How Cars Are Divided in a Divorce: What You Need to Know

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When couples divorce, one of the most common questions that comes up is, “Who gets the car?” While cars may seem like straightforward property, dividing them can become complicated, especially when they carry sentimental value, are tied to work or childcare needs, or have outstanding loans. Understanding how cars are divided in a divorce can help reduce conflict and set realistic expectations.

 

Marital vs. Non-Marital Property

The first step in dividing any property, including cars, is determining whether the vehicle is marital or non-marital property. In general, if the car was purchased during the marriage — regardless of whose name is on the title or who primarily drives it — it is considered marital property and is subject to division.

 

However, if the car was owned by one spouse before the marriage or was received as a gift or inheritance solely by one spouse, it may be considered non-marital property and usually stays with that spouse.

 

Valuing the Car

Before dividing a vehicle, the court or the spouses will need to determine its value. This typically involves looking at the car’s current fair market value, not the original purchase price. Online tools like Kelley Blue Book or Edmunds can help estimate value, or an appraisal can be done if the car is especially valuable or unique.  CarMax will offer you an amount on paper that shows how much they would pay for your car.

 

Keep in mind that the car’s value may be offset by any outstanding loan balance. For example, if a car is worth $20,000 but has a $15,000 loan, its net value (equity) is only $5,000 for purposes of the divorce.

 

Options for Division of Car Equity

 

There are several common ways cars are divided in a divorce:

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1. One spouse keeps the car and offsets the equity.
   This is the most common outcome. The spouse who keeps the car may “buy out” the other spouse’s share by giving them cash or other marital assets of equal value.

2. Each spouse keeps their own vehicle.
   If both spouses have separate vehicles of roughly equal value, the simplest solution may be for each to keep their own car, with no additional adjustments.

3. Sell the car and split the proceeds.
   If neither spouse wants the car or if it’s difficult to divide fairly, selling the car and splitting the proceeds can be an option. However, keep in mind that selling can take time and may come with additional costs.

4. Trade-offs with other assets.
   Sometimes a car’s value is balanced out with other property, such as one spouse keeping the car while the other keeps furniture, a bank account, or another marital asset.

 

Loan and Title Considerations

Even if a divorce agreement awards the car to one spouse, the lender is not bound by the divorce decree. If both names are on the loan, both spouses may remain legally responsible for payments. It’s important to address who is responsible for keeping payments current, or requiring that the auto loan is refinanced or loan will be paid off as part of the decree to avoid future credit problems.

 

Similarly, the title must be updated after the divorce to reflect sole ownership, which usually involves signing over the title at the Secretary of State.

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Dividing cars in a divorce may seem straightforward, but it can have financial, legal, and emotional layers. Working with a knowledgeable divorce attorney can help ensure that the division is fair, practical, and enforceable. If you have questions about dividing vehicles or other marital property, contact Mr. Nordini today — where he can help guide you through the process with clarity and confidence.