Suggestions for gifting a car

[timvp]

Got a friend back in town after graduating from college. I've agreed to buy them a car with eventual repayment down the line. Few questions:

1. Anyone have a used car dealership suggestion? I know that's bordering on an oxymoron but I don't really feel like dealing with buying a car off of an individual. Better deals available but too much hassle. I'm looking for something 2006 or newer, 40K miles or less and ~$8K or less. Any recommended dealerships for that range of car? I'd be paying in cash so the financing aspect doesn't apply. I would consider new but I'm not 100% confident that I'll get repaid so I don't want to be out much more than $8K.

2. Any brand/make/model/year recommendations? The main focus would be something that is somewhat reliable since if it dies, the chances of repayment probably die with it.

3. Does it make more sense to keep the title in my name until repayment or would there be extra liability involved in that scenario? If there is any extra liability that could arise from owning the title on a car I don't have in my possession, I'd rather just sign over the title from the beginning.

Oh and if anyone has been car shopping in this economy, how desperate are the dealerships? Can I expect to be able to play extreme hardball?

Thanks in advance.

[batman2883]

ill take the car without any presentation and make it a convertible....

[Drachen]

Yes, you can be held liable for things that happen in "your" car. I was in a car accident, not my fault, the police said it wasn't my fault, the other 2 guys' (yes 2 trucks hit me at 80 MPH) insurance said it wasn't my fault, and paid me. Then 1 day before the statute of limitations (2 years) they served myself and my father. I was served for reckless driving, and he was served for allowing a reckless driver to drive his car. Needless to say it was laughed out of court, but the point remains, he was served too. Also, if you are going to put it in his name, don't sign it over. Purchase it in his name, otherwise he will have to pay the full tax to have it changed into his name. Sale price doesn't matter (like if you "sold" it to him for $1), they look only at fair market value, so unless you want to pay taxes on it twice, you have got to purchase it in his name. Lastly you can get a brand new Kia Rio for 7888 right now at world car, so that really fits all of your criteria and its new. Just a thought.

[BacktoBasics]

Never tell the salesperson you're paying cash.

I would leave the title in your name until you're paid in full.

Make sure that the person you are gifting it to has and keeps current insurance under their name.

I'm seeing good prices on single cab v-6 Dodge trucks but that might fall just above your price range.

[2Blonde]

I've dealt with 2 used car dealerships since my daughter started driving. I was very happy with Northpark Subaru Used car lot. We got a great deal on a 2008 Fusion w/10K miles. We offered cash and ended up saving a lot. I detailed it in another thread where I gave B2B props for his negotiating help. They had it listed for 16,500 + TTL & I got it for 15,000 walk out the door total price. They pulled all the"we can't do that" then when we started to walk, they caved.
Good luck.
Oh Yeah, we bought it right after Thanksgiving shortly after the auto companies went public.

[BacktoBasics]

Yes, you can be held liable for things that happen in "your" car. I was in a car accident, not my fault, the police said it wasn't my fault, the other 2 guys' (yes 2 trucks hit me at 80 MPH) insurance said it wasn't my fault, and paid me. Then 1 day before the statute of limitations (2 years) they served myself and my father. I was served for reckless driving, and he was served for allowing a reckless driver to drive his car. Needless to say it was laughed out of court, but the point remains, he was served too. Also, if you are going to put it in his name, don't sign it over. Purchase it in his name, otherwise he will have to pay the full tax to have it changed into his name. Sale price doesn't matter (like if you "sold" it to him for $1), they look only at fair market value, so unless you want to pay taxes on it twice, you have got to purchase it in his name. Lastly you can get a brand new Kia Rio for 7888 right now at world car, so that really fits all of your criteria and its new. Just a thought.However if there is some kind of falling out and he never gets paid in full their is no proof that the vehicle is his unless he has it titled in his name.

You're right about the taxes but a vehicle thats sold for 8k now might not be worth much 2-3 years down the road when its re-titled.

The couple of hundred dollar it would cost to re-title is well worth the peace of mind that what you just purchased won't be taken from you before full payment is received.

[Bartleby]

They had it listed for 16,500 + TTL & I got it for 15,000 walk out the door total price. They pulled all the"we can't do that" then when we started to walk, they caved.


sLADax2Js2A

[Drachen]

However if there is some kind of falling out and he never gets paid in full their is no proof that the vehicle is his unless he has it titled in his name.

You're right about the taxes but a vehicle thats sold for 8k now might not be worth much 2-3 years down the road when its re-titled.

The couple of hundred dollar it would cost to re-title is well worth the peace of mind that what you just purchased won't be taken from you before full payment is received.

I realize that he needs to protect himself from not getting paid, but it seems like he is not that concerned about that (wish I had 8k to throw around). Also, you are right about the "a couple hundred dollars is worth the peace of mind," but say he goes out and gets drunk and crashes into some family on their way home from dinner. That 8k is going to look very small when compared to the liability that he will have in that accident. If this is all a problem, purchase the car in the guy's name and write some kind of contract that states what happened and what is expected of both parties, that way TIMVP's liability is 0 and he still has some kind of claim to the car.

[2Blonde]

sLADax2Js2A

That's funny!!:lol

[BacktoBasics]

Definitely lead them to believe they'll need to secure financing for you and 0 down at that. The banks aren't advancing shit right now so any salesperson with an ounce of common sense would be working lean deals to get it through financing and avoid a big money down scenario. Then drop cash on them once you get to the application part.

[BacktoBasics]

I realize that he needs to protect himself from not getting paid, but it seems like he is not that concerned about that (wish I had 8k to throw around). Also, you are right about the "a couple hundred dollars is worth the peace of mind," but say he goes out and gets drunk and crashes into some family on their way home from dinner. That 8k is going to look very small when compared to the liability that he will have in that accident. If this is all a problem, purchase the car in the guy's name and write some kind of contract that states what happened and what is expected of both parties, that way TIMVP's liability is 0 and he still has some kind of claim to the car.I understand what you're saying but the if the guy has his own policy in his own name it generally doesn't matter who owns the vehicle so long as the primary driver has full coverage. I understand there is potential risk there so he'd have to weigh the risk of the guy not paying him back vs. the risk of the guy being sued and the insurance company failing to fulfill their end of the contract.

[Drachen]

I understand what you're saying but the if the guy has his own policy in his own name it generally doesn't matter who owns the vehicle so long as the primary driver has full coverage. I understand there is potential risk there so he'd have to weigh the risk of the guy not paying him back vs. the risk of the guy being sued and the insurance company failing to fulfill their end of the contract.


You also musn't forget that if some illegal activity goes down that would suck too.

[DPG21920]

Timvp, I am an insurance agent in town and I can answer questions you might have about liability issues along with trying contact some of the people I know at dealerships if you want. You can just give me a call. I will call my friend at the dealership and see what he has available within your range if anything at all.

There is massive liability issues here. Whom ever has the title to the car has to be listed on the policy as a named insured (edit: not in all cases which I can explain if you would like). If this friend is not living in your home and is not related to you, he does not have to be on the policy technically. It is called permissive use. He will be fully covered driving the car in your name, that is insured in your name. But, you are still liable for any lawsuits. He really should be listed if he is the only one driving, but it is a loop hole of sorts.

For example: A man that we insure, listed his daughter on his policy because he owns the car, although she is the only one who drives it. She got into an accident, killed someone and they sued him for all of his savings, investments and ...

The only way to free yourself of liability issues is to have everything in his name. On the flip side of this, now the car is legally his. So there might be some repayment issues. However, I am no lawyer, but if there was a "verbal agreement" I believe that can be upheld in court. But it would be smart to have him sign something in the form of a contract and document the purchase.

[CosmicCowboy]

You can avoid ownership liability issues and still maintain some control over the vehicle by listing yourself as lienholder...require his insurance to notify you of cancellation or non-payment. If he wrecks the car the insurance company pays you instead of him. If he tries to sell the car he has to get a release of lien from you first. The dealership you buy the car from can do all the paperwork for you.

[BacktoBasics]

You also musn't forget that if some illegal activity goes down that would suck too.You assume he'd be liable when he really wouldn't be. The insurance company or the legal system would have to completely fail to find the car owner guilty of anything.

I'd rather have a contract with an insurance company that a piece of paper between two buddies.

If you kill someone in my home and you're found guilty then its on you not the home owner. I understand that weirder shit has happened but the likelihood of someone who didn't commit the crime being held liable is rare and lot more rare than a buddy skipping out on paying.

Like you mentioned above its a reach and it got tossed. That kind of shit has nothing to stand on. Just like 90% of hand written paper contracts between pals.

Having the vehicle in his name and regularly checking to insure that the vehicle is covered by said driver offers way more protection.

[batman2883]

just make sure when you give them the car this cd is in the car

http://mandyarts.com/wedding/music/reception/8.proclaimers.500miles.mp3

[BacktoBasics]

You can avoid ownership liability issues and still maintain some control over the vehicle by listing yourself as lienholder...require his insurance to notify you of cancellation or non-payment. If he wrecks the car the insurance company pays you instead of him. If he tries to sell the car he has to get a release of lien from you first. The dealership you buy the car from can do all the paperwork for you.This is a much better solution. I completely forgot to think of this.

....and its only one box on the application for title that would need to be filled out not something complicated.

Great idea.

[CuckingFunt]

I would leave the title in your name until you're paid in full.

Make sure that the person you are gifting it to has and keeps current insurance under their name.

Depending on the company, this could be problematic. When I bought my car, for various tax/write-off reasons my grandmother purchased it as a business expense. She wanted to hold title until the car was paid off, but had to also add me and the car to the business insurance policy since several insurance companies turned me down for attempting to insure a car that wasn't in my name.

On the other hand, however, the beater first car that my dad gave me was never in my name, but I was able to easily switch the existing insurance policy into my name with no problems whatsoever.

[101A]

Got a friend back in town after graduating from college. I've agreed to buy them a car with eventual repayment down the line. Few questions:

1. Anyone have a used car dealership suggestion? I know that's bordering on an oxymoron but I don't really feel like dealing with buying a car off of an individual. Better deals available but too much hassle. I'm looking for something 2006 or newer, 40K miles or less and ~$8K or less. Any recommended dealerships for that range of car? I'd be paying in cash so the financing aspect doesn't apply. I would consider new but I'm not 100% confident that I'll get repaid so I don't want to be out much more than $8K.

2. Any brand/make/model/year recommendations? The main focus would be something that is somewhat reliable since if it dies, the chances of repayment probably die with it.

3. Does it make more sense to keep the title in my name until repayment or would there be extra liability involved in that scenario? If there is any extra liability that could arise from owning the title on a car I don't have in my possession, I'd rather just sign over the title from the beginning.

Oh and if anyone has been car shopping in this economy, how desperate are the dealerships? Can I expect to be able to play extreme hardball?

Thanks in advance.

1. Don't be shy about buying from an individual; an '06 or newer might very well have warranty left, which affords protection to you. That said, dealers should be "dealing" right now; business is slow. I bought several vehicles while I lived in SA; no dealer impressed me more than any other. Twice I've bought off of individuals; got better cars & paid less.

2. Hyundai is a good value; especially those model years onward. They have a reputation that is sub-Japanese; but as of late their quality is right up there = good value. Kia same thing.

3. My wife and I have bought two cars for her parents; both we've kept titled in our name. Ultimately, you are liable for what that car does; make dang sure your friend keeps it insured. I pay the insurance on both the vehicles my in-laws drive. Downside of titling it in his name? He trades it off the next day for something nicer, picks up a payment that he can't make; and your good-will was for naught.

2.

[BacktoBasics]

Depending on the company, this could be problematic. When I bought my car, for various tax/write-off reasons my grandmother purchased it as a business expense. She wanted to hold title until the car was paid off, but had to also add me and the car to the business insurance policy since several insurance companies turned me down for attempting to insure a car that wasn't in my name.

On the other hand, however, the beater first car that my dad gave me was never in my name, but I was able to easily switch the existing insurance policy into my name with no problems whatsoever.CC's plan eliminates these problems.

[DPG21920]

Plus I can insure it for you!

[DPG21920]

You can avoid ownership liability issues and still maintain some control over the vehicle by listing yourself as lienholder...require his insurance to notify you of cancellation or non-payment. If he wrecks the car the insurance company pays you instead of him. If he tries to sell the car he has to get a release of lien from you first. The dealership you buy the car from can do all the paperwork for you.

Good Idea.

[CuckingFunt]

CC's plan eliminates these problems.

Very true. Didn't read that until after I'd posted.

[clambake]

v bookie on when this friendship ends?

[CosmicCowboy]

v bookie on when this friendship ends?

http://ephesians.files.wordpress.com/2008/02/carkeys.jpg

[Drachen]

You assume he'd be liable when he really wouldn't be. The insurance company or the legal system would have to completely fail to find the car owner guilty of anything.

I'd rather have a contract with an insurance company that a piece of paper between two buddies.

If you kill someone in my home and you're found guilty then its on you not the home owner. I understand that weirder shit has happened but the likelihood of someone who didn't commit the crime being held liable is rare and lot more rare than a buddy skipping out on paying.

Like you mentioned above its a reach and it got tossed. That kind of shit has nothing to stand on. Just like 90% of hand written paper contracts between pals.

Having the vehicle in his name and regularly checking to insure that the vehicle is covered by said driver offers way more protection.

You mention that they have to prove that the car owner (TIMVP) is not liable. Meantime, he may have to hire a lawyer, take time off of work, etc to make this happen. Really the absolute best solution here is for TIMVP to buy it, then "personally finance" the sale of it to his friend. Draw up a contract and have himself named as the lienholder. That way his claim on the car is valid, and his name isn't on it. The problem with this scenario is that he must pay taxes twice unless he can get the dealer to treat him like the bank.

[DPG21920]

You assume he'd be liable when he really wouldn't be. The insurance company or the legal system would have to completely fail to find the car owner guilty of anything.

I'd rather have a contract with an insurance company that a piece of paper between two buddies.

If you kill someone in my home and you're found guilty then its on you not the home owner. I understand that weirder shit has happened but the likelihood of someone who didn't commit the crime being held liable is rare and lot more rare than a buddy skipping out on paying.

Like you mentioned above its a reach and it got tossed. That kind of shit has nothing to stand on. Just like 90% of hand written paper contracts between pals.

Having the vehicle in his name and regularly checking to insure that the vehicle is covered by said driver offers way more protection.

This is not true at all. You can most definitely be held liable if the car is in your name, just like my example of one of our insureds.

[Wild Cobra]

I'm no legal expert, but I believe the best option is to buy the car with whatever method you choose, but immediately put the title in your friends name. Keep all legal responsibility off of you. I believe you can gift up to $10,000 a year with no tax consequences.

As for cars. I recently bough my daughter her first car. The ones that have good mileage are retaining their value very well, at least in my area. People seem to be parting with the less fuel efficient and buying the more fuel efficient. I don't see getting a decent car meeting your requirements for $8,000 or less unless you buy one that gets poor fuel economy. Hope I'm wrong.

[CosmicCowboy]

You mention that they have to prove that the car owner (TIMVP) is not liable. Meantime, he may have to hire a lawyer, take time off of work, etc to make this happen. Really the absolute best solution here is for TIMVP to buy it, then "personally finance" the sale of it to his friend. Draw up a contract and have himself named as the lienholder. That way his claim on the car is valid, and his name isn't on it. The problem with this scenario is that he must pay taxes twice unless he can get the dealer to treat him like the bank.

The dealership won't care, it's a cash sale. They can list the friend as the owner and TimVP as the lienholder when they transfer the title the first time.

[ChumpDumper]

Loans and gifts are two different things.

Just give him the money. Get a promissory note if you really want the money back someday, but I have found it's best to act as if you lost it gambling.

[Wild Cobra]

Tim...

I have a problem...

It's a bad idea to make such deals with friends. If this is truly a friend, just gift the car with no expectation of repayment. If money comes back your way then fine. Just don't expect it. Otherwise, you are setting yourself up to possibly lose a friend.

What's more important?

[CosmicCowboy]

BTW, I used this same technique when I bought my kids cars...I put the vehicle in their name and listed myself as a lienholder. I wanted the extra protection just in case. In a worst case scenario an attorney is gonna settle for insurance limits if they know the legal owner doesn't have any net worth but if the legal owner has a substantial net worth they will expend a lot more effort trying to get all they can get.

[timvp]

Yes, you can be held liable for things that happen in "your" car. Thanks, yeah that is exactly what I was wondering.


You can avoid ownership liability issues and still maintain some control over the vehicle by listing yourself as lienholder...require his insurance to notify you of cancellation or non-payment. If he wrecks the car the insurance company pays you instead of him. If he tries to sell the car he has to get a release of lien from you first. The dealership you buy the car from can do all the paperwork for you.Very good idea. Hadn't thought of that :tu

[DPG21920]

Definitely the best way to do it is the lien holder route. You buy the car Timvp. Have them make you a lien holder. You then do an owner "financing" for your friend. It is now "his" car, even though you have the real title and interest. So he is the one who will have to insure the car.

Now, since their is a lien on the car, any claim payment will go to both of you (by law the insurance companies have to do this), and in order for him to cash any check from the insurance company, the lien holder (you) has to endorse it. You have now absolved yourself of any liability (just like normal lien holders, I cannot wreck a car, kill someone and then the family go after my lien holder), along with given yourself financial interest in the vehicle.

The key in all of this is that if a someone wants to insure a car in their name, but they do not have the title, in order for someone (the title owner) to be held liable, court would have to prove that title owner was the insureds "provider". In this case, you clearly are not, but in the case of father/son/daughter/family... it becomes more risky.

[Shelly]

Loans and gifts are two different things.

Just give him the money. Get a promissory note if you really want the money back someday, but I have found it's best to act as if you lost it gambling.

I agree with this. Just give him the $$ and let him deal with everything else.

[timvp]

It's a bad idea to make such deals with friends. If this is truly a friend, just gift the car with no expectation of repayment.Yeah, that's basically what I'm doing. I offered to purchase the car as a complete gift but they insisted on the repayment. I'm fine with eating the ~$8K if that's what it comes down to. I just don't want to be liable in case of an accident. I'm not counting on the repayment and it's last on the list of priorities in this transaction.

I could theoretically purchase a new car for $20K and draw up payment arrangements but I wouldn't be comfortable with that type of business agreement between friends.

[timvp]

DPG21920, you work for an agency or solo?

[DPG21920]

Yeah, that's basically what I'm doing. I offered to purchase the car as a complete gift but they insisted on the repayment. I'm fine with eating the ~$8K if that's what it comes down to. I just don't want to be liable in case of an accident. I'm not counting on the repayment and it's last on the list of priorities in this transaction.

I could theoretically purchase a new car for $20K and draw up payment arrangements but I wouldn't be comfortable with that type of business agreement between friends.

Well, truly the lien way is the best of both worlds. You do not really have to collect money from him, you can just be the interest holder if you want to cover your financial arse to some degree without having to worry about repayment. You will also not have the liability issue.

[DPG21920]

DPG21920, you work for an agency or solo?

I work for an agency, but we are an independent agency and I am an independent agent. We are contracted with a ton of national companies.

I have called a guy I know about some cars on his lot (it is a nice, reputable, major lot), but he was out of the office, so he will be calling me back soon, and if not, I will follow up with him tomorrow and see what he has available that meets your criteria. I have purchased 2 cars from him and my family has as well.

If you have any questions you can give me a call at work (I can post the number if you or anyone else wants it). I can shop the insurance with all of our companies and get you a quote for free (especially if they require it when you purchase the car)

[ChumpDumper]

The only reason I would go through this leinholder business would be if I wanted to make repossessing the car an option. Seems like an unnecessary pain in the ass otherwise.

[CosmicCowboy]

I can shop the insurance with all of our companies and get you a quote for free (especially if they require it when you purchase the car)

They BETTER require it. They can lose their dealer license for selling a car without getting proof of insurance before it leaves the lot.

[BacktoBasics]

So it turns out CC was good for something.

[CosmicCowboy]

The only reason I would go through this leinholder business would be if I wanted to make repossessing the car an option. Seems like an unnecessary pain in the ass otherwise.

It's really quite simple. It's just one more block to fill out on the title application.

It's really an aid to reminding the friend that he promised to pay the loan back. He can't sell or trade in the car without squaring up with TimVP.

[DPG21920]

They BETTER require it. They can lose their dealer license for selling a car without getting proof of insurance before it leaves the lot.

Well if Timvp (LJ I believe) has a car already and it is insured, then it is automatically covered for 30 days. If he is just going with his friend and letting him purchase it, then he will need insurance on that specific car.

[timvp]

I have called a guy I know about some cars on his lot (it is a nice, reputable, major lot), but he was out of the office, so he will be calling me back soon, and if not, I will follow up with him tomorrow and see what he has available that meets your criteria. I have purchased 2 cars from him and my family has as well. Cool, thanks.


If you have any questions you can give me a call at work (I can post the number if you or anyone else wants it). I can shop the insurance with all of our companies and get you a quote for free (especially if they require it when you purchase the car)I'm not sure about the insurance situation. You can PM me your number or post it in here in case anyone else may be interested.

[Wild Cobra]

Yeah, that's basically what I'm doing. I offered to purchase the car as a complete gift but they insisted on the repayment. I'm fine with eating the ~$8K if that's what it comes down to. I just don't want to be liable in case of an accident. I'm not counting on the repayment and it's last on the list of priorities in this transaction.

I could theoretically purchase a new car for $20K and draw up payment arrangements but I wouldn't be comfortable with that type of business agreement between friends.

Cool. That's simply how I am with friends. If he later has a hard time paying you back, you can let him off the hook by saying. "That's OK, Shit happens."

[DPG21920]

Cool, thanks.

I'm not sure about the insurance situation. You can PM me your number or post it in here in case anyone else may be interested.

Cool. Well even if it is you or your friend that is going to need insurance on it, just call me, I will get the info and quote it for whom ever needs the insurance :tu

[CosmicCowboy]

TimVP, I REALLY want a new Polaris Ranger. They are about 8K. will you buy me one?:p:

[timvp]

Lastly you can get a brand new Kia Rio for 7888 right now at world car, so that really fits all of your criteria and its new. Just a thought.Now that you mention it, I do remember hearing that commercial on the radio. Although I'm sure that's the in-the-door price. Wonder what kind of out-the-door price I could get . . .

[timvp]

TimVP, I REALLY want a new Polaris Ranger. They are about 8K. will you buy me one?:p:
Hold on. Let me check that chapter in my Jimcs50 handbook. :smokin

[PM5K]

You can avoid ownership liability issues and still maintain some control over the vehicle by listing yourself as lienholder...require his insurance to notify you of cancellation or non-payment. If he wrecks the car the insurance company pays you instead of him. If he tries to sell the car he has to get a release of lien from you first. The dealership you buy the car from can do all the paperwork for you.

Ding Ding, you win!

I was wondering when someone was going to say that...

[PM5K]

So wait a minute, you are buying a car for a friend AND a relative?

Geesh.....

[ploto]

Definitely lead them to believe they'll need to secure financing for you and 0 down at that... Then drop cash on them once you get to the application part.

Exactly how I bought my last car. I love to act stupid and then stick it to them.

[MannyIsGod]

The only reason I would go through this leinholder business would be if I wanted to make repossessing the car an option. Seems like an unnecessary pain in the ass otherwise.

Congrats on graduating college.

[timvp]

Congrats on graduating college.

:lmao

[ChumpDumper]

Best six years of my life.

[J.T.]

You should have 2Blonde hook you up with one of those LOJACK's she put on her daughter's car, that way if your boy tries to bolt out of town with the car you can track him and call the fuzz.

[SAGambler]

You sign him on as the "owner" and yourself as the "lienholder". That way you are off the hook legally, yet you are the one holding the title until the car is paid in full. The state will send you the original title and send him a duplicate copy. Once the car is paid off, you simply sign the original title off and hand it to him.

[2Blonde]

You should have 2Blonde hook you up with one of those LOJACK's she put on her daughter's car, that way if your boy tries to bolt out of town with the car you can track him and call the fuzz.

Hell Yeah!!!! :tu :lol :tu :lol

[mookie2001]

dam timvp i didnt know yall were so populario

i know yall turned down six figures for spurstalk, but i didnt know yall were buying common marriotts tahoes