Friend wants to finance vehicle for me

[Ben G.]

Jurisdiction

Georgia

My truck broke down earlier this week and left me in a tough position. My truck is not worth what the repairs cost so I intend to sell it for scrap and buy another vehicle. I found a 2011 Dodge Nitro for $1200 + taxes and tag fees that was a repo vehicle from a title pawn company. It's in good condition and worth more than what the principal on the loan is but I don't have the cash for it right now. I only have roughly $400 which is just enough to pay the taxes on it. A very good friend and coworker of mine offered to finance the rest of it for me for a flat dollar amount of interest (probably $200-$400). He wants to put the title in his name until I pay it off. I trust his word as we've known each other for years but I don't feel like that's the right way to do this and it causes a bunch of complications with taxes and insurance.
I am most likely going to take the offer so my question is how to set this up in a way that is legal and protects both of us from ending up with a bad deal.

 

[Zigner]

You go on title as the owner with him as the lienholder.

 

[Ben G.]

You go on title as the owner with him as the lienholder.

Thank you. Is there a place in the title to state the amount owed to the lien holder or would that have to be written in a contract?

 

[Zigner]

You should review the information on the following site: Title Lien and Security Interests

I don't know the specifics, but I would not think that the details of the loan contract would be recorded as part of the process.

 

[adjusterjack]

He wants to put the title in his name until I pay it off.

Bad idea. He can be just as easily protected by following Zigner's suggestion.

Or, you can pay him off and he can decide to not give you the title and demand the vehicle.

I trust his word as we've known each other for years

I've been on legal websites for almost 19 years. You can't imagine how many thousands of tales of woe I have read that included the words "I trusted."

I don't feel like that's the right way to do this

It's not. Follow your instinct.

Whatever you do, make sure you thoroughly read and understand all the paperwork. If you don't, have an unbiased third party help you with it.

 

[mightymoose]

He wants to put the title in his name until I pay it off.

No... When you ultimately fight over repayment (yes, you will) he will take the truck that is in his name and you will have paid for nothing.
You should only do this if you really don't like your friend and enjoy drama in your life.