Legal Question in Credit and Debt Law in Tennessee
Can Co-signer ''take back'' auto when no default
Recently my boyfriend co-signed on an auto loan for my 18 year old daughter in an attempt to start her adult life with a new car and a chance at establishing decent credit. Before the first payment has even been made, my boyfriend has ''changed his mind'' and now is demanding that we return the car to him and he will then sell it/return it at a loss/whatever.
Does he have the legal right to demand the car back? While I understand co-signing probably gives him co-ownership of the car, does it give him a majority ownership status?
2 Answers from Attorneys
Re: Can Co-signer ''take back'' auto when no default
First piece of advice, get rid of the boyfriend. Now for your legal question: a co-signor on a loan acts as a surety for payment in case the principal defaults. A co-signor does not take an ownership interest in the car. He cannot boss you or your daughter around or make her surrender the car to him. The most he can do is petition the bank to have his name removed as a co-signor, but I doubt if the bank will let him off the hook.
If he wanted some guarantees, your boyfriend should have obtained those guarantees before he co-signed the loan.
Re: Can Co-signer ''take back'' auto when no default
The answer will depend on the written agreement he signed. Generally, simply co-signing on a car note will not give him a right to possession of the vehicle. You may want to take the actual note to an attorney and sit down with her to go through it and determine exactly what your daughter's legal rights are.
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