Episode 82 Transcript: Sharing a Family Car Post Divorce

In today’s episode, I wanted to cover the topic of a family car and how people will address sharing a family car in divorce. To back up, if you own a car or cars and you anticipate that only one person will be retaining ownership of or the right to use the car, that’s pretty straightforward and that will be addressed in your agreement as well, and it will effectively say that this person is entitled to keep this car and this person is responsible for the expenses associated with that car. Many times, and often in the city where people only have one car, and one car that they don’t use frequently, couples will envision continuing to share a car for some period into the future. That’s really what I want to speak to here and give you some clarity into what are the different kinds of things you need to think about and speak to if you are anticipating or hoping to share your family car going forward.

The first thing you want to get clarity on and then speak to in your agreement is how title to the car or how the lease agreement for the car is held. In whose name is it held? Is it joint? Is it in one person’s name? Do you want to make any changes to that? For instance, sometimes title to the car is held in one person’s name, and you want to add another person’s name to title, or you want to transfer title to the other person’s name. If you’re intending to do that, we want to speak to that in your agreement. Similarly, if you own your car, you hold title to the car but you do have a financing plan in place, you also want to speak to whose name is on that financing agreement, usually with the dealership or whoever loaned you the money to purchase the car, which loan you are continuing to pay off.

Transferring title to or the name on a debt is never as easy as transferring the name on an asset, like on title to the car, but you want to clarify what your options are there. Can you have both of your names on the financing? Is that something that you can alter in the future if you’re going to be sharing responsibility for the financing payments? Whether or not you can do that, we will speak to that in your agreement as well. It’s just something that you want to clarify at the outset. In whose name is title held? If you own a car with some debt on it, then who is named on the financing agreement as the responsible party for the outstanding debt on the car? If you want to alter the way title is held or who is named on the financing agreement with respect to the car, you want to look into whether or not you can do that. Then if the car is not owned, but it’s leased, clarifying who is named on the lease.

The next thing you want to clarify is who is entitled to use the car. In this case, I’m talking about a circumstance in which both of you would be entitled to use the car. Is there any kind of schedule of use of the car that you want to put in place? For instance, are you entitled to use the car, if you have kids, when the kids are scheduled to be with you? So the car use almost follows the kids. That’s one example of how people might handle access to a shared car. Are there any rules that you want to agree to around using the car? Like not having people other than family members in the car, if that’s relevant for you, or not smoking in the car. Whatever rules you might want to include. There don’t have to be any if you don’t feel that that is needed, but it’s just something to think about. Are there any basic or fundamental understandings about how this car is used that you want to clarify and articulate in the agreement? That’s speaking to the use of the car.

Now let’s talk about the cost and how to handle sharing the cost of a shared car. When you think about the costs for a car, you want to think about them in two categories. One are the recurring, regular, predictable costs that you have associated with the car. Parking garage. The cost of insurance. If you have a lease, the cost of your lease. If you have financing on your car, the debt service on that. The cost of registration for the car. Those regular, recurring costs are going to be in place and associated with the car regardless of usage of the car. They’re just part of the fixed costs to owning the car.

Then you have regular, recurring expenses. They’re recurring, but they’re slightly variable because they are impacted by your use of the car. Those are basically gas and tolls and sometimes parking tickets, depending on whether or not you park your car in a garage or street park it and are subject to more tickets. Those are their own subcategory in that they are reflective of and created by a person’s use of the car rather than just static and in place, like your car insurance would be, or your parking garage fees would be.

Then the other big category of costs associated with owning a car would be the one-off costs like if a major repair is required to the car or if, God forbid, there was damage to your car or another car as a result of some kind of accident.

When you think about those different categories of costs, the more recurring ones and then the more one-off types of costs, you want to think about, “How are we sharing responsibility for this? Are we sharing it 50/50 with regard to just the expenses of maintaining the car?” Again, parking garage, the cost of the lease or financing, the cost of car insurance, and even regularly scheduled maintenance to the car could fall into that category. “Are we sharing that in proportion to our incomes? 50/50? Are we handling expenses like gas and tolls for the car differently because those are more tied to each person’s own use of the car? Or if we anticipate only using the car related to our children, are we sharing all of those costs, including gas and tolls, in the same way?“

Then with regard to one-off expenses, if there’s a repair or damage to the car, do you want to simply share that in a certain percentage or do you want to assign responsibility more based on fault? Which is to say, if damage was caused to the car during one person’s use of the car, that person is covering the damage. Whatever is not covered by insurance, I should say. There’s no right approach there, and people will take different approaches to sharing the costs of a shared car. That’s what you want to give some thought to, and you definitely want to clarify that in your agreement.

Finally, you want to give some thought to what would be an end date for sharing the car. Basically, so long as the two of you mutually agree, you can share the car for however long you want. But if one of you started to feel like, “You know what? This is not so great. Sharing the car is not working for me. I’m going to get my own car. You can keep this one or we can get rid of this one, but I don’t want to share anymore,” how do you want to handle that? Do you want to say that as soon as either person no longer wants to share the car, that’s the end of sharing it? And what happens then? Or if you have a lease or financing in place, do you want to specify that, “Well, no. We’re both on the hook for covering these fixed costs of the car for this period of time.”? For instance, for the period of the lease but after that, we basically would have to mutually agree to continue sharing the car. If either person feels like, “I don’t want to continue sharing the car,” then we’re simply not going to share it anymore.

I would say less common would be to say we are obligating ourselves to share this car until some date in the future, which is more tied to your kids, if you have kids. Until our kids graduate from middle school or whatever that date actually is. Most people, I would say, err on the side of once a fixed financial obligation for the car, as in a lease or the financing for the car, once that has concluded and is satisfied, most people do not obligate themselves to continue sharing a vehicle, because really for it to work for both of you, it needs to work for both of you. If one person is not comfortable sharing the car anymore, that’s not something you should continue doing beyond the financial responsibilities that are already in place and are not easy to alter, like the responsibility to conclude your lease or to conclude payment on the financing of the car.

That was our mini episode on how to handle the family car in your divorce agreement. I hope it was helpful for you.



Episode 83 Transcript: How Child Care Costs Are Handled in Divorce

Episode 81 Transcript: Acquiring Assets During Divorce