I am a Michigan resident. My daughter is Florida resident and has asked me to cosign on an auto loan. The size and repayment of the loan would not be a financial burden to me.
I am concerned about avoiding legal liability (insurance-type liability, not the liability to repay the loan) should the car be involved in an accident. I would have a cosigning arrangement where I am not named on the title or registration of the vehicle to avoid any potential legal liability. I realize that I may lose some potential recovery advantage by not being named on the titel or registration. Would this arrangement be sufficient in Florida to avoid legal liability (insurance-type liability)?
3 Answers from Attorneys
You are smart to put the car only in your daughters name. If you are obligated to pay the loan, but you are not on the title, then you are not an "Owner" under Florida law, and you are not vicariously liable for any damages that may be caused by the operation of the vehicle.
There is no legal liability under Florida Law for cosigning the note. If you are a joint owner you would be legally responsible for the drivers negligence
Co-signing a loan without any beneficial ownership of the vehicle would not make you vicariously liable for operation of the vehicle under Florida's Dangerous Instrumentality Doctrine.
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