What could happen if loan someone my car in return for car payments?

What could happen if loan someone my car in return for car payments?
I have a friend who can't get a parent to co-sign for a loan – so he offered to send me $ for car payments and have full coverage auto insurance. He would in theory keep giving me payments until my bank releases the title to me and at that point i would sign it over to him. If the vehicle is still registered to me with the title belonging to my bank then whats the worst that can happen? (How will things like traffic violations relate back to me?) Does this sound like a really dumb idea???

This is a bad idea. If something happens and there is a lawsuit, you are the legal owner of the car and will be legally liable for damages. Insurance has limits, and you would be liable for any claims above those limits.

You would also be liable for any parking violations, speed camera or red light camera tickets.

If he does not pay, you will have to make the payments yourself. If you are planning on buying another car, it is going to be hard fo you to be financed with an outstanding car loan.

You are taking all the risk, and he is getting the benefits. This is not a good idea.

Yes, it is a really dumb idea. You don't really own the vehicle. The lender does. You would violate your contract with them. What if your friend decides he doesn't want to make the payments and skips town? Don't laugh – it's happened before. Who do you think the bank is going to come after? Not your friend, they don't have a contract with him. They will come after you. What if they try to repossess the vehicle and they can't recover it because you don't know where it is? You are putting your credit rating at risk here.

nice gesture, dumb idea. you will be held liable for all traffic violations or anything else that your friend does with the car.

Of course it's a really dumb idea.

You are essentially putting your credit score and your most valuable asset in the hands of someone else. I don't know what kind of car this is or what it's worth (and it really doesn't matter) but if you can't afford to hand him cash equal to the value of the car, then you have no business handing him an asset as valuable as your vehicle.

OK, say he abuses the car, destroys it in a series of small accidents, then one day decides he doesn't feel like driving it anymore and brings it back to you. Refusing to pay any more payments.

Or he gets into an accident and totals the car, it's still in your name. Who's loss is it, his or yours? That one is on you too.

Tell me how is he going to get full coverage insurance on a car that isn't registered in his name and he doesn't have a loan in his name for? Ain't gonna happen. Insurance companies aren't that stupid to write a policy for a car that's not in his name.

it's not a bad idea–it's a really, really bad idea.
1. if they have a wreck you can get sued
2. if they wreck the vehicle you still have to pay for it
3. if the damage the vehicle you have to fix it

all of the above because you have no leverage to force them to do any of the things listed. they can just walk away, and you're left with the peices. even if you officially let them take over the loan, the finance company can come to you for ony monies owed by the person who takes over the loan-cause the finance company will have a clause in the paperwork that allows them to come after you if the buyer defaults.

most of the problems with this idea have already been identified by others, although some of the problems they fret over are incorrect.

Base line though – people have bad credit 99% of the time, because they are bad people – few exceptions: medical, some divorse, some business failures. If his parents dont trust him enough to co-sign, that should be a screaming red flag. If you loan this guy $ 5 for lunch, you're not going to see that $ 5 again, or be able to borrow it from him at some future time, and he's not really likely to even appreciate it.

if you do this, i guarantee – you WILL regret it later

There have been many horror stories on this answer board from people who have done what you are doing. There are so many things that can go wrong, there is not enough time to list them. Here's just one: your friend wrecks your car and stops making payments, and demands repayment for the payments he's made. Here's another: your friend causes an accident and kills some people. The car's owner (you) are sued for millions of dollars. Your friend goes to jail. You too might be implicated.

DON"T DO IT.