What to do?

[nbarb001]

So here's a short version of my story. My mom has very bad credit and would not be able to get an auto loan in her name alone. I decided to co sign a loan for her in september of 2010. The APR was 19%. I could not bare to see my mother pay that interest rate on a vehicle. I decided to put the car in only my name. the interest rate was 7.39 (a little high because I have another auto loan). I calculated the savings from the previous loan to this loan to be about 7k. Me and my mother had an agreement where I would pay her auto insurance and she would take care of the car bill (285/mnth). Well here's where the story goes south.

There have been 15 payments made on the auto loan, 12 of them by me! She refuses to pay the car bill even though she does have the money to do. Every month I get the same story of how she cant pay it because she needs the money for this or that. So basically she doesnt pay the car because she knows that if she doesnt, I will because I do not want to mess up my great credit.

What are your opinions? I would feel horrible if I took the car away from her. She is my mother and I love her dearly, but those 300 bucks a month are really putting me tight up against the wall.

[laz98]

take the car back.  she's not holding up to her end of the agreement.  you have your own expenses to think about, & it's not fair for her to take advantage of you like that.

[GregB]

Now we know why she has bad credit, right?

At the very latest, you should have taken the car back with the first payment she didn't make.

I am also curious how she has insurance in her name. I am not familiar with any place where you can insure a car that is not registered in your name.

You do realize that when she crashes the car, they will come after you as the registered owner, right?

[haulingthescoreup]

I'd tell her that you can't afford the payments, so you're going to have to sell it if she doesn't live up to her end of the bargain.

If she believes you, and if she wants to keep the car, I'd also tell her that she'll have to pay you a month in advance, so that you always have a month's payment on hand. After all, she's already a year in the hole to you.

Sorry to hear that she's taking advantage of your love and of her position this way. That's just not right.

[Anonymous]

I'm sorry for what you are going through with your Mom.  i like the idea of telling her you can't afford the payments and need to sell it.  I'm sure she'll be upset, but I'm guessing that if this doesn't upset her something else will.  As time goes on you might want to consider not sharing any information about your credit or how you are doing financially with her.  Good luck! 

[nbarb001]

Thanks for all the replies you guys. Just to clarify, the car is insured under my name with her as a driver on the policy.

Selling the car is good idea except im upside down on the car. I owe 12k, took it to carmax and they offered me 8k (crooks). Im thinking if I sell it on the street I can at least sell it for 10k. This still leaves me upside down, not where I would like to be. Already have lost money that could have been used towards savings.

Its a bad situation, i know. Just would like a resoultion in which no one gets hurt.

[Anonymous]

The only resolution where no one gets hurt would occur if your mother had a sudden epiphany and paid you back all of the payments you have made, and refinanced the car or paid all of her payments on time in the future. Not likely to happen. I think you need to focus on a resolution that minimizes your future damage.

You do understand that whether you choose to sell the car to a dealership (like CarMax) or private party, you are going to have to come up with the underwater money in order to transfer title and clear the loan. The faster you can find a resolution that allows you to do that the quicker the problem is resolved.

Other than that you may have to resign yourself to the understanding that your own budget is going to have to accommodate this car payment for the length of the term. This is why most of the forum members say "Do not co-sign for anyone under any circumstances." There is a reason why lenders say no to people with a bad history.

The other concern is if the vehicle is wrecked the insurance company is only going to give you the book value and leave you hanging for the remainder unless you have GAP insurance through them or on the loan. All in all a bad situation with not a lot of hope of happy endings.

Perhaps you can make an emotional appeal to mom of how this is putting you in a bad situation financially and what you are having to cut back or lose because of her decisions?

[haulingthescoreup]

Mod note: although I can certainly see why this thread is on the Relationships and Money forum, there have been some suggestions that it might belong more on General Credit Topics. Although the family relationship is a big part of the problem, the questions of how this loan affects credit and what the possible alternatives might be argue for a new home.

Moved to General Credit Topics.

[Imhotrodcrazy]

What I would do is to first take the car keys so that she can't drive the car anymore.  This also protects you since it is in your name.  I would then put the car up for sale, advertise it as, "take over the payments".  I am sure there are some people out there who don't have the cash to put down on a car, who would be willing to pay a little more for the car under these  circumstances.   This way you would not be selling the car for less than you owe.  This is just another thought on a way to help you get out from under the car payments, without any money out of your pocket.  Good luck to you.  

[Anonymous]

---

@Imhotrodcrazy wrote:

What I would do is to first take the car keys so that she can't drive the car anymore.  This also protects you since it is in your name.  I would then put the car up for sale, advertise it as, "take over the payments".  I am sure there are some people out there who don't have the cash to put down on a car, who would be willing to pay a little more for the car under these  circumstances.   This way you would not be selling the car for less than you owe.  This is just another thought on a way to help you get out from under the car payments, without any money out of your pocket.  Good luck to you.  

---

I like this idea.

I'm so sorry to hear about you own Mother doing this to you. You said you would feel horrible if you took the car back, let me ask you this........does she feel horrible for completely putting you in a very bad situation, financially, emotionally ect..?

I do Wish you the Best of Luck getting this sorted.