I have the truck financed, mother in law wanted to pay and drive and has insurance on it so it that legal?

UPDATED: Apr 12, 2017

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UPDATED: Apr 12, 2017Fact Checked

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Asked April 12, 2017

1 Answer

There are a couple of factors that fall into the legality of the question. First and foremost, it is legal to work through the plan mentioned. Yes, your mother in law can pay, drive, and insure the vehicle. That is, if your financing allows it. You have to read through the policy that you have, however.

When you finance a vehicle, the lender is going to put out specific rules about what you can and cannot do with the car. For instance, the lender can dictate what kind of car insurance you must have, the deductible amount, and more. If you purchased a new car, you may have to maintain full coverage. If you bought a used car, the lender may require you to have a certain deductible. Read through the fine print, see if there are any restrictions about insurance, and whom drives the vehicle. If there are no major restrictions, then yes, you can move forward as plan. However, in the case that there are restrictions, you'll need to follow them to the letter.

They may also recommend that you add drivers onto the policy that is in your name. As for your mother in law driving, and paying for the vehicle, she can. However, the lien holder is not going to change the name of ownership until you finish paying for the vehicle. As long as she is paying payments on time, you do not have to worry about the legal issues associated with the plan. However, it is very important to realize that if she does not pay, you are liable for that payment. It is legal to have her drive, pay, and insure the car, but you still have a semblance of responsibility as well. Even if it's only by name, and financial responsibility if she doesn't pay, you have to maintain a certain focus.

Answered April 12, 2017 by JoshB

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