Q: I drive a car that I make payments on but is financed in someone else’s name. The payments are very high so I want to get into something less expensive. Can that person who owns the car trade it in on something that is financed in my name? Or would they have to be on the new loan as well?
A: Yes, you can buy a vehicle in your name, however, the vehicle that you have been paying for that is someone else’s name cannot be use to give you a tax credit for its value since it is not in your name. You are also not getting any credit history benefit for paying it on time. If you include the owner of the vehicle that you have been driving, then you could receive a tax credit for its value.
Buying another vehicle and trading in a vehicle that is not in your name can be done only if the dealer buys the trade-in on the side (pay-off on the vehicle needs to be negotiated on the side as well).
Buying another vehicle with the owner of the vehicle that you have been driving, and using the vehicle as trade-in is probably the easiest. You will receive a tax credit for the value of the trade-in and the pay-off amount can easily be added to the new loan.
Agustin Vasquez, Jr. – General Manager, Mack Massey Chrysler Jeep Dodge, El Paso, Texas