Co-Sign question

[Anonymous]

NEVER NEVER CO-SIGN FOR ANYONE. Most marriages don't last much less a relationship. DON'T DO IT AS YOU WILL REGRET IT.. There is a reason why your girlfriend got bad credit.

[Anonymous]

Dont Do IT!!!! I have an extremely close friend who did that for her bf. Four months later they broke up, and 3 months after that she found out that he had never made a single payment and the car had been repossed. It ruined her credit. He skipped town and the creditor hounded her for the backed cash after the wholesale of the car. Her credit sucks, she had to hire an attorney to help work through the issues since she was never notified of the debt, and is about about 5k so far. No matter how much you love her, if you are not married to each other, dont do it! It isnt worth it! 

[taz3261]

Never Cosign for anyone!!!!!! If they can not get it own their own establish credit and try again later!!!!

[Anonymous]

one of two things... (to clarify firsthanf though, co-signing is usually a bad idea)

Do not lie to her about a reason you can not co-sign if you are not comfortable doing so.  Explain simply that co-signing would tie up your own DTI (debt to income ratio) making it too hard if you needed to buy a car in that same time period or if you wanted to buy a house/refi a current one. 

If you are willing to co-sign do the following:

Make sure you are on the loan, the title, and the registration.

Require that you have a key from day 1

Require that you have online access to the account so you can keep track from day 1

Keep 2 months of the payment held in savings so in case you have to step in, you are somewhat prepared

Spend a few bucks and have a lawyer draw up a release for her to sign waiving rights to the car if she fails to make x amount of payments so you can just go pick it up and sell it/etc.  Effectively you want a power of attorney for the car in case she starts to default.

Make sure that you and your GF are both very clear on all of this.  If the GF really needs the car and this is the only way, she should not be offended that you want it spelled out very clearly and that you want some measure of control.

[Anonymous]

NEVER , NEVER, NEVER CO-SIGN for another person.

I once asked my father to co-sign a student loan for me at our CU (many years ago), and I wound up having SEVERE health problems that I could not predict.  I gave my father my word that I would not let him down.  There was nothing I could do, because my health problem took me one and one-half years before I could go to work or return to school.  I let my father down and from the point that the CU went after him, our relationship went down the tubes never to recover.  I did recover financially and tried to repay him whatever it cost him financially, but I could never make up to him what the situation did to him and the position it put him in, and he never forgave me.  I would rather do anything than ask for a co-signer.  There just are no guarantees in life, anything can happen and the future cannot be predicted.  The road of "Good Intentions" is paved with tears.

If you meet a person who is hungry, you can give him a fish and he will be fed for a day.  Why not take time and teach him to fish.... then he will be fed for life.

There are other options for your girlfriend.  In years past, I have saved for two years in order to purchase a car with cash.  In the meantime, I used other modes of transportation.... including paying for rides, public transportation, catching rides with friends, walking, renting a car.....even someone loaned me a car for few months because it was old and I pai the expenses on it and kept it in good repair.  You would do better to help her find a way to do it.... get the needed transportation on her own..... than to co-sign.  Yes, a co-sign can help someone get what they need quickly and give them a good credit history relatively fast.  But some things just have to be learned and take time.  If you must help her get a car, cover yourself legally/financially (as others here have specified), or buy her an old car and let her pay you back thereby teaching her how to make payments.  Help her learn how to establish good credit the old fashioned way.... by earning it slowly over time.  Also, you could consider putting her on one of your established accounts with a good credit history record with the stipulation she doesn't have access to charge anything to the account.  That can help someone establish a good credit history.  Even if she has to get her first car loan with a higher than normal interest rate (with a reputable lender only), once she has paid the loan on time for a year or so, she can then go to her friendly Credit Union that she a good history of banking with and apply for a refinance.

PLEASE DO NOT CO-SIGN.  There are better ways to achieve what she needs, better for you and better for her.

Sincerely,

abi

[Anonymous]

IMO no, not unless you are willing to pay her car payment for her and be responsible for it being paid on time. Everyone is saying to NEVER cosign for ANYONE. I don't agree 100%. I think it is ok for a spouse to cosign. I think in your case a "girlfriend" seems to most to be a real risk to cosign for. I wouldn't cosign for anyone else but my spouse. Not even my children unless I am willing to make the payments and be in charge of sending the payments.

[DI]

OMG! DONT DO IT!   *WARNING*   Have you not seen the freecreditreport commercials? 

[Anonymous]

What do you guys feel about this situation (which I am currently facing).

My girlfriend of the past 3 years (I am asking her to Marry me on her Birthday next month, WISH ME LUCK hahah). Her credit is very much is need of help (we are working on it, but it is a long way from anything right now). It was caused by her divorce, where her Ex was the one with bad credit and she co-signed, made purchases, etc.....

She is in need of a new car. Her current is having some major problems, and considering she is the main source of transportation for my 4 year old, and our dogs, etc.... I feel like I need to do whatever I can to get her into something that I feel safe with her driving.

So my idea, is to get the loan in my name and my name alone. She will make the payments (the budget we are looking at, is if there was something to happen, I could make the payments till I sell the car). I will essentially be leasing her the car.

Would this be the best way to handle the situation? (of course the BEST way would be that she gets the loan on her own).

[Anonymous]

IMO, if you are responsible for the loan on the vehicle, you must also be owner of the vehicle in the example you gave.  Therefore, the scenario would involve you purchasing the car with both the vehicle and loan in your name alone, and then your selling the vehicle to her and holding a private loan and she would make regular payments to you.  BTW, this will not help her build good credit so she will have to be doing that separately from her car loan with you.

Should you decide to do something like that, you need to know with certainty you can make those payments even when she can't no matter how long a period of time it is for and no matter how many times it happens.  You must treat the vehicle as if it is your own until she has paid for it entirely, making sure the insurance is kept up-to-date and the maintenance on the car is done, just in case you have to "repo" the car and sell it.  In a situation like this, you need to make sure the vehicle is going to be worth the loan value also, so you can sell the car and make enough on the sell to pay off the loan.  Keep in mind you are completely liable for whatever happens with the vehicle, just as you are with your own car, even though she is driving.  Keep your own set of keys on the vehicle and you may want to gps it for tracking purposes (there are some reasonable deals for this out there).

There is other valuable information in the previous posts on this topic that you will also want to check, so PLEASE go back and read them all since the thread started.  If it were me I probably would not do it because of personal past experiences from both sides of the issue.  I would consider purchasing an old but mechanically sound/safe vehicle with cash and allowing her to use it while she is paying the insurance payments/maintenance, or selling it to her and holding a short term loan (with the stipulations above).  Usually when a person cannot get a loan in their name for a car, it is because there are VERY good reasons and the banks/credit unions know what they are doing.  It is difficult because you care for the individual, so make sure you are covered from every possible liability if you proceed to help her with this because neither of you can predict the future and so many things can go wrong.   

Sincerely,

abi 

[Anonymous]

So my idea, is to get the loan in my name and my name alone. She will make the payments (the budget we are looking at, is if there was something to happen, I could make the payments till I sell the car). I will essentially be leasing her the car.

Would this be the best way to handle the situation? (of course the BEST way would be that she gets the loan on her own).

If your goal is to help her credit, then your scenario wont work,  She would need to be on the loan for it to help her,,,  

If you're willing to keep up with and take over the payments should the need arise,  and you are comfortable with it,then do it,

Good luck with whichever way your proposal goes,