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rollrsk8ter · Mar 10, 2009, 04:47 AM

My daughter (18) needed a car, her ex-friend's husband left his job and moved out. Both husband and wife had a loan for the car. My daughter was unable to get a loan (no established credit) to get her own loan to buy the car with cash. So the bank created a contract that my daughter would pay 173 a month to the friend to take over the car payments and received title once it was paid off. My daughter has since carried insurance, but registration was still in the friend's name, but friend let it expire in January. The car was repossed by the bank because they sent mail to the friend explaining that were notified that they no longer had insurance and per bank rules and their agreement with the bank, they must insure the car (they could then list my daughter as a driver). The friend never notified my daughter about the bank contacting her about the insurance problem and never satisifed the bank's demand to insure the car.
My daughter is willing to take the $800 she paid so far for the car as a life lesson and go out and get another car. So is the contract she and the friend signed null and void because the friend did not satisfy the bank requirements and got the car repossed?

Thanks in advance... Jim

rollrsk8ter · Mar 10, 2009, 05:04 AM

Oh Yeah... This is in North Carolina. The contract doesn't state anything about insurance, registration, or anything about defaults, or anything. Just states she will pay $173 until its paid off, then will receive title.

this8384 · Mar 10, 2009, 07:23 AM

Maybe your state has veeeery different laws, but I don't think you're getting the truth. I've never seen a bank/lending company repossess a vehicle just because the owner let the insurance lapse. Usually they'll send a notice stating that if you don't provide proof of insurance by a certain date, then they'll provide it and will add X amount of dollars to your loan. It sounds to me like the friend quit paying on the loan and has been pocketing the $173.

Have you seen the document that your daughter signed? Is it actually from the bank or is it something her friend drafted and told her it was from the bank?

My guess is that what it really boils down to is whose name is on the loan for the car. Usually the bank will resell the vehicle in an attempt to recover their loss; whoever originally had the car will be liable to pay the balance between what they owed and what the car sold for.

rollrsk8ter · Mar 10, 2009, 09:44 AM

Originally Posted by this8384

Maybe your state has veeeery different laws, but I don't think you're getting the truth. I've never seen a bank/lending company repossess a vehicle just because the owner let the insurance lapse. Usually they'll send a notice stating that if you don't provide proof of insurance by a certain date, then they'll provide it and will add X amount of dollars to your loan. It sounds to me like the friend quit paying on the loan and has been pocketing the $173.

Have you seen the document that your daughter signed? Is it actually from the bank or is it something her friend drafted and told her it was from the bank?

My guess is that what it really boils down to is whose name is on the loan for the car. Usually the bank will resell the vehicle in an attempt to recover their loss; whoever originally had the car will be liable to pay the balance between what they owed and what the car sold for.

Yes, I have the letter address to the other party in front of my eyes. "We recentl received notification that your vehicle insurance policy is not insured under your names. The (insert bank name here) requires the individuals listed on the vehicle title must be insured even if you are not driving the vehicle. Please provide us with written notification that full coverage is in force by February 20, 2009 to avoid immediate repossession.

this8384 · Mar 10, 2009, 09:46 AM

So whose name(s) are on the title and/or loan at this point?

JudyKayTee · Mar 10, 2009, 09:47 AM

Originally Posted by rollrsk8ter

Yes, I have the letter address to the other party in front of my eyes. "We recentl received notification that your vehicle insurance policy is not insured under your names. The (insert bank name here) requires the individuals listed on the vehicle title must be insured even if you are not driving the vehicle. Please provide us with written notification that full coverage is in force by February 20, 2009 to avoid immediate repossession.

I'm amazed - I've never seen this. I have seen the bank obtain insurance and then charge the vehicle's owner.

Is this a bank or some type of pay to own or something else?

rollrsk8ter · Mar 10, 2009, 10:12 AM

It's a State Employee Credit Union.

rollrsk8ter · Mar 10, 2009, 10:14 AM

The title and loan has this 3rd party on it. My daughter has a written contract with the 3rd party to buy the car. But the bank repossed it because the 3rd party did not keep full coverage on it. Is the written contract between my daughter and the 3rd party void now that the 3rd party failed to meet the credit unions requirements and they took the car?

this8384 · Mar 10, 2009, 10:20 AM

You're confusing your terms. Your daughter is the 3rd party here; the friend is the original debtor.

Obviously, the friend cannot demand payment for goods that your daughter hasn't received. Your daughter may even be able to sue the friend in small claims for the money she put towards the vehicle.

One other thing I thought of: if the friend no longer had possession of the vehicle, how did the lender know where to find it in order to repossess it?

JudyKayTee · Mar 10, 2009, 10:37 AM

Originally Posted by rollrsk8ter

The title and loan has this 3rd party on it. My daughter has a written contract with the 3rd party to buy the car. But the bank repossed it because the 3rd party did not keep full coverage on it. Is the written contract between my daughter and the 3rd party void now that the 3rd party failed to meet the credit unions requirements and they took the car?

I think you're confusing the parties here - who do you think the third party is? The people who originally got the loan?

Or was the loan sold?

This is difficult to answer because I can't get a clear picture of what happened.

JudyKayTee · Mar 10, 2009, 10:38 AM

Originally Posted by this8384

You're confusing your terms. Your daughter is the 3rd party here; the friend is the original debtor.

Obviously, the friend cannot demand payment for goods that your daughter hasn't received. Your daughter may even be able to sue the friend in small claims for the money she put towards the vehicle.

One other thing I thought of: if the friend no longer had possession of the vehicle, how did the lender know where to find it in order to repossess it?

Some credit union loans cannot be assumed by a third party. I don't even know if that's the case here.

this8384 · Mar 10, 2009, 10:38 AM

I know. The whole situation is a mess and it looks like the OP has taken off.

rollrsk8ter · Mar 10, 2009, 10:55 AM

Originally Posted by JudyKayTee

I think you're confusing the parties here - who do you think the third party is? The people who originally got the loan?

Or was the loan sold?

This is difficult to answer because I can't get a clear picture of what happened.

Your exactly right. I confused this big time. I was speaking as the person on the credit union loan/title as 3rd party.