Two-car families are common in the U.S. In fact, according to the U.S. Census, nearly 60% of American households own at least two vehicles. So when these couples get divorced, they often simply agree that each of them will keep their own car. But your situation may not be that simple—if, for example:
- you and your spouse only have one car
- you and your spouse own two cars, but one of them is worth much more than the other
- your spouse bought a car before you were married, but the car note was paid off with money earned during the marriage
- you bought an automobile during your marriage but put the vehicle in one spouse’s name, or
- one of you bought a car or truck after you separated or after one of you filed divorce papers.
In these and other scenarios involving a couple’s vehicles, the issue of what will happen with the car after divorce will depend on the particular circumstances. It will also depend on the laws where you live, especially your state’s rules on what’s considered marital or separate property, and how property is divided in divorce.
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- Is the Vehicle Marital or Separate Property?
- Does It Matter When the Car Was Purchased?
- Does It Matter Whose Name Is on the Vehicle Title or Registration?
- What If Your Spouse Gave You the Car as a Gift?
- How Judges Decide Who Gets the Car in Divorce
- Approaches to Property Division: Equitable Distribution or Community Property
- How Do Judges “Divide” a Car in Divorce?
- What Happens to a Leased Car or Car Loan in Divorce?
- Can You Sell or Buy a Car During Divorce?
- Getting Help With the Property Division in Your Divorce
Is the Vehicle Marital or Separate Property?
In most states, only marital (or community) property is divided in divorce, and each spouse will keep their own separate property. So if you’re fighting with your soon-to-be-ex about who will keep a car or truck when you split up, the judge will usually start out by deciding whether the vehicle belongs to both of you or to one of you separately. (But this distinction might not be much of an issue if you live in one of the states that allow judges to include separate assets in the property division during divorce.)
Does It Matter When the Car Was Purchased?
As a general rule, any assets that either or both spouses acquired during the marriage are marital property (or community property in some states). Assets are generally considered separate property if they were acquired before marriage, or during the marriage as an inheritance or a gift (to one spouse rather than to the couple).
These rules apply to vehicles just like any other personal property, such as couches or TVs. So if you bought a car before the marriage or inherited it from your aunt during the marriage, you usually will be able to keep the car as your separate property when you get divorced. And if either you or your spouse bought a vehicle during your marriage, the judge will usually treat it as a marital asset that will be part of the property division.
But the time of purchase might not determine the outcome in some circumstances, such as when:
- you bought a car shortly before the wedding but used marital funds to pay off the car loan
- while you were married, you used a generous birthday gift from your parents to pay cash for a car in your name.
Also, depending on where you live, a car that you bought before you were divorced—or even before you filed for divorce—might be considered your separate property if you bought it with money you earned after you and your spouse were permanently separated. Under California law, for instance, a spouse’s post-separation earnings are separate property. (Cal. Fam. Code § 771 (2022).)
Does It Matter Whose Name Is on the Vehicle Title or Registration?
The name (or names) on a vehicle’s title can also play an important role in the judge’s decision as to whether it’s marital or separate property. That’s especially true in the majority of states that use the “common law” system of property ownership, where the title on the property generally determines who owns the asset. But that doesn’t mean judges will always award a car to the spouse whose name is on the title. They may also look at the other circumstances to decide would be a fair division of a couple’s property (more on that below).
Also, many state laws presume that assets acquired during the marriage are marital or community property—and they allow spouses to counter that presumption with evidence that an asset was actually separate property. A vehicle title could be one piece of evidence, but it won’t always control the outcome. In some states, for example, a judge may find that a car was a husband’s separate property—even though he put the title in both spouses’ names—if he could prove that he paid for it with separate funds.
Even if your spouse presented you with the keys to a new car for your birthday and put the title in your name, it might or might not be considered your separate property when you later get divorced—depending on where you live.
What If Your Spouse Gave You the Car as a Gift?
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As we mentioned above, gifts to one spouse are generally considered that spouse’s separate property. But some states make an exception for gifts from one spouse to the other. In Florida, for instance, “interspousal gifts” are classified as marital property. (Fla. Stat. § 61.075(6)(a) (2022).)
So, even if your spouse presented you with the keys to a new car for your birthday and put the title in your name, it might or might not be considered your separate property when you later get divorced—depending on where you live. But if you live in a state like Texas, where gifts are separate property even if they come from your spouse, you would only need to provide convincing evidence that your spouse truly meant it as a gift. (Tex. Fam. Code § 3.001 (2022).)
How Judges Decide Who Gets the Car in Divorce
State laws not only determine whether a vehicle is considered marital or separate property. They also direct how judges decide to distribute a divorcing couple’s property, including their cars and trucks.
Approaches to Property Division: Equitable Distribution or Community Property
Most states use what’s known as the “equitable distribution” rule, which means that judges must divide a couple’s property fairly—not necessarily equally—when they’re getting divorced. And in most of those equitable distribution states, only marital property is divided between the spouses. State laws typically list a number of factors that judges must consider when they’re deciding what would be fair.
In the “community property” states, the laws assume that married couples jointly own all assets they buy or otherwise acquire during the marriage. In some of these states, that means that judges must divide the community property equally. But the laws in other community property states allow or even require judges to distribute the property fairly rather than equally.
In practice, even when a 50-50 split isn’t required, judges usually aim for a result that leaves each spouse with assets of roughly equal value.
How Do Judges “Divide” a Car in Divorce?
Of course, there’s no way a car can be divided like the money in a bank account. The process of property division in divorce starts out by listing all of a couple’s assets and then putting a value on each of those. Then, based on the value of the assets, the judge typically will distribute them between the spouses in a way that’s fair (or results in a 50-50 split).
For example, let’s say that you and your spouse own one car with a Kelly Blue Book fair market value of $20,000. And say that you’ve managed to convince the judge that you need the car more than your spouse does, in order to get to work or take the kids to school. The judge might award the car to you and then even things up by awarding your spouse other marital assets (like an IRA) that are worth $10,000, or simply by ordering you to pay your spouse a fair amount. But if you and your spouse don’t own enough other assets or have enough money to make for a fair division, you might have to sell the car and split the proceeds.
What Happens to a Leased Car or Car Loan in Divorce?
As part of the property division in divorce, judges must distribute a couple’s debts as well as their assets. That includes the balance on a joint car lease or loan.
If you and your spouse both signed the lease agreement or car loan, you’ll both continue to be legally liable for the debt—even one of you will keep the car and continue to make the payments under your divorce judgment. That’s because the lender or leasing company isn’t bound by the divorce judgment.
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If the car was leased, you’ll probably have to go back to the leasing company to explore your options, which might include terminating the lease (for instance, by paying off what’s due or surrendering the vehicle) or transferring it.
With a traditional auto loan, you should try to protect yourself (if you’re aren’t keeping the car) by insisting on refinancing the loan in your spouse’s name before the divorce is final. If it doesn’t look like this will be possible—for instance, because your spouse has a bad credit rating—argue that the car should be sold. Otherwise, you could find yourself in financial or even legal hot water if your spouse doesn’t make the payments or files for bankruptcy.
If you’re considering selling a car or buying a new car during your divorce, you should check all of the paperwork in your case to see if that would violate a court order.
Can You Sell or Buy a Car During Divorce?
Once either spouse has filed for divorce, it’s common for the court to issue temporary restraining orders (TROs) that are aimed at maintaining the couple’s status quo until the divorce is final. Among other things, these TROs typically prohibit the spouses from selling, transferring, or otherwise disposing of any assets, or from taking on new debts, without the other spouse’s written consent or the court’s authorization. The specific provisions in these orders may vary, depending on state law. For instance, they may prohibit these actions in a way that hinders the court’s ability to divide the couple’s property fairly.
In some states, spouses may request these orders, or judges may issue the TROs on their own. In other states, these TROs are automatically part of every divorce. When that’s the case, they’re usually included in the standard forms that are part of the divorce papers.
If you’re considering selling a car or buying a new car during your divorce, you should check all of the paperwork in your case to see if that would violate a court order. These TROs generally include an exception when a spouse needs to spend money on necessary living expenses. You could try to argue that buying a car is a necessary living expense—particularly if your old car died and you need a vehicle to get to work. Depending on the language in the order, the safest route is probably to get your spouse’s written consent or to ask the court for permission before you act.
But what if you’ve found out that your spouse has already bought or sold a vehicle during your divorce? Or if your car was repossessed because your spouse stopped making payments on the loan? Check to see if there was a TRO in your case. Then you may want to speak with a lawyer to find out if either of these actions violated the order, and if so, to learn what you can do about it.
Getting Help With the Property Division in Your Divorce
As with all of the issues involved in ending a marriage, you’ll almost always be better off if you and your spouse can agree on what to do with the family car and other assets. That’s because your divorce will be more expensive and take longer if you need to go to court to have a judge decide for you. Also, you’ll have less control over the outcome.
A property settlement agreement at any point in the divorce process will help you save time and money. But if you can agree at the outset about all of the legal issues—including property division, alimony, child custody, and child support—you can file for an uncontested divorce. That way, it’s more likely that you’ll be able to get a DIY divorce without the expense of hiring lawyers, either all on your own or by filing for divorce online, using an inexpensive service to help with the paperwork.
You can turn to mediation if you’re having trouble working out an agreement. Mediators typically prepare a written document that reflects any agreements spouses have reached during the mediation process. Then you may submit the signed, written settlement agreement to the court for the judge’s approval.
But if you and your spouse haven’t been able to agree about your car or other property, even after mediation, it may be time to speak with a family law attorney who can evaluate your case and protect your interests in the divorce.
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