Co Signer For a relative.... (tips on getting a used car?)

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nismoZtuner
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Postby nismoZtuner » Fri Mar 21, 2014 8:34 pm

Vattené wrote:Hopefully your uncle understands!


hopefully thanks!
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Postby thom02099 » Fri Mar 21, 2014 8:36 pm

nismoZtuner wrote:Is there really a benefit for being someones co signer- my uncle wants a used truck and has been shopping around and I guess he was finally able to pick one out. If he signs the paper work for him self his Interest rate will be 7% or 7.9% since he doesn't have any credit history but his score is in the high 700s. He has the score but not the history. He has never cared about credit before. The only way he was able to get a score was because i was able to convince him on getting a credit card.

The car sales guy told me if I cosigned him that his Interest rate may go down.

I know that he has a year round job for Fresh Express and doesn't like to owe anyone money- but who knows what can happen later on.The truck he wants to get is a 2011 GMC Sierra with 30k miles at $25k with a 5k down payment.

I have never bought a used car nor new car from a dealership.
My credit score and history is only based on my credit cards(oldest is about 2 years now).

[color="red"]Besides being careful about cosigning someone is there a benefit for me?
[/color]I know i`m swiping my CSP once i receive it next week and bang $5k on that card!


No, not really.

Others have given some excellent responses. I'm speaking from the voice of experience, having co-signed 2 loans for my kids. I had to be diligent to make sure that they made their payments, and made them ON TIME. One late payment, just one and your credit can sink. Nope, you're not responsible but yes you are. Your Uncle may be making the payments, but if (God Forbid) something happened to him, financially or otherwise, you're on the hook for the balance on the loan. Also, if something happens and he gets behind, for whatever reason, this could strain relationships in your extended family.

In the case of my kids, both their loans were through our credit union, and as soon as they had an established payment history with the CU, I made them go in an apply for refi loan in their own name, getting me out of the middle. I will never, ever co-sign for anyone again. As others have said, the risks are just not worth it.

EDIT: Also, 7% really isn't all that bad from him to get the loan in his own name with that high 700s score. When he makes payments for a year, he can always refi with the same loan length, but get a reduced interest rate.
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nismoZtuner
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Postby nismoZtuner » Fri Mar 21, 2014 8:49 pm

thom02099 wrote:EDIT: Also, 7% really isn't all that bad from him to get the loan in his own name with that high 700s score. When he makes payments for a year, he can always refi with the same loan length, but get a reduced interest rate.


I didnt know that- Thank you!
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Postby flan » Fri Mar 21, 2014 10:13 pm

nismoZtuner wrote:Is there really a benefit for being someones co signer- my uncle wants a used truck and has been shopping around and I guess he was finally able to pick one out. If he signs the paper work for him self his Interest rate will be 7% or 7.9% since he doesn't have any credit history but his score is in the high 700s.


Have him apply at his bank, too. Car salesmen are sleazy, and compensated based on screwing you. It's entirely possible he could get a much better rate elsewhere.

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Postby nismoZtuner » Sat Mar 22, 2014 7:28 pm

well he ended up getting the car by him self and i got $6k worth of points!!
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Postby nismoZtuner » Sat Mar 22, 2014 7:29 pm

flan wrote:Have him apply at his bank, too. Car salesmen are sleazy, and compensated based on screwing you. It's entirely possible he could get a much better rate elsewhere.


he should have done that but didnt
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Postby Snowman » Sun Mar 23, 2014 3:28 pm

Nismo,

Don't do it. I have had friends that have co-signed to their family members and they've lost jobs or gotten injured or something and then my friends get in trouble because they don't make enough to pay for the car every month. You have to be really careful if you decide to or not. I wouldn't do it personally, mainly because I don't want to ruin any relationships with my family or friends.
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Postby MemberSince99 » Sun Mar 23, 2014 5:06 pm

Agree with Snowman. It's a potentially really bad move for you as you could be on the hook for it.

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Postby nismoZtuner » Sun Mar 23, 2014 10:42 pm

Snowman wrote:Nismo,

Don't do it. I have had friends that have co-signed to their family members and they've lost jobs or gotten injured or something and then my friends get in trouble because they don't make enough to pay for the car every month. You have to be really careful if you decide to or not. I wouldn't do it personally, mainly because I don't want to ruin any relationships with my family or friends.



Yeah I didn't do it... all I did was slide my card for points!
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Postby Snowman » Sun Mar 23, 2014 11:49 pm

LOL, good. You made the right decision IMO. If you had kids or something and you co-signed that would be okay but not beyond them. Money is not worth losing family or friends...
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