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Can a Car Loan Be Transferred to Someone Else?

The quick and simple answer is no, you can’t transfer a car loan to another person. The original borrower must pay off their loan. This is in contrast to leases, which can be more readily to transfer into a third-party’s name.

Two Alternatives for Transferring a Car Loan

There are two solutions to getting out from under the loan and getting a vehicle into another person’s name. The first is to allow someone else to make the payments on the loan, but leave it under the original borrower’s (your) credit. However, this is very unwise, because no one can guarantee that the loan payments will actually be made. That leaves you open to having your credit destroyed by someone else.

The better option is for the other person to get a loan of their own, then pay you for the vehicle. You pay off your own loan, then transfer ownership and responsibility at the same time. This allows the new owner to build their credit score without endangering yours.  After all, they are now obligated to pay back their own lender, not yours. This option is better, but the new owner will most probably need a personal loan, private party auto loan, or savings account-backed loan.  These types of loan can be tougher to get, and may require slightly higher interest rates and stricter credit requirements.

Credit Considerations for the New Buyer

Even if you have poor credit, there are lenders willing to work with you. Depending on how low your credit score is, you may have to spend some time searching for the right lender. Start local with banks and credit unions. If that doesn’t work, expand your search to include the internet. There are many reliable lenders who specialize in bad credit auto loans, but may not have a brick and mortar location near you. A little research could get you into the car that you need.

About the Author

The author has many years of experience in automotive finance and insurance. However, each consumer's situation is unique. It is best to contact a finance specialist for further assistance.
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