No, a co-borrower cannot unilaterally take possession of the car unless their name is also on the vehicle's title. Being a co-borrower means you are equally responsible for repaying the auto loan, but it does not automatically grant you ownership rights or the right to take the vehicle. The name(s) on the title determine legal ownership. If only one person is listed, they are the sole legal owner, and the co-borrower's rights are primarily financial.
The critical distinction lies between financial obligation and legal ownership. When you apply for a loan as co-borrowers, the lender evaluates the combined creditworthiness of both parties. Both of your credit histories are impacted by the loan, and both are legally bound to ensure the payments are made. However, the title is a separate document issued by the state's Department of Motor Vehicles (DMV). The lender will only place the names of the individuals who are intended to be the owners on the title application.
If the relationship between the co-borrower and the title holder sours, the co-borrower is in a difficult position. You are financially liable for an asset you have no legal right to possess. If the primary title holder stops making payments, the lender will repossess the car, severely damaging your credit score as well. Conversely, if the title holder sells the car without your knowledge, you are still obligated to pay off the remaining loan balance.
To avoid this situation, it's crucial to be named as a co-owner on the title at the time of purchase. If you are already in this predicament, your options are limited. You may need to seek a legal remedy, such as suing the title holder for your financial contributions, but you cannot simply take the car. The best course of action is always clear communication and a formal agreement before entering into a co-borrowing arrangement.
| Scenario | Co-Borrower's Right to Possession? | Key Reason | Potential Risk for Co-Borrower |
|---|
| Name on Title & Loan | Yes, equal rights | Legal owner and financially responsible | Disagreements with other owner(s) over use/sale. |
| Name on Loan ONLY | No | Not the legal owner; title holder has sole possession rights. | Liable for loan payments on an asset you cannot control or sell. |
| Name on Title ONLY | Yes (You are the sole owner) | You are the legal owner. | If someone else is a co-borrower, they are not liable for the debt if you default. |
| Primary Borrower Defaults | No (unless also on title) | Lender repossesses the asset (the car). | Your credit score is damaged alongside the primary borrower's. |
| Verbal Agreement to Share | No | A verbal agreement is not legally binding for vehicle possession. | Difficult to prove your financial stake in court without written proof. |
