[elizabeth2]

Hi, I made a terrible mistake, I decided to take out a car loan for my now ex boyfriend. It is a mistake because it is a big loan, for a luxury car. Now that we are over, I would like to cut all ties but I cannot afford this loan payment monthly. I have perfect credit and have worked very hard to save a bit of money. I was thinking of returning the car to a car dealership (at a major loss) and then just defaulting on the leftover of the car loan... Unfortunately my ex hasn't taken good care of it so if I sell it privately, I will also lose much money. This does sound irresponsible but seems for now the only viable solution. What will the impact be on my credit rating (Which is now at 9.3)? Thank you so much.

 

[james4beach]

There are a few car experts around here, hopefully somebody will know and can help you out with ideas.

Was it a new car, or used? Unfortunately new cars instantly depreciate the moment they leave the dealer's lot.

 

[Mortgage u/w]

Unfortunately, I see this happen quite often, and I never understood "why". NO ONE should EVER be taking out loans for somebody else - regardless their relation.

You have two options:
1- you get the loan transferred to your ex-boyfriend, or
2- you trade-in the car and have your ex assume any loss (chances are you will be assuming them if he's a deadbeat)

I do have a couple of questions that intrigue me. Did you take the loan on your own or jointly with him? If on your own, why? Is it feasible to simply take the car over? And what do you mean by a credit rating of 9.3? Credit is measured by a Beacon or FICO score, which are usually between 600-900. Anything below 600 is considered poor, but I have never seen a score below 400. I'm assuming your payments are already defaulting?

 

[Mukhang pera]

To whom is the loan payable? A bank or...? For how long have payments been made and who has made those payments?

I am guessing the car stands as security for the loan and there is a chattel mortgage registered against the car, but that's just a guess.

You mention turning the vehicle in to a dealer. Is it in your possession and is title in your name?

Like Mortgage u/w, I am curious about a 9.3 credit rating. Out of a possible 10? Who came up with that rating system?

 

[Rusty O'Toole]

You can't get out of it by handing the car back to the dealer. If they sell it at a loss they can come after you for the rest of the money. Whose name is the car in? Whose name is the loan in? I don't think you can take out a loan on someone else's car so I should think, both car and loan are in one name? In that case, take back your car (if the loan is in your name) or let him make the payments and keep the car (if it is in his name).

 

[elizabeth2]

Unfortunately, I see this happen quite often, and I never understood "why". NO ONE should EVER be taking out loans for somebody else - regardless their relation.

You have two options:
1- you get the loan transferred to your ex-boyfriend, or
2- you trade-in the car and have your ex assume any loss (chances are you will be assuming them if he's a deadbeat)

I do have a couple of questions that intrigue me. Did you take the loan on your own or jointly with him? If on your own, why? Is it feasible to simply take the car over? And what do you mean by a credit rating of 9.3? Credit is measured by a Beacon or FICO score, which are usually between 600-900. Anything below 600 is considered poor, but I have never seen a score below 400. I'm assuming your payments are already defaulting?

Unfortunately I can't transfer the loan as his credit isn't good... Looking back, I don't know why I did it.
I took the loan out on my own, but at first I thought it was joint. I think it happened so fast or he lied.
It is not feasible to take the car as its too much on my own. Perhaps I should just sell it for whatever I get and use up ALL my savings for the loan?

I saw my credit rating on a lease application and it was 9.3 ... Maybe that was a typo. Regardless, Ive worked very hard at having perfect credit. How damaging is it to have bad credit for a few years?

Thanks for your answer.

 

[elizabeth2]

Unfortunately, I see this happen quite often, and I never understood "why". NO ONE should EVER be taking out loans for somebody else - regardless their relation.

You have two options:
1- you get the loan transferred to your ex-boyfriend, or
2- you trade-in the car and have your ex assume any loss (chances are you will be assuming them if he's a deadbeat)

I do have a couple of questions that intrigue me. Did you take the loan on your own or jointly with him? If on your own, why? Is it feasible to simply take the car over? And what do you mean by a credit rating of 9.3? Credit is measured by a Beacon or FICO score, which are usually between 600-900. Anything below 600 is considered poor, but I have never seen a score below 400. I'm assuming your payments are already defaulting?

There are a few car experts around here, hopefully somebody will know and can help you out with ideas.

Was it a new car, or used? Unfortunately new cars instantly depreciate the moment they leave the dealer's lot.

You can't get out of it by handing the car back to the dealer. If they sell it at a loss they can come after you for the rest of the money. Whose name is the car in? Whose name is the loan in? I don't think you can take out a loan on someone else's car so I should think, both car and loan are in one name? In that case, take back your car (if the loan is in your name) or let him make the payments and keep the car (if it is in his name).

@James4beach
It was used (2013) so I would be reselling a used car for a huge loss (ex boyfriend hasn't really kept it in tip top shape).

@Rusty O'Toole
The car is registered in his name, and the loan in mine. We live in Quebec so perhaps this is allowed here? I wish it was all in his name!
How will they come back for the rest of the money? Can I just default and live with the consequences?

 

[elizabeth2]

evil genius

To whom is the loan payable? A bank or...? For how long have payments been made and who has made those payments?

I am guessing the car stands as security for the loan and there is a chattel mortgage registered against the car, but that's just a guess.

You mention turning the vehicle in to a dealer. Is it in your possession and is title in your name?

Like Mortgage u/w, I am curious about a 9.3 credit rating. Out of a possible 10? Who came up with that rating system?

The loan is a bank loan, and the car is registered under his name.

I will verify the rating system and let you know!

 

[elizabeth2]

To whom is the loan payable? A bank or...? For how long have payments been made and who has made those payments?

I am guessing the car stands as security for the loan and there is a chattel mortgage registered against the car, but that's just a guess.

You mention turning the vehicle in to a dealer. Is it in your possession and is title in your name?

Like Mortgage u/w, I am curious about a 9.3 credit rating. Out of a possible 10? Who came up with that rating system?

You can't get out of it by handing the car back to the dealer. If they sell it at a loss they can come after you for the rest of the money. Whose name is the car in? Whose name is the loan in? I don't think you can take out a loan on someone else's car so I should think, both car and loan are in one name? In that case, take back your car (if the loan is in your name) or let him make the payments and keep the car (if it is in his name).

The loan is in my name and the car is in his name. Unfortunately I can never guarantee he makes the payments which is a big problem. This is why I was wondering if there is any way I can get out of this mess.
If the dealers sell it at a loss, what happens if I dont pay the difference?

 

[elizabeth2]

You can't get out of it by handing the car back to the dealer. If they sell it at a loss they can come after you for the rest of the money. Whose name is the car in? Whose name is the loan in? I don't think you can take out a loan on someone else's car so I should think, both car and loan are in one name? In that case, take back your car (if the loan is in your name) or let him make the payments and keep the car (if it is in his name).

To whom is the loan payable? A bank or...? For how long have payments been made and who has made those payments?

I am guessing the car stands as security for the loan and there is a chattel mortgage registered against the car, but that's just a guess.

You mention turning the vehicle in to a dealer. Is it in your possession and is title in your name?

Like Mortgage u/w, I am curious about a 9.3 credit rating. Out of a possible 10? Who came up with that rating system?

There are a few car experts around here, hopefully somebody will know and can help you out with ideas.

Was it a new car, or used? Unfortunately new cars instantly depreciate the moment they leave the dealer's lot.

It was used, 2013...

 

[Chica]

elizabeth, you should watch Judge Judy. Almost every time I watch the show your exact scenario is played out. Boyfriend/girlfriend buy a car and take out a loan and the relationship ends and the person with the car decides not to pay anymore (probably the one who had the bad credit to begin with) or trashes the car and the other person is left stuck making the payments. And one person always takes a hit on their credit rating.

You don't need any ties to him. If you've talked to your bank you'll find out they don't want your used car either. They just want their money. Either sell the car or have the bank take it back. And yes, there will be a difference between the amount the car sold for and the amount you still owe on the loan that you will have to pay.

Then you go after your ex for half the difference. Once you're chasing after him for the difference you should look into applying to the Judge Judy show to get a judgement against him which the show pays, plus pays your travel and hotel. Judge Judy always awards only half the amount that is still owing because of the boyfriend/girlfriend's stupidity of taking out a loan. Probably the judges here in Canada have a similar view.

An expensive mistake but you don't want to drag this on too long having this car between you. If he gets in an accident and it's totaled and he doesn't have collision insurance, you're still stuck paying the amount due on the loan whether or not the car is driveable.

Just wondering how he managed to get the car in his name if the loan is in your name?

You might want to consult a lawyer, most provinces have legal services that you can call for a name of a lawyer who will give you half hour consult for $30 or so.

 

[Rusty O'Toole]

You need to talk to a lawyer. See if legal aid will help. Gather up all the paperwork, like loan papers, car registration, sales contract, any receipts etc.

You signed the loan, and that means you owe the money. All of it. If you don't pay it back the bank or loan company has the right to collect the money same as any other loan. There are millions of people who are underwater on car loans who wish they could dump the car and stick the lender for the rest of the money. Too bad, the banks already thought of it and they are not interested in bailing you out.

Your best shot is probably to take the car back, clean it up as best you can without putting any large amount of money into it, and sell it privately. You will get more that way than if you sold it to a dealer. If the bank repossesses it they will add all kinds of fees and expenses then sell it wholesale and you will be worse off.

If there is a balance owing you will have to pay it. If the car is not collateral for the loan then you can make payments, but if the car is collateral you must pay the loan off when you sell it.

We don't know if the value of the car is larger than the loan, in that case you can get out from under without putting more money in .

The whole thing is complicated. Even more complicated as I don't know anything bout Quebec law. Although, I am pretty sure banks aren't giving away free cars there or anywhere else. See a lawyer and don't forget to bring all the paperwork you can find.

 

[twa2w]

Do you have physical posession of car or does ex still have it. Is he willing to return it to you and sign ownership to you.

Assuming he will sign it over to you, you should go talk to your bank. Advise them of the situation and tell them you are trying to sell the car. They may allow you to skip a payment or pay interest only for a month or so to give you a break while you try to sell it.
Detail the car as best you can and get it listed on Kijiji and auto trader. I suggest you have your dad or brother meet prospective purchasers. ( not being sexist, just a safety thing).
Arrange with the bank to release vehicle if they even hold it as security.
Arrange a reduced payment on the deficiency balance.

Consider it an expensive lesson. You could try suing your ex for the deficiency in small claims court but not sure how far you would get. Perhaps a default judgement and garnishee his job.

If you turn the car back to the bank, they will sell it( likely for less than you would get) then go after you for the deficiency and this will destroy your credit.

The dealer is likely not involved in anyway and unless you try to sell the car to them or ask them to sell it for you( they would charge a fee) if you return the car to them, they would turn it over to the bank.
Note. This may vary by province and whether you signed a loan or conditional sales contract.

 

[Mukhang pera]

Sorry to appear pedestrian, elizabeth, but a bit more info please.

The loan is from a bank to you. Title to the car is in his name. Does the bank hold any security for the loan? Ordinarily, the bank would take the car as security, but if the loan is to you and title is with him, I don't see that being the case unless he was party to the loan agreement and pledged title to the car.

I know little about Quebec law, but one angle I am looking at is whether Quebec is a "seize or sue" jurisdiction. That won't matter if the bank does not have the car as security.

 

[Mortgage u/w]

Unfortunately I can't transfer the loan as his credit isn't good... Looking back, I don't know why I did it.
I took the loan out on my own, but at first I thought it was joint. I think it happened so fast or he lied.
It is not feasible to take the car as its too much on my own. Perhaps I should just sell it for whatever I get and use up ALL my savings for the loan?

I saw my credit rating on a lease application and it was 9.3 ... Maybe that was a typo. Regardless, Ive worked very hard at having perfect credit. How damaging is it to have bad credit for a few years?

Thanks for your answer.

Please provide more details. What is the make of the car and what is the balance of your loan? Who is making the loan payments? What does your ex have to say about the whole situation? Is he cooperating with you? Willing to sell the car?

 

[xtthew]

Call your lender and ask for a couple of extensions on payments

Then go to a lawyer and ask for legal advice on what to do next.

 

[gardner]

The loan is in my name and the car is in his name.

Ouch. You can't even sell the car if it's not in your name. I bet the loan is not secured against the car either.

Probably small-claims court would be the simplest. Produce all the facts and paperwork for the judge and get her to rule that the boyfriend has to take over the financing and pay you back the loan. Then, most likely, pay the loan back yourself anyway, as the deadbeat ex ignores the ruling and drives around in his free car.

Who paid for insuring it? You might be able to cancel the insurance and get a few bucks back if it's in your name.

 

[OptsyEagle]

A credit rating is really the result of whether a person does what they promise to do. You promised to pay the bank back their money and now you are thinking about defaulting on that promise. I don't think you need us to tell you what it will do to your credit rating. Credit ratings are designed to separate the people that do what they promise from those that do not.

You mentioned in the original post that you were going to pay for the loan, when your boyfriend was your boyfriend. That tells me that you must have believed that you could afford it then. Is it just a matter of "not wanting" to pay it now that your boyfriend is not your boyfriend. With that being said, why should the bank pay for your dating mistakes. They loaned the money to you in good faith. Were they wrong?

I find it hard to believe that the loan company would not want your boyfriend as a joint debtor if he was the only name on the title for the car. Obviously he must have agreed to put the car up as collateral for the loan but I would have thought the bank would also want him as a debtor as well, just for legal purposes. Not that it matters. Sounds like he is a loser.

Anyway, the best you can garner from this situation is to learn a good lesson. You will be paying for the lesson for a long time whether you pay off the loan or default so don't waste it.

 

[elizabeth2]

Ouch. You can't even sell the car if it's not in your name. I bet the loan is not secured against the car either.

Probably small-claims court would be the simplest. Produce all the facts and paperwork for the judge and get her to rule that the boyfriend has to take over the financing and pay you back the loan. Then, most likely, pay the loan back yourself anyway, as the deadbeat ex ignores the ruling and drives around in his free car.

Who paid for insuring it? You might be able to cancel the insurance and get a few bucks back if it's in your name.

So... I dont know much about car loans but what do you mean by securing the loan against the car? Yes, as you can see, I did this loan way too fast. I am currently looking for a lawyer and will see what can happen. The ex pays for insuring it..

 

[elizabeth2]

Yes that is what I am doing this week,