How to Make an Agreement on Taking Over Car Payments

Typically, it is best if the person purchasing your car obtains his own financing for the vehicle. However, if the buyer cannot qualify for a loan and you still wish to sell him the car, you can work out an arrangement where he takes over your car payments and the loan remains in your name. Written documentation of the agreement is essential to your legal protection if the car is in an accident. However, you remain liable to your lender for the balance owed if the buyer does not make his payments.

Instructions

1

Contact your lender to make sure that you can allow someone to take over your payments. If your lender forbids this, the purchaser must make his own arrangements to finance the car.

2

Make a copy of the purchaser's identification to reference when making the contract.

3

Include both of your names at the top of the contract and write your addresses. Explain the details of your agreement. For example, include the payment terms and that you will transfer the title to the car to the buyer after he pays the balance owed on the loan. Payment terms should include the amount required monthly and whether the purchaser is to send the payment to you or the lender.

4

List the repercussions to the buyer if he does not fulfill the terms of the agreement and who is responsible for repairs and insurance coverage. Since the loan is remaining in your name, you must retain insurance coverage for yourself and add the purchaser as a driver of the car. State in the contract that the purchaser is responsible for premiums and will receive any amount over the balance in the event of an insurance payoff.

5

Ask a notary public to witness both signatures and attach her seal to the agreement.