From time to time, situations may occur where it is advantageous to add someone to the title to your car — rather than signing it over to them outright. However, before you do, you need to seriously consider the ramifications of taking that action.
As a co-owner, that person can make decisions about the car, in some cases without your agreement or consent. You are, quite literally setting yourself up to one day potentially hear something like: “Oh, by the way, I sold the car yesterday, here are 20 bucks.”
Sound far-fetched? Well, it’s very possible. After all, among the rights of ownership is conferred the right of disposition.
So, make sure the person you’re adding to the title of the vehicle has a very firm understanding of the nature of the situation and they are someone you can trust. In fact, it might even be a good idea to write an agreement detailing that individual’s rights and responsibilities for both of you to sign.
However, before you even get that far, the other thing you need to consider is whether there is a loan against the vehicle and what the laws are in your particular state. Depending on where you live (most of the 50 states), if there is an outstanding loan on the vehicle in question, you must first get the permission of the lending institution to add another name to the title. After all, whoever gave you the loan really owns the car; you’re just driving it. So they hold the title.
However, it’s a bit different if you live in one of the Title Holding States.
In these states, the bank is listed as the legal owner of the vehicle and you’re listed as the registered owner. In this situation, you’ll need to get permission from the lending institution to effect any changes to the title document. This means they also get to approve or disapprove your request to add an additional name to the title. After all, if something happens to you they’ll want to know that person can pay off the loan.
In most cases, you notify the DMV you wish to add another name to the title and the DMV contacts the lender with your request. If the lender approves, you then go to the DMV and effect the rest of the process. In some cases, you can contact your lender directly and have them issue a form granting you permission to do the add. This varies state by state, so it’s best to contact your DMV to find out which way it’s handled where you live.
Once the changes are made, the title goes back to the lender until the loan is paid off.
If the automobile is owned free and clear, or if you live in a Title Holding State, on the reverse side of the title document (also known as the “pink slip”), you’ll find the form you need to make changes to the title. There are different sections to fill in if you sell it, or if want to add another person to it, or you no longer wish to own the vehicle for whatever reason.
Bear in mind, the registration card and the title document are two completely different things. The registration card you keep in the car to prove all of your current registration fees are paid. The title document is a legal form delineating ownership of the vehicle. This, you’ll want to keep in a safe well-guarded place, as it is your most ready method of proving you legally have rights where the vehicle is concerned. Also, it is possible for another individual to claim ownership of your vehicle with this document.
Fill in the appropriate information to add someone to the car title, make an appointment with your local DMV, and take the form there to submit the changes. Do not sign the document until you are physically at the DMV and about to make the change. This way, if you change your mind, nobody can get their hands on the title document and do it without your knowledge. Make sure the person you’re adding signs the document as well.
Most DMVs charge a fee for the change, so when you call for the appointment, find out how much that fee will be so you can be prepared to pay it.
Make sure the person you add is insured, even if they’re not going to be driving the vehicle. They must be added to the policy covering the car in question. Both parties’ names must be on the insurance card as well.
It is important to note, by adding their name to the title that person also becomes responsible for any legal actions that may arise as a result of the use of the vehicle — or any other aspect of the existence of the vehicle.