Is the co-signer of an auto loan liable for any damages in the event of an accident?

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Is the co-signer of an auto loan liable for any damages in the event of an accident?

My spouse co-signed for an auto loan for her son. He is the only one listed on the memorandum of title and on the auto insurance policy. Also, his license is currently under full suspension. If he would be driving the auto (illegally of course) and would be involved in an accident, whether it’s his fault or not, would my spouse be liable for any actions that could be brought against him?

Asked on July 15, 2011 under Accident Law, Ohio

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

For a more definitive answer, have the loan documents, insurance, title, etc. examined by an attorney, who can look into all the specifics of this particular case. As a general matter, co-signing a car loan does not make one responsible for tort (accident) liability; the owner(s) of a car are potentially liable, as are any driver at the time of the accident, but cosigning a loan, without more, does not make one an owner or make one liable except as to the loan itself.

You should get an attorney's opinion, however, to be sure--your spouse's son is liability waiting to happen. Driving illegally, he would void or give up his right to insurance coverage; if he's in an accident, therefore, there's no insurance to pay the bills. You want to make sure that your spouse is in no way implicated in what could be tens or hundreds of thousands of dollars of liability.


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