Can I lease my personal car to my brother?

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Can I lease my personal car to my brother?

I just purchased a used car for my brother because his credit is so poor that he could not get a decent loan. He is going to pay the monthly payments. I know that I must license the car but can he obtain insurance in his name on the “leased” car and mitigate my liability in case of an accident?

Asked on September 26, 2011 under Business Law, Missouri

Answers:

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

You can lease your car to your brother, but since you are the registered owner of the vehicle, you will be liable if your brother is at fault in an accident. Your brother will also be liable. Your brother can get insurance in his own name. If your brother is at fault in an accident and the insurance is sufficient to compensate the other party for property damage and/or personal injury, no lawsuit is filed if the case is settled.  If the case is not settled and a lawsuit is filed, both you and your brother would be named as defendants.  You would be named as a defendant since you are the registered owner of the vehicle.  The insurance company will provide an attorney to represent you and your brother at no cost to either of you.


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