How To Get Your Name Off A Joint Auto Loan - The Car Connection

October 26, 2023

A joint auto loan is one where two co-borrowers own a vehicle together and share the responsibility of paying for a car loan. You both apply together and the lender combines your incomes to qualify you for financing. However, some situations can arise which may leave you wanting to remove your name from a joint auto loan. Here's what we know about getting your name off a joint car loan.

Removing Your Name From A Joint Auto Loan

Common reasons someone may want their name off a joint car loan include divorce, separation, or the other borrower not holding up on their end of the deal.

Each of these situations could be hurting both of your credit scores. If there’s bad blood between you and the co-borrower, and someone stops paying because of it, your credit scores could really suffer unless the situation is resolved. In joint auto loans, both parties' credit scores are affected by the loan, both positively and negatively depending on how the loan is treated.

Pay off the loan

If you can pay off the remaining balance, then you end the loan and the obligation to the loan contract. Once the loan is paid off, both names still remain on the vehicle title, though. If you want your name off the vehicle’s title once the loan is paid off, then you can simply sign the title over to the person keeping the car. The borrower keeping the vehicle can head to the Department of Motor Vehicles or the Secretary of State to apply for a new title without your name on it.

Refinance

If one co-borrower wants to keep the car and one wants their name removed from the loan, they can try to qualify for refinancing. Refinancing is replacing the current auto loan with another one. Because refinancing means creating a whole new loan for the vehicle, one party can remove their name and make the other person the sole borrower. Most borrowers look for another lender to refinance with, but you may be able to refinance with the same lender that you both originally took the loan out with if you qualify.

Sell the car

If neither of you wants to keep the vehicle, it can be as easy as selling the car privately or trading it into a dealership, having both of you sign the title, and removing the lien from it. Remember that you can’t sell a vehicle that still has a loan on it until the lien is removed. Removing the lien means paying off your entire loan balance. If you can sell the vehicle for what you owe on the loan (or hopefully more), the payoff amount goes to the lender, who removes the lien and you both can take your names off the title and relinquish ownership.

Since a joint auto loan means two borrowers have equal rights to the vehicle, this also means that both borrowers must agree to the sale or refinancing of that car. If one of you tries to sell or refinance the vehicle without the other’s permission, then the borrower that was left out could pursue legal action against the other.

If you do decide to sell, it’s very likely that both of you need to be present for the sale to sign the title over to the next owner as well.

Cosigners On Auto Loans

If you are a cosigner on someone else’s auto loan or have a cosigner on your loan, it’s not considered a joint car loan. When you cosign for someone, they’re the primary borrower who's fully responsible for repaying the loan. A cosigner just helps act as a backup payer and someone who lends their good credit toward loan approval.

If the primary borrower sells the vehicle, both of your names are removed from the loan contract.

Primary borrowers can also try to qualify for refinancing to remove their cosigner. If you’re a cosigner and you want your name off the loan, have a talk with the primary borrower about your concerns. Remember that both co-borrower and cosigner situations affect both of your credit scores, so communication is key, no matter who wants out of their responsibilities on the loan.