Who Gets the Car and Other Vehicles in Divorce?
- What happens when a car is marital property?
- Do you live in a community property state or equitable distribution state?
- If you only have one car (or two of unequal value)
- Separate property vs. commingled property
- FAQ about vehicles in divorce
You and your spouse are divorcing, and now you’re faced with the daunting task of dividing your property. Some assets, like money in bank accounts, are easy to divide. But material objects like cars, furniture, and houses? Not so much.
It can get more complicated when one of the cars is a late-model BMW and the other is a 10-year-old minivan on its last legs. It can also be dicey if the BMW was yours before you got married, but you used shared household funds for its upkeep.
How do you decide who gets the cars in a divorce? What happens when there’s a dispute? And what if there’s only one car to “divide” in the first place?
Let’s take a look at the variables at play and what they might mean for your personal vehicle ownership after divorce.
What happens when a car is marital property?
In most cases, only marital property will be divided in a divorce. Marital property is anything you and your spouse acquired while you were married. Anything you owned before your marriage is considered separate personal property and will typically be kept by that spouse.
In the most simplified scenario, if you purchased your cars during your marriage, they are considered marital property, and you must divide them between you.
If you brought your own car to the marriage, the car is yours. But … this is a simplified scenario, and divorce is rarely simple.
If you and your spouse disagree on how to divide your cars in your divorce, the court will get involved. And, when the court gets involved, it considers the laws of your state and your personal circumstances to make a decision it finds to be fair.
Do you live in a community property state or an equitable distribution state?
Is your state a community property state or an equitable distribution state?
Your answer to this question may affect your vehicle situation. If you didn’t know this already, state divorce laws differ regarding property division in a divorce.
- If you live in a community property state, you and your spouse are expected to divide your marital property 50/50. That means you and your spouse will consider the value of the cars you own together and divide that equally.
- If you live in an equitable distribution state, several factors will be considered when the court decides what would be fair in your particular circumstances. They may examine your financial situation, how long you were married, and what each of you needs in your new, single life.
Even knowing this, there are still more questions to answer. What happens if you share one car? What happens if a car that was initially considered “separate property” does not seem so “separate” now?
If you only have one car – or your two cars are disproportionately valued
As a material object, you can’t divide a car like you can some other assets. If you and your spouse only have one car, the court will consider the value of the car and decide how that value should be divided. (The same holds true if you own two cars, but one is worth a lot more than the other.)
For instance, in the case of the single car, the court may award you the car and require you to pay your spouse the difference in its value, give them other assets to offset their share, or sell the car and split the proceeds.
In the case of two disproportionately valued cars – the BMW and the minivan – the spouse who gets the BMW may be ordered to pay their ex the difference in vehicle values or make up for the difference with other assets.
Separate property vs. commingled property
If the car was yours before you got married and remained in your name, or if you inherited it during your marriage, it will most likely be considered your separate personal property in divorce. In most states, the car would be yours if your name is the only one on the title.
But remember: Those lines can become blurred. For example, if the non-owner helped the owner pay off the loan, replace the engine, etc., the vehicle may now be considered commingled property.
FAQ about vehicles in divorce
Who can help us determine who gets which car?
Before you get the court involved in dividing your property, you may want to try to come to your own agreement. Reaching an agreement outside of the court process is usually less stressful and less costly.
Can ownership of the car be easily transferred?
Transferring the title of a car is usually pretty straightforward, but if there’s an outstanding loan on the vehicle, you may require the lender’s approval. Check your financing documents or call your lender to understand the implications of a title transfer.
Would selling the car give us a better value?
In some cases, selling the car is not the best move, especially if there’s little monetary value left after paying it off. But sometimes, selling the car and splitting the proceeds is the only practical solution, particularly if the vehicle has significant equity or neither party can afford to buy the other out.
Deciding who gets the car in your divorce requires understanding the laws of your state, whether the car is marital or separate property, and what the vehicle represents in terms of value and necessity. The legal aspects are important, but so are the practical considerations. I
In the end, the goal should be to find a resolution that works best for both of you. At Hello Divorce, we’re here to help with a network of experienced legal professionals, mediators, and CDFAs who can guide you toward a cooperative resolution. Contact us to schedule a free phone call.