Your auto payments have been offered to be covered by a relative until you get caught up. Or, you may have a buddy whose credit is horrible but has an excellent salary and a vehicle simply sitting in their garage, begging to be put to better use. In return for allowing him to use the automobile, you wish to permit him to pay his share of the monthly car payment fees.

The Long and Disappointing Truth

Philip Reed, the Senior Consumer Advice Editor at Edmunds.com, says, "in most circumstances, auto loans are not assumable." This information was provided to Credit.com. "It is necessary to notify the lender whenever the registration and title are transferred to a new owner," said the new owner. After that, the lender will step in and demand a credit check to ensure that the new owner can keep up with the payments on the mortgage. This ultimately results at the beginning of a new loan at the credit level of the new owner.

Allowing Them to Drive It, Too

It is one thing to agree to let a friend or family member cover your bills for a few months while you get back on your feet; this is likely something that can be accomplished without too much difficulty. However, what if you're interested in having someone else drive your car in addition to yourself? You are not the sole owner of the vehicle; therefore, you will need to get your lender's permission before selling your car, even if you were to sell your vehicle to the other person, instead of simply agreeing to let them drive the car and cover the payments on the loan.

Can't You Ignore the Bank and Go Rogue?

Alternatively, you could say that you'll let them drive the car if they agree to pay you regularly, and you'll say that you'll let them go of the vehicle. But what if they don't pay up when they're supposed to? In effect, you will act as a repo man for your car, but without the backing of any legal authority.

Read the Fine Print of the Loan

Before you ever sit across the table from a tough banker or loan adviser, you must prepare as much information as possible. Read the terms and conditions of your loan. Reread it. Consider getting the opinion of a reputable attorney who focuses on contract law. It may be simpler for you to sell your automobile or trade it in for a less expensive vehicle and change the loan to make the payments more reasonable.

Find Out the Potential New Lessee's Credit Score

Before making contact with your financial institution, you need to understand the circumstances surrounding your situation. There is a good reason why a credit score is the most important factor that banks and other financial institutions consider when determining someone's financial risk and creditworthiness: this is the most effective tool that they have available to determine the likelihood that they will ever get the money that they loaned to the other person back. If the new prospective lessee has poor credit, it won't be easy to convince your bank to approve the lease agreement.

Contact Your Lender

Before anything further can take place, the individual whose name is presently on the auto loan has to get in touch with their bank or another financial institution of their choosing. Inquire about the procedures for transferring a vehicle loan. At this point, most banks will inform you that doing so violates the contract you signed with them. If this is the case, talk to the interested party about the possibility of refinancing the car loan in their name.

Wait for Loan Approval

You may be able to submit an application for loan approval with your bank or with one of the other lenders out there. That might take a few minutes to a few weeks, depending on how long you have to wait in the lobby.

Sign the Papers!

You will be required to sign many documents if the loan takeover agreement you submitted is accepted. In most circumstances, this will also contain the necessary paperwork to sign over the lien and the title to the vehicle. In addition to this, you will need to take the car off of your personal auto insurance coverage. It is possible that you may want help with title and registration transfer policies and will need to get in touch with the DMV.