Vehicle Ownership When Multiple People Are on a Car Loan: Understanding Title and Loan

Two important documents to be aware of with your car are the loan and the title. The loan reflects the debt on the vehicle, and it can have multiple parties named. The title reflects ownership of the vehicle, and multiple parties may also be listed here. The names on the two documents do not necessarily have to match. If two people are on a car loan, the car still belongs to the person who is named on the title.

Joint Auto Loan

With a joint auto loan, more than one person is responsible for repaying the lender the debt for the vehicle. For example, you and a spouse or parent may both be listed on a joint auto loan. If the debt goes unpaid, both parties will be responsible for the consequences. The auto loan in no way reflects ownership of the actual vehicle, however.

Joint Vehicle Ownership

Joint ownership is determined by the names on the title for the vehicle, and two names can be on the car registration. When you purchase a vehicle from a dealer, the parties wishing to be on the title should be present to sign the title. The title is then filed with the Department of Motor Vehicles for the state where the owners live, and only those parties listed on the title have a claim to ownership of the vehicle by law. Often, a lender will be listed on the title if the debt is not yet paid, since the lender has a lien on the vehicle while the debt is outstanding.

Car Title Verification

Check your title to verify who is entitled to have a vehicle. You should have a copy of your title in your records, and you may have the original.

Each state deals with this process differently. Some states allow a lender to hold your title until you have repaid the debt. In other states, the lender will provide you with the document immediately. If you are unsure who has your title, check with the DMV in your state. The DMV will have a record of your vehicle's title as long as your vehicle is legally registered.

Car Title Transfers

It is possible two people are listed on the car loan and on the title. In this case, it is not clear who is entitled to have the vehicle if there is a dispute. You can take this issue to court, and a judge may seek to verify who actually made payments, who used the car as a primary vehicle, and other factors. However, ultimately, if two parties are listed on the ownership document, both parties share ownership of the vehicle.

In order to remove a party from ownership, that individual would have to sign over the transfer to the other party. In doing so, it also is advisable to remove this person's name from the loan by refinancing to a single-borrower loan.