What are the potential problems if a friend wants to buy a car and put the title in my name to avoid having to give up ownership in a divorce?

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What are the potential problems if a friend wants to buy a car and put the title in my name to avoid having to give up ownership in a divorce?

Here are the specifics of the agreement: he will pay cash for the car; he will place a lien on the title to protect his position; he will pay for the car insurance; and aI won’t be using the car at all. What are the potential liability issues? Should he buy any other type of insurance or is regular car insurance good enough? Any other problems to consider? I would do this for him but I don’t want to get myself into more problems than it’s worth.

Asked on March 31, 2016 under Accident Law, Virginia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

1) If the car is titled in your name, *you* are the legal owner: therefore, if he (or anyone he lets drive) gets into an accident, *you* can be sued; and if the insurance isn't enough to fully cover or coverage is disallowed, *you* will have to pay any judgment or award. In this regard, note that an accident while DUI is generally not covered  by insurance.
2) If the insurance doesn't list him as the primary driver but your name is signed to it, then a) you will be committing insurance fraud; and b) the insurer could, because of the failure to properly disclose, decline coverage.
3) If the wife or her attorney finds out about this, they may sue you, for helping him commit fraud in his divorce. 
Don't do this. Let him buy an incredibly cheap junker in his own name and use that, so that if she gets it in the divorce, it's not a big deal--that's a much safer way for him to go.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

1) If the car is titled in your name, *you* are the legal owner: therefore, if he (or anyone he lets drive) gets into an accident, *you* can be sued; and if the insurance isn't enough to fully cover or coverage is disallowed, *you* will have to pay any judgment or award. In this regard, note that an accident while DUI is generally not covered  by insurance.
2) If the insurance doesn't list him as the primary driver but your name is signed to it, then a) you will be committing insurance fraud; and b) the insurer could, because of the failure to properly disclose, decline coverage.
3) If the wife or her attorney finds out about this, they may sue you, for helping him commit fraud in his divorce. 
Don't do this. Let him buy an incredibly cheap junker in his own name and use that, so that if she gets it in the divorce, it's not a big deal--that's a much safer way for him to go.


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