Full question:
I am purchasing a car from a friend. The friend has been leasing the car. If I give the friend a check to pay the vehicle off, what legal forms should I obtain? The friend wants to apply for the title and then sign the title over to me when received. Can I legally get insurance on the car before the title is in my name. Also the friend lives in one county and I live in another, both in TN.
- Category: Automobiles
- Subcategory: Lease
- Date:
- State: Tennessee
Answer:
The lease agreement will outline whether it can be transferred or if your friend can pay it off early (often called an early buyout). Review the lease for any restrictions on buying out the lease and obtaining the title. Generally, the title cannot be transferred from the lender (as the lien holder) until the lease is paid off. This means there is some risk in paying your friend before the title is officially released.
If your friend successfully pays off the lease and obtains the title, selling the car to you is straightforward. This typically involves a bill of sale and a title transfer through the local government agency where the car is registered. The bill of sale serves as proof of ownership for the title registration.
Regarding insurance, most insurers will not issue a policy for a vehicle that you do not own or lease. However, your friend's insurance may cover you if you have permission to drive the vehicle. They should check with their insurance provider for specific details.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.