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Divorce and Car Leases and Equity in Automobiles and How They Are Equitably Distributed

Sep 22, 2015 @ 07:38 AM — by Michael Green

Parties with multiple cars that may have loans or leases, must ultimately decide who is to take which car and how the loans or leases are to be paid going forward. Registration and title of the cars may have to be transferred as well in order for the cars to be properly insured.  If parties are no longer living together, generally, their cars must be maintained on separate policies.  As to loans, generally, the loans will have to be paid off by the party taking the car, and they may have to indemnify the other party for the loan if the loan is to remain in the other party's name.  Loans may not be transferable to the other party for a variety of reasons, including credit worthiness.  At the end of the loan term, the car will be transferred in ownership to the party taking the care.  Equity in this car, determined often via Kelly Blue Book values, must be taken into account when distributing assets of the marriage.  The other party is usually given a credit for half of the equity in the car that the party is taking.  As to leases, generally, the same is done but the individual using the car no longer has the car at the end of the term.  Hence, no equity is transferred and is not distributed as a credit to the other party.  If you have a question regarding the division of your assets in a divorce, call Green & Associates now in our East Brunswick office at 732-390-0480 or in our Fort Lee office at 201-242-1119 for a free consultation.  Night appointments are available.  Ask us about our flat fees for specific services for an uncontested divorce or default divorce or annulment.

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