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Refinance Your Car into Someone Else’s Name: Is it Possible?

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If you want to transfer a car loan to another person, you also have to transfer ownership. By law, the person who signed an auto loan is the owner of the car. Every time someone is added or removed from a car loan, the title changes to reflect this. While you could refinance your car into someone else’s name, there are easier ways to get rid of your vehicle or lower your payments. Here are several ways to do an auto loan transfer.

The best way to transfer a car loan — Sell it

If someone wants to take over your car loan, they should consider getting a loan in their name and using it to buy the car from you, which pays off your loan. This is best if you want to:

  • Relieve yourself of ownership
  • Remove your responsibility for car payments
  • Have the other person officially own and be responsible for the car

The other person will need to get either a private-party auto loan (an auto loan for when you buy from a person, not a dealership) or a personal loan. Their lender will pay off your lender directly or give the funds to the person, who can transfer the money to you.

By doing this, you are technically selling the car to them. You could try to sell the vehicle for more than what you owe on it and pocket the difference. If you want a full guide on the process, here’s how to sell a car when you still have a loan on it.

How to refinance a car into someone else’s name

It is technically possible to refinance your vehicle into someone else’s name as part of a multistep process, but it takes time and may not work. Here are the steps:

1. Refinance with the new person as a cosigner.

Apply for a loan and the lender will consider the car, how much you owe and both of your credit scores and incomes. If you qualify, both you and the cosigner will sign the loan and the car’s title will be updated with the cosigner’s name in addition to yours.

2. Refinance keeping the cosigner, removing you from the loan

Refinance again to remove your name from the loan and the title. There is no guarantee that the new lender will approve the loan application. They might turn it down if there is not a significant amount of time since the vehicle was last refinanced. Also, they might not make an offer if the only person applying has a low credit score or a low income.

Other options are much easier and quicker.

Other alternatives to do an auto loan transfer

Refinance with a cosigner

Refinance with a cosigner and leave it at that. Doing this could help if your purpose is to:

  • Lower your auto loan payment
  • Help the other person build credit
  • Establish the other person as a co-owner of the car

Refinancing with someone could lower your car payment. You and your new cosigner may qualify for a lower APR and/or an extended loan term. By cosigning, both of you are legally responsible for the payments. On-time payments will positively affect both of your credit scores; late payments will negatively affect them. If possible, don’t extend your car loan for very long. A longer term means you’ll pay more in total interest over the life of the loan. Here’s how to refinance your car in six steps.

Refinance alone

You may be able to refinance your car by yourself. Doing this could help if you’d like to:

  • Lower your car payment
  • Keep your vehicle

You may qualify for a lower APR if you have positive equity in the vehicle (if the vehicle is worth more than what you owe on it). The lender may also offer a lower rate if your credit and income has improved since you first took out the loan.

Trade in your car

You could trade in your car to a dealership if you’d like to:

  • Get an affordable monthly payment
  • Drive off with a vehicle

Almost all dealers accept trade-ins when you buy a new or used car from them. This could be a great option if refinancing isn’t available and you still need a vehicle. If you’re having trouble because you owe more on your car than what it’s worth, here are seven quick ways to get out of an upside-down car loan.

Use your car to make money

Rather than your car costing you money, you could use it to help you make money. The benefits:

  • Keep your vehicle
  • Make payments more easily

The biggest con of doing this is you may have to work more. Still, there are several ways to make passive income with your vehicle, including renting it to others, letting companies put advertisements on it and earning auto insurance discounts.

Auto transfer FAQ

Can you transfer a car loan to someone else?

You cannot “transfer” a car loan to someone else without also transferring ownership of the vehicle to them. In most cases, transferring ownership is considered selling.

Can I refinance my car with the same lender?

This depends on the lender. Some lenders will offer to refinance their own loans, while others will not.

Can you take out a loan in someone else’s name?

No, in general, you cannot take out a loan in someone else’s name. Doing this is fraud. Instead, you could cosign a loan with the other person. In certain cases, you may have a power of attorney for another person and can sign legal documents for them.


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