The family car after separation: who keeps it?

Following separation, one of the first practical issues many couples face is what happens to the family car. Unlike the family home or significant financial assets, a vehicle is often essential for day-to-day living, particularly where children are involved. However, the family car is treated as part of the property pool and must be considered as part of any overall property settlement.

Who owns the family car?

The starting point is that the vehicle is an asset of the relationship, regardless of whose name appears on the registration documents.

A car registered solely in one party's name may still be considered part of the matrimonial property pool if it was acquired during the relationship or paid for using joint finances. Similarly, a vehicle registered jointly may ultimately be retained by one party as part of the final property settlement.

The Court will consider the ownership of the vehicle together with all other assets, liabilities and financial resources when determining a just and equitable division of property.

Who gets to keep the car after separation?

There is no automatic rule that the person who purchased the vehicle, registered the vehicle, or currently drives the vehicle is entitled to keep it.

In practice, parties often agree that one person will retain the vehicle, particularly where:

• they require the vehicle for employment;
• they are the primary carer of children;
• the vehicle is more suitable for transporting children; or
• the other party has access to alternative transport.

If agreement cannot be reached, the Court may determine who retains the vehicle as part of the overall property settlement.

How is the value of the vehicle determined?

The value of the vehicle must be included in the asset pool. Generally, parties will agree on the value based on:

• current market value;
• independent vehicle valuations;
• recognised vehicle valuation guides; or
• comparable sale prices.

It is important that parties do not simply rely on the purchase price of the vehicle, particularly where the vehicle has depreciated significantly since it was acquired.

What happens if the car has finance owing?

A vehicle loan is treated as a liability and forms part of the property pool.

For example, if a vehicle is worth $40,000 but there is a $25,000 loan owing, the net value of the vehicle is $15,000.

If one party retains the vehicle, they will usually also take responsibility for the associated finance. However, this must be considered as part of the overall division of assets and liabilities.

Importantly, transferring responsibility for repayments between the parties does not automatically remove a person's liability to the finance company. If both parties are borrowers under the loan agreement, the lender may continue to pursue either party if repayments are not made.

What if my ex took the car?

If one party has taken possession of the vehicle after separation, this does not necessarily mean they are entitled to retain it permanently.

The value of the vehicle will still need to be accounted for in the property settlement. For example, if one party keeps a vehicle worth $30,000, they may receive a corresponding reduction in their entitlement from other assets.

In circumstances where there are concerns that a vehicle may be sold, transferred or disposed of before property settlement, urgent legal advice should be obtained.

This article is general information only and does not constitute legal advice. Every matter is different — speak with one of our family lawyers about your specific circumstances.

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