Legal question about car ownership/financing

In My Humble Opinion
1

My sister has a bit of a complicated legal situation, and I’m pretty sure that she just needs to talk to a lawyer to see what (if anything) can be done, but we aren’t even sure what kind of lawyer she would need to talk to. Here’s the situation:

My sister took out a loan as the primary buyer (or whatever it’s called) on a car for her friend who was also a co-signer. We aren’t 100% sure how it works, but as they are both co-signers on the loan, they are both co-owners of the car (as long as payments are being made and it doesn’t get repossessed).

Well, the verbal agreement was for her friend to actually be making the payments herself, and then to trade the car in for a different car that her friend would buy. Or something stupid like that. Anyhow, as you can probably guess, friend suddently STOPPED paying car loan, and now is completely incommunicado. She lives in Arizona (sister and I live in Texas). She has tried even reaching out to her mom and her friend’s mom says that she’s not even talking to her or returning her calls.

So basically, my sister has no idea if her friend even has the car anymore. The last text she got from her said that she had the car, but there’s no proof or evidence and we both have suspicions now that the car is just gone. Of course, if the car is gone, it needs to be reported lost/stolen or whatever… and I’m sure the financing company needs to know about it.

To complicate the matters further, the car was insured through the friend, not my sister’s insurance company. Not sure if my sister even knows which insurance company the car is insured under, although she could probably find out. Even if she does, is it worth talking to them about it?

So obviously the best solution is for her friend to just start making the payments, but that isn’t going to happen. Next best solution is that my sister gets the car back (somehow, from Arizona) and then sells it, but I’m not sure how that works with her friend being a co-signer on the current loan. My sister has half a mind to just stop making the payments… but I don’t think that’s really a very smart option.

So, really, obviously, the best thing to do is talk to a lawyer and see what all the legal options are, but my sister doesn’t know any lawyers and we don’t even know what kind of lawyer to get in touch with.

Any and all suggestions are appreciated :slight_smile:

2

Well, not to be too undelicate but your sister screwed up.

Beyond that, it’s likely that both own the car and the friend is within her rights to take it to Arizona. But stopping payments just moves the burden to your sister. A bank ain’t going to care which of the two makes the payments. If they can’t find the friend they’re going to come at your sister.

So, there’s probably a civil suit. If both are owners of the car your sister can probably take action through the courts that way. But as for the verbal agreement? You’ll never get that enforced.

I wouldn’t be surprised if there were some sort of criminal issue. Even if the friend owns it your sister does, too and as primary signer, may have primary rights. You could have her talk to someone in the sheriff’s office about reporting her as having stolen it. That might get some action.

3

Yeah she knows she screwed up. But as a primary buyer of the car who is making payments, it seems like she should have some legal right to go take her own car (if she can find it), and then re-sell it… or something.

What kind of lawyer would be best to contact, just to figure out what exactly she can do other than just keep making the payments on a missing car or let it go into default?

Is it worth contacting her friend’s insurance company to see if the car is currently insured, and to inform them that the car cannot be verified to even be in possession of her friend anymore?

4

I don’t believe your sister is co-owner of the car, just co-payer of the loan. A car has a title, and whoever’s name is on the title is the owner.

Your sister may be on the title, but that is separate from the loan.

I was the co-signer on my car loan, with my dad as the principle. His name is not on the title, just mine.

I have no idea how this is relevant to the story, though.

5

Whose names are on the title?

6

IANAL but I doubt she can do much. After her divorce, my daughter is still on the hook for a car loan on a car that her ex got as a part of the property division. She has to trust that he will pay off the loan and not mess up her credit. He is the only one on the title.