the chance to fix". So you've never actually seen these tickets, all you have is his word? Can anyone else that lives in his house provide you with that information, or at least verify that they exist in that amount? There are a lot of unknowns here, including the particulars of Louisiana law (which I am most certainly not knowledgeable of). Step 1 would be to find out whose name is on the tickets, as that would establish whether you can pay them off or whether you could only reimburse your dad after he pays them off. If you can't get the tickets themselves, I'd recommend contacting the traffic court in the parish where you think you received the ticket. Losing a ticket is common, so they'll have ways to look them up and provide you with the info you need. Some places like New Orleans have online systems where you can look up your own tickets based on license plate number, and pay them online without having to appear in person. If this is a ticket from an automated red light camera then you might not really have to pay it at all. A Baton Rouge news outlet reported:

... city officials have previously admitted there’s no way to punish drivers who ignore a red light camera ticket, meaning many go unpaid.

Red light cameras have been declared unconstitutional in many areas, but whether you want to risk ignoring such a ticket is up to you.

Regarding your credit report, your first step would be to get copies of your credit report and see exactly what (if anything) was put on there. You're entitled to one free copy of your credit report each year from each of the three credit bureaus. The official way to request these free copies is via annualcreditreport.com (other sites that claim to give you free copies have hidden gotchas, this is the only one endorsed by the federal Consumer Financial Protection Bureau). Look over these reports in detail. If there's any indication that your dad put a remark on your credit report, use the credit bureaus' dispute process to resolve it (Experian, Transunion, Equifax). Incorrect information on a credit report is fairly common, and these companies have entire departments set up to take care of things like this. The more evidence you can provide to back up your claim, the faster the problem will be resolved. A signed statement from a witness (i.e., your mother) would back up your side of the story. It's a bit unusual that the dealership allowed your dad to sign the paperwork without appearing in person. Dealerships (in my experiences) normally have rather extensive requirements for checking IDs, etc. before signing loan/lease paperwork since they have a vested interest in making sure the loan gets repaid. I'd expect they'd at a minimum require a notarized signature, but those rules vary from state to state so your locale might be different. In any event, a reputable dealership should have enough of a paper trail to satisfy the credit bureau, and they'll probably give you copies if you ask nicely.

As for your car title, federal privacy law prevents you from seeing the owner's name and contact info on something like a Carfax report. You should be able to get a certified copy of the title from your county or state records office, or whoever handles vehicle registrations in your locale. Since you haven't paid off the vehicle yet, you may have to get the lien holder - whoever it is you got the loan from - to request the copy. Your best bet might be to talk to the lien holder directly. They should already know the name(s) on the title, and you should have access to that information since your name is on the loan. If the vehicle is in your name only, then you can sell it without your dad's involvement at all.

I would advise you to not be too quick to sell it, especially for less than what you owe. If you're still able to make the payments on it, your best bet is probably to keep making payments normally. Even if there really is a flag on your credit report regarding the loan, that flag would be moot once the loan is paid off, plus all information falls off the report after a period of time. An established history of making on-time loan payments is quite beneficial for your credit.

Additional resources:

• How to get your credit report, make corrections, etc.
• Links to information about individual Louisiana parishes

Answer 5

This is complementary to the other answers given.
It does not address your stated question per se but does address your main apparent problem.

Complementary to all the good advice re loans etc I suggest that you do your best (which MAY fail) to approach your father and ask if you two can sit down together, discuss what happened and how it can be resolved amicably as loving father and daughter.

• Having your mother there should help.

• Taking an understanding and accepting approach would 'probably be wise'.

• Note that you'd paid everything on time so far.

• Note that the tickets were probably from "covert police action" and that you will pay them.

• Apologise (!) for him having been upset.

• Possibly note likely tricky action by the car dealer but that is maybe not too relevant now.

If the situation gets back to the prior situation all should be well.

____________________________

Were they parking tickets or other?
Maybe you got freeway auto-logged speeding tickets where you get no paper record.

Have you seen the tickets? - conforming that they match where you were and when would be wise. If they do seem to match your travel patterns then unless you wish to contest them you have little option other than paying them. If they are for times and places where you had not been they MAY be contestable by written response. Or not :-(.

Answer 6

It sounds like your step-father wants simply to not be the owner of the vehicle, and that you have been acting as the owner of the vehicle anyway in terms of loan repayments and insurance payments etc. If your step-father wants money for the vehicle it would complicate things, but it sounds like he just doesn’t want something he didn’t think he agreed to (primary ownership of the vehicle).

Cars can be bought and sold, and depending on your jurisdiction, it may be as simple as registering a transfer with the relevant authorities. Here, for example, is a link to what seems to be the New York department of motor vehicles website what provides information about transferring vehicle ownership. You’ll need to find the relevant information for your jurisdiction.

Your step-father may need to be the one who initiated the transfer to your name.

Since you are concerned about not being able to refinance the vehicle, consider approaching your current lender to say that you are the one making the payments, and that you would like to acquire vehicle (and the primary owner wants to transfer ownership to you) providing the loan can be redone in your name under the same terms.

• consider having your stepfather acknowledge in writing that he wishes to transfer ownership of the car to you before approaching the lender - all this is moot if he actually wants to retain ownership, wants money for the transfer, or wants more than you’re willing to pay him); and

• if the lender agrees, ask for the agreement in writing, together with any terms and conditions they may impose (e.g. fees to do the changeover) - this will come in handy if they change their mind and refuse to refinance after you’ve done the ownership transfer.

It doesn’t matter that you don’t currently have the official title documents - it’s your step-father’s responsibility as the seller to prove ownership to the relevant parties.

Disclaimer: I am not familiar with the laws in your jurisdiction, and I am neither a lawyer nor a qualified financial advisor, and the above is not to be construed as legal or financial advice. Seek advice from appropriately qualified professionals before acting on the above.

Answer 7

To directly answer your question: No, your dad cannot unilaterally remove himself from the loan. Theoretically he could ask the lender nicely if they would remove him, but that's very unlikely.

More realistically, the way to get him off the loan is to pay off the loan, either with cash or by getting a new loan in your name only, or buy selling the car.

Separately, please keep in mind that there are two different things in play: The OWNER (whoever is shown on the title and registration and who usually is responsible for parking tickets) and the BORROWER (the person on the loan documents, including any co-signers). So when you say "he's primary.." - make sure you're clear about primary for what.

Regarding the parking tickets your dad is upset about, that has nothing to do with the loan and removing him from the loan won't fix that. That problem gets solved by him getting off the title.

As far as a mark on your credit - your dad doesn't have the ability to do that any more than I do. So I don't know what your dad did there, but it doesn't matter anyway. That's not going to stop you from fixing this.

Note that the BORROWER(S) do not get a vote in what happens with the car, only the OWNER(S) do. You have to be very clear about which of these things you and you dad are. Either of you could be the owner or borrower or both. But you have to look and make sure you know. If your dad is on title as an owner (probably since he's getting parking tickets), then you cannot sell or get a new loan without his permission. Hopefully that is not the case, unless maybe if it says "Krysten OR …" on the title.

Do this:

1. Make good with your dad. Give him the $600 or whatever he say it is. Borrow from a friend if necessary. Do no involve your family in any more financial transactions like buying cars or houses.
2. If your dad is on title, ask for his cooperation with the following steps so that you can help him get off the loan.
3. Get a small personal loan (meaning not a car loan) that is enough to enable you to sell the underwater car for whatever you can get and pay off the loan, plus an extra two thousand to buy a different $2000 car without any more debt. For example, if you can sell it for $11500, then get a loan for $5k. $3k to cover the difference between what you owe and what you can sell it for, and $2k more to buy another car. You might be able to get this from a peer-to-peer online lender or a small neighborhood bank or credit union. Or a friend. As a last resort you might even ask your dad for this loan as a way to get himself off the other one.
4. Buy a $2k car with cash and no loan. It will be both safe and reliable enough for now. You can upgrade it in a few months with all the money you are saving by not having a car loan.
5. Pay off your personal loan ASAP
6. Listen to a few Dave Ramsey podcasts about cars. You will be permanently cured of borrowing money to buy a car.