sassy1980 wrote:
I have a 2002 trailblazer that I bought used in 2004.
...
My friend is now saying he'll make the payments on the truck. It's only worth about $7,000 or $8,000. If he's willing to make the payments should I just let him so I don't mess up my credit more than what it already is.
If you go this route, I would ask how good of a friend is he and can you afford to loose him as a friend? I ask because money has a way of breaking up marriages, relationships, familys and friendships.
If you let him take over the loan, call up the company and ask about their grace period reporting lates. 5 days? 15 days? 30 days? It's good to know this so you know how much "cushion" you have. If he misses a payment, and the OC calls you when it's 10 days late, but they don't report it late to the CRAs until it's 30 days late, then you could make up the payment if he couldn't.
You might ask him to pay you directly and you pay it. That way you know it's paid. You could make up a story about the OC insisting payment be in your name, with your check, since the loan is still in your name. Makes the OC the badguy and not you.
Write up an "agreement", both of you sign it, and go get it notarized.
- He agrees to pay the monthly payment to you each month.
- He agrees to maintain full insurance coverage for the duration of the loan.
- You agree to pay the payment to the OC ontime each month.
- You agree when the loan is paid that the vehicle is his and you'll sign the title over to him.
- He agrees to pay any taxes and other fees associated with the title transfer and the "sale" when the title is switched to his name.
If he balks at any of this, "because we're buds", tell him it protects him more than it protects you. If you decided to be a jerk, once the vehicle is PIF, you could claim it's yours and the title would be in your name.