DH and I have learned the hard way that you should never sell a car to someone you know, whether it is a friend, family member, colleague or employee. Something always goes wrong with the car after the sale and it causes bad feelings even when you sell it “as is”.

PP again. You should consider whether your friend can afford to own a car or whether it would just sit unused while she stressed about how to pay for running it.

If this was my friend and I truly didn’t need an old car or the proceeds from selling the car, I would just give it to her. We have done this with two of our cars to people we care about in need, as is with no strings attached. They can use or sell the car as they wish. We complete the title transfer paperwork and cancel our insurance at the same time. That way, you have no more liability for the car and it doesn’t harm the friendship if there is a problem with the car later since it was a gift. Owning a car takes money—money for gas, insurance, registration, maintenance and repairs. The two people we gave our cars to could afford these costs and it was a huge help to them not to have to buy a car in good condition.

My wife has a congenital eye disorder that has affected her off and on throughout her adult life. At one point between procedures, she was legally blind. We had a friend who had hit some hard times when her oldest was in high school. They were having logistics problems, so we offered my wife's car to them to use for 2 years. The teenage son drove Mom or Dad's car and Mom or Dad (our friends) would drive our car. Our arrangement was that the son would never be driving our car.

We gave them a notarized letter that we both signed that said that Mom and Dad were authorized to drive our vehicle with VIN #nnn. They were able to add our car to their insurance with our letter authorizing their use. I believe I was sent a form that I had to complete, sign, get notarized and return and that was it. Fortunately, since the car was a small older car, it didn't cost them very much to add it to the insurance. After my wife had a surgery that restored a signficant portion of her vision, she could drive again and we coordinated with them to get the car returned. Fortunately, at that point, the son was graduating and they were passed the worst of the financial problems, so everything worked out well timing wise.

I agree that you should work out maintenance. We had a gentleman's agreement about maintenance. The other family handled basics like oil change. We didn't have any big maintenance, but I probably would have footed most of the bill had it happened because we were stable financially and obviously from the circumstances, they were not. Fortunately, nothing major came up.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Could you simply sell her the car at a token price?

and then offer to buy it back at the same price when she's out of the woods.

the down side, is you will pay sales tax on the cars actual value not sale price

Baloney. You pay tax based on the invoice/bill of sale. Obviously you can't sell a $10,000 car for $1. But I once wrote an invoice for $5,000 for a $10,000 car. Saved on the tax.

kind of depends on the mood of the folks at the DMV. if the value is close they won't balk. if its too different they might check nada book value...

obviously if you sell a car for $1, you'll pay sales tax on the cars value.. at least in VA.... Again depends on the mood of the person behind the counter

When this happened to us, I called the insurance company, and they said that if the other driver was going to use the car for more than a couple of weeks, I would need to change the terms of my insurance, ie, pay more.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Could you simply sell her the car at a token price?

and then offer to buy it back at the same price when she's out of the woods.

the down side, is you will pay sales tax on the cars actual value not sale price

Baloney. You pay tax based on the invoice/bill of sale. Obviously you can't sell a $10,000 car for $1. But I once wrote an invoice for $5,000 for a $10,000 car. Saved on the tax.

NP here: I think that is correct however if you live in VA you will be paying the personal property tax on the assessed value of the car and not how much you paid for it.

Anonymous wrote:

Anonymous wrote:Could you simply sell her the car at a token price?

and then offer to buy it back at the same price when she's out of the woods.

the down side, is you will pay sales tax on the cars actual value not sale price

Baloney. You pay tax based on the invoice/bill of sale. Obviously you can't sell a $10,000 car for $1. But I once wrote an invoice for $5,000 for a $10,000 car. Saved on the tax.

I had to make this decision several years ago and decided against it. The friends who needed a car are very hard on everything they own. I was pretty sure the car would be trashed/destroyed and it might stress/ruin our friendship. I kept my mouth shut and decided in favor of "neither a borrower nor a lender be." Good decision.

Anonymous wrote:Could you simply sell her the car at a token price?

and then offer to buy it back at the same price when she's out of the woods.

the down side, is you will pay sales tax on the cars actual value not sale price

Anonymous wrote:Could you simply sell her the car at a token price?

This seems like a good idea. Is it a possibility, OP?

Could you simply sell her the car at a token price?

She can buy her own insurance as a non-owner driver. While most people think that insurance "follows the car", it is really the driver and owner who are insured. Just make sure that she gets full blown liability.

I did this with a friend when I needed a car for a couple of months. I could have rented, but my friend thought that was silly. So I explored insurance and it's an option. Not costly.

What you DO need to work out is maintenance and things that break. Who pays if the radiator gives up the ghost? Or a belt slips. Or the AC goes out (not needed now, I know). Oil changes and the what not.

Car insurance follows the car
You should call your insurance to see what options you have
Adding her will be expensive if she's never had insurance

I have a friend that helped me in the past tremendously. Now I feel its my turn to pay it back when she got into same hardship. I own an old car that has been sitting for a while and I have no use for it. When she mentioned it takes her more then two and a half hours to get to work (public transportation) one way with young children being by themselves at home i felt sorry for the whole situation and decided to offer the car that I don't use. Especially with the cold and winter coming her trip trying to use public transportation could become miserable.

What is the best way to go about it so we don't strain out friendship? Do I ask her to sign up for her own car insurance, do we have to both have insurances just in case. Can she sign up for car insurance for my vehicle that she doesn't own? She does not own a vehicle and never had car insurance before. Should I sign a lease or some type of document with her about any liability?

Thank you.