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  1. #1
    Join Date
    Jan 2011
    Posts
    3

    Default Parents Co-Signed Car Loan then Paid It Off

    My question involves personal finance in the State of: Colorado

    A year ago I bought a car, since I am young I needed my parents to co-sign for me to get the loan. Only my name is on the title. I don't live with them, but we have been having issues lately which has caused them to threaten me with taking away my car. I have made all payments on time and have proof of this. Yesterday after another fight they told me that they went into the bank the day before and paid off my car in full. Then they said that they expected me to pay them off for the amount they paid on it.

    My question is since they paid off the loan would the bank transfer ownership on the title without my permission or me being involved? Can they show up and take the car legally? We never made any agreement that I would pay them for the total amount they paid 2 days ago. They never told me they were going to do this. I don't have the money to pay them fully for the car currently(reason for the loan in the first place).

    I am not trying to steal this car from them, due to my morals on the matter. I have every intention of leaving the car at their house with the keys and title AFTER I have another car. I live 30 miles from college so I need a car to get back and forth from school and work. I was planning on buy another, cheaper, car outright in a couple of weeks when my school grants come in. Then selling my current car and paying the bank loan off.

    So I need to know if they can legally take the car within the next 2 weeks before I can get another car?

    Thanks for your advice. Hopefully this hasn't been cover a million times, I did a search and didn't find anything in regards to parents paying off the loan.

  2. #2
    Join Date
    Sep 2010
    Posts
    19,901

    Default Re: Parents Co-Signed Car Loan then Paid It Off

    The bank has no authority other than to remove their lien from the title. They can't add your parents nor can your parents get on the title no matter what they threaten.

  3. #3
    Join Date
    Jan 2011
    Posts
    3

    Default Re: Parents Co-Signed Car Loan then Paid It Off

    Thanks I was guessing this was the case.

  4. #4
    Join Date
    Mar 2009
    Location
    Key West, FL
    Posts
    2,350

    Default Re: Parents Co-Signed Car Loan then Paid It Off

    To make it clear. They got themselves off the loan and the lenders lien wil be dropped from the title.

    The fact that they paid off the loan does not have any effect on the ownership of the car. If you are the only person on the title, you are the only owner. No bank can add people to a title, etc. Can't be done nor would any bank try even if the customer asked.

    The car is yours free and clear. What they did was make a GIFT to you. I assume you were making payments and there was no default or legal action against them or you over the car. If that is the case, they wouldn't even be able to sue you for the money and win. If you are a moral person then you would pay them back, but they can't legally force you to.

  5. #5
    Join Date
    Jan 2010
    Location
    New Jersey
    Posts
    3,666

    Default Re: Parents Co-Signed Car Loan then Paid It Off

    Now that the bank loan is paid in full the bank will release the title to you. If your parents intercept the title in the mail they could sign your name to the title and transfer the title into there name. This is however illegal so keep your eye on the mail for the title from the bank.

  6. #6
    Join Date
    Jan 2011
    Posts
    3

    Default Re: Parents Co-Signed Car Loan then Paid It Off

    Yea first thing on Monday I went into the bank and got the address changed to my house. All is well now. Thanks.

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