Auto Loan Transfers: Are They Really Possible?

Loan Transfers

Are the monthly car payments beginning to stack up? Do you have a friend or family member who could use a vehicle and would be willing to cover the bills until you get back on your feet? Whether you’re a parent who wants to hand over the keys (and payments) to your teen or you’ve taken out an auto loan and are no longer able to stay afloat, there are many reasons for wanting to transfer your auto loan to someone else.

The only problem: directly letting someone else take over your car loan is not an option.

In order to understand why that is, you first need to define what it means to have someone “take over your loan”. If you mean that you’d like to put the title and payments in someone else’s name on the current terms of your auto loan, this is next to impossible – and for good reason. If someone else with a different credit score and different financial circumstances is now the payer, why wouldn’t the lender want to reevaluate the terms of the auto loan according to the new party’s ability to pay? In theory, you could arrange an informal agreement whereby your friend or loved one pays you for the vehicle in exchange for driving it, but doing so exposes you to all sorts of risks – insurance liability, ticket costs, and responsibility for their failed payments, just to name a few.

It may not be possible to let someone take over your loan directly, but it is possible to refinance your auto loan into their name if you each go through a few steps. Here’s what you need to do:

  1. Shop around – Find out which lenders allow refinancing on current auto loans, and which do not. It’s best to do your homework to get the most suitable offer for you. In the same manner, if you have a title loan you can look for lenders who can offer to buy out your loan with better terms.
  2. Apply for a refinance loan – Once you’ve found the best lender to work with you, both parties will need the following documents:

    1. Insurance card
    1. Registration card
    1. Proof of income
    1. Photo ID
    1. VIN, make, and model of the vehicle in question
    1. Odometer reading
    1. Terms and the outstanding balance of your current loan
  1. Go to the DMV – Once you’ve been approved for refinancing, both parties will need to visit the DMV to submit the title, bill of sale, and promissory note, and pay any fees associated with the transaction.
  2. Notify the insurance company – Now that you’re no longer in possession of the vehicle, you’ll want to have your insurance company remove the car from your account.  Similarly, the person acquiring your vehicle will need to notify their insurance to adjust their account accordingly.


While there’s no short way of handing over your auto loan to another party, you can refinance your auto loan into someone else’s name. Doing so requires a good deal of paperwork and communication with your lender, insurance company, and the DMV, but maybe the right choice depending on your financial situation.

As with any transaction, don’t act impulsively. Do your research and explore all possible options, but if you’d like to give the keys and payments to a friend or loved one an auto loan refinance into another party’s name may be the route for you.