Legal Question in Credit and Debt Law in California

This is a common mistake for many people who try to "help" a friend. You are the registered owner of the vehicle. If your friend fails to make payments then you have every right to retake the car - peacefully. If your friend stops paying you are still on th ehook for the payments or risk your credit being damaged.

You can not report the car stolen since you gave "permission" for him to use the car. (Although we have seen cases where rental car companies report cars stolen if they are not returned as set forth on the rental contract).

The problem with repossessing the car is that your friend now has a right to claim an "equity" interest in the car. He has made payments on the car and paid for insurance. A court might order damages if you were to take the car without a court's approval - but then if your friend can not afford payments he may not be able to find a lawyer to take the case.

A bigger concern is your potential liability if your friend is in an accident. Does the insurance cover you in the event of a loss? Is there adequate insurance? Does the finance company know that this is a "straw-man" transaction (i.e. the person whose credit is used to acquire the car is not the one who it was intended for). I have had several recent cases where the finance company repossessed the car when they discvered the straw-man transaction - months and years after the dealer sold the car. The finance company then sells the car, at a loss, and seeks to recover the deficiency from you.

Your position in this case is fraught with potential legal issues. Contact an attorney that knows the ins and outs of this area of law.

Good Luck.