Various Problems - Posted by Sean

Posted by Sean on April 19, 2000 at 09:02:21:

…I should transfer the vehicle into a limited liability company.

Various Problems - Posted by Sean

Posted by Sean on April 18, 2000 at 20:28:40:

Ok I realize that this may be completely out in left field for a lot of people, and I admit I’ve never done anything like this before but the yield tempted me something fierce.

I purchased a car for a friend who has extremely poor credit as the aftermath of a divorce. I have loaned her money before and she pays on time. My payments on the vehicle are $456.89 and she pays me $500 for a monthly cash flow of $43.11. I have $200 cash into the deal so my yield is acceptable.

Unfortunately we’ve hit a few snags. There is no vehicle AITD equivalent (I’m in California). When she went to obtain insurance on the vehicle they wanted me to call in and do it because my name was on the title.

Plus to resell the vehicle to her will inflict a sales tax on her so I’m toying with the idea of considering it a 99-year lease or something to avoid the sales tax problem. There are no forms available to lease a vehicle unless you own it free-and-clear in this state.

Perhaps I should xfer it into a trust or something? I’m scratching my head at this one and unsure how to proceed. I did manage to find an insurance company that will have me sign the insurance form and exclude me as a driver (go free market) giving her a pretty good rate.

If anyone has any ideas at all, post 'em. Thanks.

See the “Repo” posts on newsgroup one… - Posted by Ben (NJ)

Posted by Ben (NJ) on April 19, 2000 at 20:43:47:

I tried this good deed too, do you realize that every payment your friend misses will result in a black mark on your credit report? I learned the hard way that sometimes those who have bad credit have it for a reason. Past performance DOES indicate future results.

Re: Various Problems - Posted by Tony-VA

Posted by Tony-VA on April 19, 2000 at 06:53:32:

It would seem to me that you are taking on a heck of a lot of liability for a $43.11 cashflow. With your name on title, you are likely to be caught up in any civil litigation resulting from an accident. Sure insurance may cover this but why get yourself wrapped up in this mess just to save her the sales tax?

Not to mention if the insurance company were ever to deny a claim for reasons such as DWI accident, you could well end up being the “deep pockets” since your friend does not appear to have any assets worth pursuing by the injured party’s attorney. Car accidents are far too common to leave yourself exposed to these risks in my opinion.

Just my 2 cents,


Thanks - Posted by Sean

Posted by Sean on April 20, 2000 at 07:50:55:

Thanks for your concerns, but there’s no way that her missing a payment will result in a black mark on my credit because I will be making my payment faithfully every month whether she makes hers or not.