Leasing a 2010 VW Routan

[Anonymous]

okay so basically my brother ran his credit to lease the car mentioned and he was denied due to high "debt to income ratio". Hes looking to have me co sign on the lease. Now how will this new lease affect my credit? Will my score drop? The msrp on the car is 34k but the payments are 293 for 36 months. Will the entire 34k show up or just the amount that is being paid over the 3 years? Also will he even be approved seeing how my credit history is 6 years and I have a negative marker 1 year ago (30 day late). The equifax credit score shows 736 and my balance ratio is about 27%. The score is up from 640 back in february. Will my credit score take a hit with this and how big a hit we talking? How soon ca I recover this hit if he makes the payments on time in the next 6 months. Would it go back to being what it is now, less or more? Sorry for the questions but Im new to this (some what) and thanks for the help.

[Anonymous]

Ok first:

1- You will have the normal score drop associated with opeing a loan. The drop will be minimal and depending on other factors on your credit score you will probably actually increase (or yes, you could  decrease- ) your FICO if you do not have any installment loans out now.

It is actually easier to buy a car then lease one.

Now the Big issue:

DO NOT CO SIGN FOR YOUR BROTHER.

What co signing means is that your Credit report will b elinked by his actions on the loan. If he is late on payments it will show up on your credit report effecting you, if he is late it may hinder your chances to get a loan with VW later.

If there are lease turn in fees, damage or overmileage that your brother cannot pay- you will be responsible.

if your brother makes 30 Perfect payments but has a hardship or addiction problem at the last 6 you will suffer for it.

If you co sign only on the vehicle but have your name NOWHERE else on the deal you have no rights to the vehicle even though you could be the one making payments. if your name is not on the registration and the deal its his car you have no say in it.

Your brother needs to buy a cheaper car.

[llecs]

+1

Sounds like he cannot afford it. I certainly wouldn't do it.

If you did do it, you must engrain in your mind that if he is late, then you are late too. If he has a repo, you have a repo too. If it gets charged-off, you have a CO'd account too. If he's going to get sued, you will too (well, they'll come after you first).

Score-wise, you'll likely take a hit (20 or so points) for the first 6-12 months. After that, you'll recover most, if not all, of the points.

I wouldn't do this for anyone, ever. If you did it, make sure you track the online payment history and make sure you have the $$$ in the bank to PIF if he's ever late.

[MarineVietVet]

I'm trying not to pile on here but if your brother has to have a co-signer then that shows his credit profile has definite weaknesses. He needs to buy/lease a car that his credit alone can handle.

I echo the advice to never co-sign for anyone for any reason.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[Anonymous]

okay here is the scenario and unfortunately part of the reason his credit isnt worthy is somthing he couldnt control. The other part is messing it up during early college years. Hes been responsible the past few years. Anyways heres what we decided

hes going to pay me the first year in advance rather than pay a down payment. Im going to see if I can set up recurring payments on my account. The plan is for him to get his checks directly deposited into my account as well during that time. He has two jobs so hes able to cover the payments on the car. Basically each time a payment is due, it will just be withdrawn from my checking account which requires a balance of $3000 each month to be available anyways. This will at the least cover the first two years. Now with that said how will it affect my credit score immediately? How will it affect my score 6 months down the road or longer? Taking into account that the payments are being made on time. The car payments will actually be $380 per month for 3 years with the msrp of the car being $34,400.

Thanks for all your responses btw.I never knew this place existe until now.

[MarineVietVet]

I wish you and your brother all the best but I will say one more time and then be quiet that you should never co-sign for anyone for any reason.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[Anonymous]

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@Anonymous wrote:

okay here is the scenario and unfortunately part of the reason his credit isnt worthy is somthing he couldnt control. The other part is messing it up during early college years. Hes been responsible the past few years. Anyways heres what we decided

hes going to pay me the first year in advance rather than pay a down payment. Im going to see if I can set up recurring payments on my account. The plan is for him to get his checks directly deposited into my account as well during that time. He has two jobs so hes able to cover the payments on the car. Basically each time a payment is due, it will just be withdrawn from my checking account which requires a balance of $3000 each month to be available anyways. This will at the least cover the first two years. Now with that said how will it affect my credit score immediately? How will it affect my score 6 months down the road or longer? Taking into account that the payments are being made on time. The car payments will actually be $380 per month for 3 years with the msrp of the car being $34,400.

Thanks for all your responses btw.I never knew this place existe until now.

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We have already answered that question.

No one here in these Boards can give you an exact point loss/gain and schedule of recovery- We can only tell you what we have told you that you may lose up to twenty points and over time that will recover.

Now:

As I have said: if you co sign but DO NOT get your name on any of the paperwork you do not OWN or have any say on the car. Simply put you can make payments your self for a year if your brother is incapacitated, but if you are not on the registration or paperwork you still would have to ask him for permission to drive it. There is no give me a set of keys and I will take it back-even if you have made all the payments its still his car and you would be considered stealing it.

Many people mistake cosigning for some aspect of legal ownership and that simply is not the case.

[Anonymous]

okay thanks. Just wanted to know what the next to worst case would be. As far as stealing it, hes okay. He'll have full coverage insurance. Just dont point them my way : ). Kidding!

I know that its an extreme risk credit wise but I trust him almost as much as my husband and hes also just as reliable (sometimes more so). It will make him happy and would also benifit his family with a new car. Hes coming from a 2002 dodge grand caravan so its a step up. Thanks again everyone. Im going to start frequenting this place often now that I know about  it. BTW Whats a FAKO? I assume credit scores from freecreditscore web site?

[llecs]

Score damage? It'll hurt your FICO scores for up to a year and maybe ding a little for as long as it reports a balance, worst case. I don't see more than 20-25 lost when it is first opened. I would avoid for applying for anything big for at least a year. If income in relation to monthly obligations is an issue, I'd hold off applying for anything until the lease is up.

Ignore that score. Lenders don't touch it. A FAKO is any non-FICO credit score. The scores from freecreditscore.com are FAKOs. Specifically, they are called PLUS scores and the scoring scale and formula is totally different than FICO's.

Final echo to everyone's reservation....reconsider.

BTW, I can't speak for Dodge, and assume that most everything is the same, but I have a Chrysler T&C from 2003 with about 180k miles and it still runs new (for as long as I keep it maintained). Every now and then I sink in it a thousand here or there to keep it tuned, but is certainly cheaper than buying or leasing a new car. You can really spruce up a Dodge Caravan, do some interior work to keep it looking new, and still save overall.

[haulingthescoreup]

And to add to the projected score damage, if you co-sign and things go wrong, even if for no specific fault on your brother's part, you can look at your scores dropping 75 points or so if the car is repo'd.

If you're going to do this, and it sounds like you're determined to do so , you should be able to make all the payments yourself without damaging your personal and family finances --every single payment for the life of the loan. Because that's what co-signing means.

Be sure that you have full access to the account online, and monitor it weekly. Always have at least one month's payment handy in a savings account in case you have to step in to keep the loan current. If your brother gets behind on a payment, you must make that month's payment before it reports to the credit bureaus as 30 days late, or else there goes your credit.

You have got to think this through, not just for your own sake, but for the sake of your family. If you have to assume payments, or if the loan goes negative and damages your own credit report, what happens if you and your husband need a mortgage? Your own car loan? A credit card that pays for needed healthcare?