What to do if I financed a car for my adult daughter on the promise she would refinance it after repairing her credit but she never did?
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What to do if I financed a car for my adult daughter on the promise she would refinance it after repairing her credit but she never did?
That was 4 years ago. Now she has purchased a new car and is letting her 21 year old son drive the car because he wrecked his. The car is registered in my name. I am concerned about my liability exposure if the car is wrecked. And wonder if there is anything I can do to limit that liability?
Asked on June 6, 2013 under Accident Law, Texas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
If the car is registered in your name, it is legally your car. One way to limit your liability is to take it back and not let her son--who seems like he be a bad driver--drive it. If you do let him drive it, you will be liable for what he does as a permitted driver. So either claim the car, or make your daughter buy it from you and transfer it to her--and yes, you can sell it to her for under market value, though I would suggest not too much under--you want it to look like a legitimate transaction. You'll end up getting stuck for the value of whatever remaining payments there are for the car if you do this (e.g. you'll probably have to first buy out the financing, then sell the car), but it's likely better than incurring the risk of liability.
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