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  1. #1
    Join Date
    Jul 2006

    Default Leased My Car to Family Member- insurance question

    My husband leased our car to a family member who needed a vehicle. We are still paying the loan on this vehicle, but the family member makes a smaller payment to us for use of the vehicle. We pay the insurance on the car and they pay their own insurance. We wrote out a contract explaining the terms of the lease and it was signed.

    Over the past few months, the family member had difficulty making payments so we took the car back according to our agreement. We live in Massachusetts.

    My questions are: 1. Was it legal for us to do a lease while we are still paying the bank for the vehicle? 2. Was it legal for them to have their own insurance and for us to insure the car?

    They are mad at us for taking the car back and informed us that they were letting our insurance company know they used the vehicle. I didn't think we did anything wrong and thought it was legit. Just curious and worried...

  2. #2
    Join Date
    Sep 2005
    Behind a Desk

    Default Re: Leased My Car to Family Member- insurance question

    It's hard to know what your insurance company would do if it found out that you had "leased" a car that was covered under the policy. Had there been a claim while the "lease" was in effect and they found out, they probably would have denied the claim.

  3. #3
    Join Date
    Jul 2006

    Default Re: Leased My Car to Family Member- insurance question

    2. Yes its legal to have 2 insurance policies, but usually not done because of the duplicate coverage AND the cost. It may have been a smart thing to do, in your situation. The insurance company may not accept his word about him driving your vehicle.

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