Ridiculous situation: Selling a vehicle to a minor in the form of payments

[MrNice]

Alright, I'm going to try to explain this and it might be hard to understand but I'll do my best. I have a friend who's 17 and he has the same job as I do and he makes decent pay. I'm 21 and I have great credit. My friend wants to buy a car but isn't old enough to take out a loan to buy one himself. In exchange for his car that he currently owns, I'm willing to take out a loan for him to buy the car outright (private sale), and then immediately sell it to him for the amount of the loan in the form of payments. So basically, he'd be making all MY loan payments to pay for HIS car. I will do this for him under one condition only: that there be a contract involved in case any legal issues involving payment or anything else should arise. Sounds somewhat simple right? Stupid, but simple. However, he's incapable of being legally bound to a contract because of his age.

So what should I do? Should i then make the contract state that his mother be responsible for making payments and that he should pay his mother to pay me? In theory it seems simple but on paper it gets quite confusing. I'm not sure what I should do. The simplest thing would to be to not do it which is probably what you're going to say but I'll reassure you I have my reasons.

Minors are allowed to purchase vehicles through a simple bill of sale but by including a payment plan into it does that make it a contract? Lots of questions, lots of help required. A MILLION THANKS to anybody that can help me!

 

[Proserpina]

What should you do?

Tell him "sorry, but no".

Seriously - this is just not going to end well for you.

 

[MrNice]

What should you do?

Tell him "sorry, but no".

Seriously - this is just not going to end well for you.

It might not end well for me if I can't figure out how to legally bind him to paying me. Thanks for the advice but I've already made up my mind. I'm looking for advice on how to do this not how to NOT do this. I'm definitely not the first person to do this/think about doing this so I simply want to know how to do this with as little risk as possible.

 

[TigerD]

It might not end well for me if I can't figure out how to legally bind him to paying me. Thanks for the advice but I've already made up my mind. I'm looking for advice on how to do this not how to NOT do this. I'm definitely not the first person to do this/think about doing this so I simply want to know how to do this with as little risk as possible.

You need to talk to an attorney about your planned auto leasing/sales scam. Specifically listen for him to say words like: fraud, liability, insurance, and stupidity.

TD

 

[MrNice]

You need to talk to an attorney about your planned auto leasing/sales scam. Specifically listen for him to say words like: fraud, liability, insurance, and stupidity.

TD

What makes it a scam? The loan is an unsecured personal loan under MY name. I'm not scamming the bank or my friend.

 

[FlyingRon]

What makes it a scam? The loan is an unsecured personal loan under MY name. I'm not scamming the bank or my friend.

The loan is based on the fact that you are representing that the secured vehicle is going to be used by you personally. This is a lie and lying to obtain financial gain is fraud.

They won't let you transfer title (and then registration) when there's still a lien on the vehicle so it will remain in your name (i.e., it won't be sold to your buddy).

It then follows that the car would be insured in your name (if you don't show the bank insurance, they will buy VERY EXPENSIVE insurance for you and bill you for it). Your friend however would be regularly driving it and your insurance is not likely to cover a wreck in that situation.

So, now lets look at your liability:

1. You're responsible for paying the loan even if your friend punks out.
2. You're responsible for paying off the balance immediately when your friend crashes the car and it's found out that the insurance is not going to cover it.
3. You're responsible for any parking tickets, toll violations, etc.. and the like he gets.
4. If something he does causes the vehicle to be towed (parking violations, or certain traffic violations), you'll be responsible for the tow and storage fees.
5. If he injures someone or damages someone's property, you'll likely get sued by the other party (or by their insurer through subrogation). Again, you won't have insurance to step in and defend you it so you'll likely go to court and lose.

The fact that there is a loan here will affect your credit as well. If you were then to suddenly need a car, you might find that the lenders will consider you to be a poorer risk because you have too much debt.

 

[justalayman]

How long before he turns 18?

 

[single317dad]

I'm looking for advice on how to do this not how to NOT do this

Wait until the child is 18, then proceed with your plan. Easy peasey.

 

[Proserpina]

Where is everyone located?

 

[TigerD]

Where is everyone located?

On the couch in the TV room. But I am thinking of going into the library.

TD

 

[MrNice]

The loan is based on the fact that you are representing that the secured vehicle is going to be used by you personally. This is a lie and lying to obtain financial gain is fraud.

They won't let you transfer title (and then registration) when there's still a lien on the vehicle so it will remain in your name (i.e., it won't be sold to your buddy).

It then follows that the car would be insured in your name (if you don't show the bank insurance, they will buy VERY EXPENSIVE insurance for you and bill you for it). Your friend however would be regularly driving it and your insurance is not likely to cover a wreck in that situation.

So, now lets look at your liability:

1. You're responsible for paying the loan even if your friend punks out.
2. You're responsible for paying off the balance immediately when your friend crashes the car and it's found out that the insurance is not going to cover it.
3. You're responsible for any parking tickets, toll violations, etc.. and the like he gets.
4. If something he does causes the vehicle to be towed (parking violations, or certain traffic violations), you'll be responsible for the tow and storage fees.
5. If he injures someone or damages someone's property, you'll likely get sued by the other party (or by their insurer through subrogation). Again, you won't have insurance to step in and defend you it so you'll likely go to court and lose.

The fact that there is a loan here will affect your credit as well. If you were then to suddenly need a car, you might find that the lenders will consider you to be a poorer risk because you have too much debt.

THANK YOU. Someone with REAL HELPFUL information haha I've already taken much of this into account. Unfortunately, he won't be 18 for another year seeing as he just turned 17. I wish I could wait but the deal won't last that long, I'm sure. The only reason this seemed the littlest bit feasable is because the loan will be an unsecure personal loan. Because of that, they can't put a lein on the vehicle, take the vehicle as collateral, or anything of the sort. Hell they didn't even want the VIN number when I was discussing it. The plan was to buy the car with my loan and then immediately sell it to him for the cost of the loan with transfer of ownership and everything so it wouldn't be in my name. I make no financial gain out of this and I don't aim to. The aim is to break even and get his slick little whip out of the deal for use of my credit. I don't really wanna get into the details but if I could make this work, it would be quite worth it in the end. We live in Canada BTW, something I should have mentioned. I also understand and accept that I probably won't be able to get any loans until this is through with but I don't really plan on it anyway. I'm a rent aprtments/used car guy for now.

So if the loan is unsecure like I stated, would it still be a "scam"? The bank shouldn't really care. They always get their money in the end anyways. XD
Thanks for all the input, guys.

 

[Just Blue]

THANK YOU. Someone with REAL HELPFUL information haha I've already taken much of this into account. Unfortunately, he won't be 18 for another year seeing as he just turned 17. I wish I could wait but the deal won't last that long, I'm sure. The only reason this seemed the littlest bit feasable is because the loan will be an unsecure personal loan. Because of that, they can't put a lein on the vehicle, take the vehicle as collateral, or anything of the sort. Hell they didn't even want the VIN number when I was discussing it. The plan was to buy the car with my loan and then immediately sell it to him for the cost of the loan with transfer of ownership and everything so it wouldn't be in my name. I make no financial gain out of this and I don't aim to. The aim is to break even and get his slick little whip out of the deal for use of my credit. I don't really wanna get into the details but if I could make this work, it would be quite worth it in the end. We live in Canada BTW, something I should have mentioned. I also understand and accept that I probably won't be able to get any loans until this is through with but I don't really plan on it anyway. I'm a rent aprtments/used car guy for now.

So if the loan is unsecure like I stated, would it still be a "scam"? The bank shouldn't really care. They always get their money in the end anyways. XD
Thanks for all the input, guys.

What don't you understand about : U.S. Law Only

 

[MrNice]

What don't you understand about : U.S. Law Only

It's pretty much the same here in Canada, (most of the time) and all the canadian legal forums suck. I lurked around here for a bit and felt like you guys were the ones to ask. Stupid, I know.

 

[Silverplum]

WHAT is "his slick little whip"?

Nah, I don't want to know.

 

[Just Blue]

It's pretty much the same here in Canada, (most of the time) and all the canadian legal forums suck. I lurked around here for a bit and felt like you guys were the ones to ask. Stupid, I know.

Well then as it's "pretty much the same" on your side of the boarder...You would know that minors can't enter into a contract.