How to Get Someone to Take Over Your Car Payments

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When you buy or lease a vehicle, you are committing to paying off the car over time or leasing it for an outlined timeframe. However, something unexpected could come up that prevents you from keeping up with your monthly payments like a sudden illness or loss of employment.
In this scenario, you could let the lender repossess your car, keeping in mind, repossession can be costly and damaging to your credit score.
If you find yourself unable to pay your auto loan or lease, in some instances, it could be possible to transfer the payment to a new borrower. Here’s what you need to know.

Read your lease or loan agreement

If you’re considering transferring your existing loan payment to someone else, start off by reading your lease or loan agreement. Your contract will outline your options when it comes to transferring the car to someone else or allowing them to take over the payments. You can also contact your loan company or financial institution to see if they can advise you on what to do.
Leases are usually transferable and they are relatively easy to transfer, as long as the new lessee has a good credit score and a clean driving record.
On the other hand, if you’re looking to transfer a car loan, the process is a little more difficult. In many cases, it’s not possible to transfer a loan. If you want to transfer the payments to someone else, they may have to refinance the loan in their name.

Refinancing a loan

In most cases, if you can’t afford your car loan anymore and a new driver wants to take it over, they will have to have the loan refinanced in their name. Here are the steps to refinancing a car:
Look for lenders: Start by shopping for lenders with the buyer. Find a lender that offers terms that meet their needs.
Apply for a refinanced loan: Next, apply for the refinanced loan. In most cases, this requires you and the buyer to submit an application, along with the required paperwork, including:
  • Photo ID
  • Proof of income
  • Registration
  • Proof of insurance
  • Vehicle Identification Number (VIN)
  • Vehicle make, model, and year
  • Odometer reading
  • Terms of the original loan (including outstanding balance)
Transfer the registration: Once the loan has been accepted, the last step is transferring the vehicle into the new buyer’s name at your local Department of Motor Vehicles (DMV). You’ll also need to pay any associated fees, which vary by state.

Transferring a Lease

If you want to transfer a lease (and it’s allowed by the leasing company), the first step is finding someone to assume the lease. Once you have someone ready to sign on the dotted line, follow these steps:
Contact the leasing company: Start by contacting your leasing company and letting them know your intentions. Ask a representative about the lease-transfer process.
Submit a credit application: The person who will assume the lease must undergo a credit check. If they fail, they probably won’t qualify to take over the existing loan.
Transfer the current lease: If the new lessee’s credit score is adequate, you’ll probably also have to pay some fees and taxes before the lease takeover is completed.

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