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Can Someone Take Over My Car Loan? Your Questions Answered

Can Someone Take Over My Car Loan? Your Questions Answered

Picture the scene. You recently bought a brand new car and then promptly lost your job during the pandemic. You haven’t missed a payment yet but it is likely to happen soon. A relative offers to take over the loan to help you out until you find work. Can you do it?


This is a situation one of our Freelton car loan customers found themselves in recently and we imagine they are not alone.


So, can someone else take on your car loan?

Handing off a Freelton car loan to someone else


The short answer is no, not usually. Car loans are contracts between you and the lender and are not usually negotiable. It’s all down to titles, contracts and legal stuff but the end result is that you cannot usually hand your car loan to someone else.


Some lenders will allow it so it is always worth asking. In our experience, few will agree though.


Everything is not lost, as you may have other options.


The faster you move, the more options you’ll have. As long as you take action before you miss a payment, you have other means of working things out.


Work with your lender


If you contact the lender before you miss a payment, you may be able to work something out with them. They may have options they can use to help you until you get back to work.


The important thing here is to contact them before you miss a payment. They will respond in kind and be much more willing to work with you than they will be after you miss a payment!


Take a payment holiday


Payment holidays aren’t just for COVID. They are usually an option on car loans. You will need to agree a period with the lender ahead of time and justify why you need the break. Payment holidays are usually between 3-6 months and can be enough to help you out of a situation.


You will still accrue interest during the holiday and you may even have to pay interest during that period. The rest of the payments will be added to the end of the loan term.


Sell the car


While not ideal, you could sell the car. Depending on your situation and whether you have another car or not, you could sell the car to settle the loan.


If you have lots of equity in the car, you could sell it, pay off the loan and buy a cheap runabout to see you through. If you have another car in the family, you could use that to get around instead.


Refinance the loan


Refinancing a Freelton car loan when unemployed isn’t always easy. It would work better if a partner or family member could co-sign it with you.


Different lenders approach these situations in different ways. If you have a good credit score and lots of equity, you stand a higher chance of refinancing. If your co-signer also has good credit, there should be no problem.


If you find yourself in a difficult situation, the very best thing you can do is discuss it with your lender. They want you to succeed too so will usually work with you to work something out.


As long as you talk to them before missing a payment, they will be much more disposed to helping you out than after!


Contact Unique Chrysler for help, advice and competitive Freelton car finance and leasing.


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Categories: Auto Loan

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