Does car belong to the one with the title or the one who pays for it?

A young man — call him Jeb — has been driving for six years, but with bad luck and poor judgment, has accumulated several auto accident damage claims. His car insurance company raised his rates. He can no longer afford the insurance payments, but still needs a car to get to work.

Jeb and his dad make a verbal deal. Jeb will transfer the car title to dad, but it will remain Jeb's car in all but title. Jeb will pay all expenses related to the car, including reimbursing dad for the insurance premiums.


Dad has a good driving record, so the insurance drops to an affordable rate. The plan goes smoothly for three years, until Jeb and his dad have a heated dust-up.

"I let you drive the car, but now I'm taking my car back," dad declares.

"How am I supposed to get to work?" Jeb asks.

Dad shrugs. "Not my problem," he replies.

Jeb wants to stand on what he believes are his rights and reclaim the car. He will argue that it is his car in all but name. Dad has title, but Jeb has had exclusive use of the vehicle and has paid all expenses for three years.

Who owns the car? The Maryland Code transportation article defines an owner as "a person who has property in or title to the vehicle."

The Motor Vehicle Administration answer is that if the vehicle title was properly assigned to dad, he owns the car no matter who has been driving it. That is, it is dad's car if Jeb and dad went through the required steps: Jeb signed the title as "seller;" the correct odometer reading was recorded on the title; dad completed, signed and dated the title and dad and Jeb submitted an application for Maryland Gift Certification to MVA.

Clearly, dad has title to the vehicle. But Jeb could argue that he has "property in" the car. Property is "the right to possess, use and enjoy a determinate thing."

The statutory definition does not specify whether title or property in an item is a superior claim to ownership. Dad and Jeb may have to settle their dispute in court.

Whether Jeb's argument could succeed may depend on whether a judge would conclude that Jeb acquired property rights in the car by paying all expenses related to keeping it on the road. The judge may consider that dad gave permission for Jeb to pay all expenses, which may imply that dad consented to allowing Jeb to have property rights in the car.

However, a judge may conclude that holding title to the car is a superior claim to having acquired property in it. That conclusion would favor Jeb.

If a loan had been involved in dad and Jeb's arrangement, Jeb could argue that he is entitled to use and possession of the vehicle, subject to dad's security interest, under the statute. A security interest would be created if Jeb still owned the car and borrowed money from dad, pledging the car as an asset that dad could repossess if Jeb defaulted on the loan.

Donna Engle is a retired Westminster attorney. Reach her with questions or feedback at 410-840-2354 or denglelaw@gmail.com. Her column, which provides legal information but not legal advice, appears on the second and fourth Sunday each month in Life & Times.