I'am buying a truck for a friend of mine he will make mouthy payments until paid in full . How should I draw up the paper work to protect me...

Question

I'am buying a truck for a friend of mine he will make mouthy payments until paid in full . How should I draw up the paper work to protect me & him ?

Answer

There should be a promissory note he makes in favor of you that sets out the economic terms of the loan. There should be an agreement so that he gives you a lien on the title at the time it is purchased. He also needs to carry proper insurance on the truck and make you a "loss payee" so if it is totaled, you get the insurance proceeds, or if the insurer won't do this you must make sure he must turn the money over to you to clear the loan in the agreement. When he does pay off the loan, you will have to release the lien on the title. Those are the "guts" of the arrangement; normally a loan agreement has a lot more to it - including repossession rights..... You may find that kind of complete agreement on line, and it may cost a few dollars. Or you could see a local attorney to "middle" it. Friends can become enemies over these kinds of things - make it a straight business transaction to protect your friendship -- and don't simply hand over the money before he signs off. Again, if you're NOT sure how to get this all done, for a couple hundred bucks an attorney should be able to give you a hand. Again it will protect the friendship, and assure a clean business transaction.