Two important documents to keep in mind for your car are loan papers and sovereign papers. The loan reflects the debt on the car and it can have multiple parties in its name. The title reflects ownership of the car and multiple parties can also be listed here. The names on the two documents don’t necessarily match. If two people borrow to buy a car, the car still belongs to the person in the name of the title of sovereignty.
General car loan
With a shared car loan, more than one person is responsible for repaying that car to the lender. For example, you and your spouse or parents can both be listed in a shared car loan. If the debt is not repaid, both parties will be held accountable for the consequences. However, the car loan does not reflect the actual ownership of the car.
Owning the same means
Common ownership is determined by the name on the title for the vehicle and two names may be on the vehicle registration paper. When you purchase a vehicle from the dealer, the parties wishing to be named must be present to sign the title. The title will then be filed with the Department of Motor Vehicles to the state where the owner lives, and only those listed on the sovereign paper will have the right to own the vehicle under the law. Typically, a lender will be listed on the sovereign paper if the debt has not been repaid, as the lender has the right to hold the car while the debt is unpaid.
Verifying car ownership
Check your title to verify who is entitled to the car. You should have a copy of your title in the profile and you can have the original.
Each state handles this process differently. Some states allow lenders to keep your ownership until you repay the debt. In other states, the lender will provide documents to you immediately. If you’re not sure who has your title, check with the DMV in your state. The DMV will have a record of your vehicle title as long as your vehicle is legally registered.
Transfer of ownership of the car
It is possible that the two are listed on the car loan and on the sovereign paper. In this case, it is not clear who owns the vehicle if there is a dispute. You can take this matter to court and the judge can seek to verify who actually paid, who used the vehicle as the main vehicle and other factors. However, in the end, if the two parties are listed on ownership papers, then both parties share ownership of the vehicle.
To remove one party from ownership, the individual will have to sign the transfer paper to the other. In doing so, it is also advisable to remove this person’s name from the loan by refinancing the loan to a borrower.