How do we decide who gets cars or other vehicles?
Please note that these answers are not legal advice. If you’re in need of legal advice or a lawyer please visit our Expert Guide
Dividing vehicles during a divorce involves a mix of ownership rights, financial considerations, and negotiation. Here’s a breakdown of how it typically works:
Marital vs. Separate Property
Marital Property: If the car was purchased during the marriage, it is typically considered marital property, even if only one name is on the title.
Separate Property: If one spouse bought the car before the marriage and kept it solely in their name, it may be considered separate property—unless marital funds were used for maintenance or payments.
Evaluate the Vehicle’s Value and Debt
Current Market Value: Use sites like Kelley Blue Book or Edmunds to determine the car’s worth.
Outstanding Loan Balance: Subtract what is still owed from its current value to understand the equity in the vehicle.
Example: If the car is worth $15,000 and $5,000 is left on the loan, the equity is $10,000.
Deciding Who Gets the Vehicle
When negotiating, consider:
Who primarily drives it? If one spouse uses the car daily for work or transporting children, they may have a stronger claim.
Who can afford the payments? If you can’t afford the car loan and maintenance alone, it may be better for your ex to take it.
Trade-offs in property division: If you take the car, your ex might take more from another asset (e.g., a larger share of savings or furniture).
Buyout Options
If both parties want the car, one spouse may “buy out” the other’s share of the equity:
The spouse who wants the car pays the other spouse for half the equity value.
This can be done through a cash payment, or by trading off another asset of equivalent value (e.g., furniture, electronics).
Refinancing the Car Loan (If Needed)
If both names are on the loan, the person keeping the car may need to refinance to remove the other party.
This is important because if their name remains, they are still legally responsible for payments even if they don’t use the car.
What If You Can’t Agree?
If you and your ex can’t decide, the court may step in.
A judge will consider:
Who uses the car more frequently?
Who has primary custody of the children?
Financial capability to maintain payments and insurance.
In some cases, the court may order the car to be sold and the proceeds divided.
Example Scenario:
You and your ex own two cars: one paid off and one with a $10,000 loan. You drive the paid-off car daily for work, and your ex primarily uses the financed car. You both agree to keep the cars you drive. To make it fair, you agree that your ex takes a slightly larger portion of joint savings to balance the equity difference.
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