Cars are an important asset, and are often the subject of dispute in a divorce—whether the couple owns or leases one car or multiple cars. Because cars are property and often purchased or leased with marital assets (funds), they are subject to the court’s decisions on how to divide the property. If the parties to a divorce are not able to agree on the transfer of ownership (title) and responsibility for payment of any car loans and insurance, the judge or jury may make these decisions for the parties.
In Arizona, which is a community property state, all assets acquired during the marriage are considered community property and are subject to division upon divorce. This includes cars, whether owned or leased. If a car was purchased or leased with marital funds, it is likely to be considered part of the marital estate. In the event of a divorce, if the parties cannot agree on how to divide their assets, including the transfer of ownership and responsibility for car loans and insurance, the court will make the decision for them. The court aims to divide the property equitably, though not necessarily equally, taking into account factors such as the duration of the marriage, the contribution of each spouse to the marital estate, and the economic circumstances of each spouse. The court may order the car to be sold and the proceeds divided, or for one party to 'buy out' the other's interest. Additionally, the court will consider the responsibility for any debts associated with the car, such as loans and insurance, and will allocate these accordingly.