Save Money, Share a Car - Shared Automobile Agreement

For many people, the cost of acquiring and owning an automobile is often second only to the cost of renting or buying one's own home. Cut this major expense in half by sharing a car with your significant other, a friend, or a roommate.

A Brief History of my Qualifications

After earning a BA in psychology (1998) and a JD in law (2001), I took and passed the Washington State Bar Examination. In 2002, I established a private law practice in Seattle, Washington. I strove to provide affordable legal services to a diverse community while also performing all administrative law firm duties. Interviewing and counseling clients in addition to managing ongoing cases was a major component of my law practice. (Please note, however, that this article is for informational purposes only and nothing in this article should be construed as legal advice.)

Sample Shared Automobile Ownership Agreement

The following is a sample Shared Automobile Ownership Agreement for you to peruse to get ideas of what types of issues may arise once you have made the decision to reduce your automobile expense by 50%.

SHARED AUTOMOBILE OWNERSHIP AGREEMENT

THIS SHARED AUTOMOBILE OWNERSHIP AGREEMENT (hereafter "Agreement" or "the agreement") executed on [date] is made by and between [Name of First Party] and [Name of Second Party] (hereafter referred to by name or as "parties");
WHEREAS, the parties desire to affix their respective rights and liabilities that may result from this joint ownership of an automobile, namely, a __________(year) _________________ (make) ___________________(model and trim) of ___________________ (color) acquired on _________________________ (date);
and, WHEREAS, they each have had an opportunity to consult with separate counsel of their own choice if they so desired;

NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:

1. [Second Party] shall contribute $__________ toward the purchase of an automobile from a third party. [First Party] shall contribute the remainder of the total purchase price of the automobile. The total purchase price of the automobile is $________________.

2. By [date], [Second Party] shall contribute the remainder of her amount due such that his/her total contribution toward the automobile shall equal fifty percent of the purchase price from the third party.

3. Upon the sale of the car, each party shall receive a percentage of the proceeds proportionate to the percentages of their contribution toward the purchase price of the automobile.

4. Automobile registration and taxes shall be shared in a 50/50 fashion during the first year of ownership of the automobile. Thereafter, the terms of who pays what percentage may be renegotiated, provided that, if the parties cannot come to a new agreement regarding the automobile registration and taxes, the sharing of the automobile registration and taxes shall continue to be shared in a 50/50 fashion.

5. The party predominantly using the automobile shall be financially responsible for auto insurance. If both parties are using the automobile approximately the same amount, then the parties shall share the insurance in a 50/50 fashion. At all times required by the applicable state law, the automobile shall be insured, at a minimum, in accordance with state automobile insurance law requirements.

6. Each party shall pay fifty percent of any general automobile repairs (e.g., timing belt, muffler, tire replacement, etc.). The party who predominantly uses the automobile shall pay the entire cost of any wear and tear maintenance caused primarily by the time during which that party has been predominantly using the vehicle (e.g., oil and lube changes, etc).

7. [Use this clause if you are a couple sharing an automobile.] In the event the relationship between the parties ends, the party who is predominantly using the automobile, or the party who has an expectancy to primarily use the automobile within three weeks after the ending of the relationship, shall have the option to buy the other party out based on the then current market value, provided that the then current market value results in a reasonably fair economic result for both parties.

8. In the event of damage to the automobile, the party who caused the damage shall either pay for repair of the automobile or, if the automobile is a total loss, the party responsible for the damage shall buy the other party out based on the then current market value of the automobile (the value shall be based on the automobile being in the condition it was prior to the damage). If the damage is a third party's fault, the party involved in the collision (or both parties if both were in the vehicle during the collision) shall attempt to collect fair compensation from the at-fault party or at-fault party's insurance company; provided that, if these attempts to collect fail, the party or parties shall sue the at-fault party if reasonable to do so. In the event it is impossible to recover fair compensation from the at-fault party, the parties shall share the cost of the damage.

9. If either party shall predecease the other party, the surviving party shall be the sole owner of all interest in the automobile. If necessary, the signature of the party below shall constitute valid transference of the vehicle from the deceased party to the sole ownership of the surviving party. This clause is intended as a will-substitute and is intended to supercede any testamentary devices executed by either party as well as any otherwise applicable intestate

10. This Agreement supersedes and replaces all prior agreements and understandings, whether oral or in writing, and may only be modified in a separate writing signed by both parties. This Agreement is in force when signed below.

11. No relaxation of the terms of this agreement or indulgence which one party may grant the other, will in any way operate as an estoppel against the former party, or be deemed to be a waiver of his or her rights or in any way limit, alter or prejudice those rights.

12. In the event that any one or more of the provisions contained in this Agreement shall for any reason be held to be illegal or unenforceable in any respect under the law of any state by a court of competent jurisdiction, such unenforceability shall not affect any other provision of this Agreement, and the remainder of the contract shall still be upheld.

DATED this _________ day of ________________, 20___.

__________________________________ ____________________________________
First Party Second Party

STATE OF [state] )
) ss.
COUNTY OF [county] )

On this day personally appeared before me First Party and Second Party, to me verified to be the individuals described herein and who executed the within and foregoing instrument, and acknowledged that each signed the same as his or her free and voluntary act and deed, for the uses and purposes therein mentioned.

GIVEN under my hand and official seal this ______ day of _______________, 20____.

____________________________________________
NOTARY PUBLIC in and for the State of [state]
residing at ___________________________________
My commission expires ________________________.

This article is for informational purposes only and nothing in this article should be construed as legal advice.