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Can I repo a car if I co-signed the auto loan?

Tara Baukus Mello
Tara Baukus Mello

Dear Driving for Dollars,
My wife and I co-signed a car loan for her brother, who has a stable job but isn't the most reliable dude. It's been about a year, and he has been delinquent on every single payment, with the bank threatening to repossess the car several times.

Each time, he has made the payments, but he is totally messing up our credit and doesn't seem to care. I want to go and take the truck from him, and turn it in ourselves to rid us of the liability.
-- Joey

Dear Joey,
Oh, boy. It sounds like you've learned the hard way why some people can't get car loans on their own. Your options depend largely on whether you or your wife's name is on the title of the car.

If your name is on the title, then you are a co-owner of the car and you have more rights. If you or your wife's name is not on the title, then you have agreed to be responsible for a car loan without any ownership of the car itself.

If your name is on the title, you may be able to effectively repossess it from your brother-in-law. Contact an attorney to find out what the options are in your state. Even if you take the car, you probably don't want to turn it in, since a voluntary repossession is treated almost the same as a repossession, and you will experience the same damage to your credit.

Your best option may be to get your brother-in-law to sign over full ownership of the car to you and have his name removed from the title and the loan, but you'll need to talk to the lender about this. If you want to let him continue to drive the car, have him make payments directly to you. This saves your credit if he is late on payments, gives you a much better leg to stand on legally if you want to take the car from him or if you choose to sell the car. While this method still leaves you obligated for the auto loan, this gives you a lot more options without further damaging your credit.

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If you have a car question, email it to us at Driving for Dollars. Read more Driving for Dollars columns and Bankrate auto stories. Follow her on Facebook here or on Twitter @SheDrives.

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