How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Debra Your Own Question
Debra, Lawyer
Category: Canada Law
Satisfied Customers: 100373
Experience:  Lawyer
Type Your Canada Law Question Here...
Debra is online now
A new question is answered every 9 seconds

A family friend asked me to cosign an auto loan. (we live in

This answer was rated:

A family friend asked me to cosign an auto loan. (we live in Alberta). I would like to know if I have any legal claim to the vehicle (ownership) if she stops making payments. Also could I be held liable for accidents she has while driving, and could I be held financially responsible if the damage or liability exceeds the coverage of her insurance, or she had let her insurance lapse and is involved in an accident?
Thank you for your question.

Before I begin I want to explain a bit about how the site works.

It may be that I will find that I need to gather further information from you. As well, it's quite possible that you may feel the need to ask me additional questions for further clarification.Please do not worry that you will be charged additionally if I ask you questions or if you need to ask me questions. That is not at all how the site works.

As well, please understand that as a careful lawyer I will always give you an honest answer even if the answer is sometimes not what you were hoping for.

Finally, as we go through the process please do not feel rushed if I ask you a question. You are always free to take your time to gather more information before you post back. As well, please understand that even after you rate me the post will not lock and you could always come back for further clarification if you think of something a bit later on down the road.

Are you on title to the car or just on the loan?
Customer: replied 3 years ago.

I have not signed anything yet, which would be to my best advantage. Will I have option here in Alberta?

If you are only co-sign the loan then you are not going to be liable for anything that happens with the car.

But you are going to be on the hook for the loan if your friend defaults.

If you are also on title for the car then you could be liable for any damages she causes when driving the car.

So there is risk associated with both alternatives but certainly less if you just co-sign the loan.

You can guarantee a loan without being an owner of the car.

Let me know if you need any further clarification.
Customer: replied 3 years ago.

Ok, so therefore if she decides to stop making the payments, and I don't have any title to car, I would basically have to finish paying off the car for her, and it would still be hers in the end.

But if I take title on the car, you say that I could be liable for damages. So even if she has insurance, I may still be liable if her coverage does not cover the damages. I assume I would certainly be liable if she had an accident and her insurance had lapsed?


You would be liable if there is an accident as the owner.

If there is no insurance or insufficient insurance, or for example if she drives while impaired and insurance will therefore not cover her, you will be liable.
Debra and other Canada Law Specialists are ready to help you

Related Canada Law Questions