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add wife as AU and co-sign to get her a new car or not a good idea?

Frequent Contributor

add wife as AU and co-sign to get her a new car or not a good idea?

So my wife and I have been married for about 6 years and have five childen together.  (5, 3, and 2 year old triplets).  When we first met, I had good credit and she had, let's be nice and call it bad credit.  She'd get credit cards, run them up, and then just throw away the statements without even opening them.  We weren't married, so I had no idea until she got certified mail at my house because she was being sued by Capital One.  I did convince her to respond to the suit, but then she didn't go to court and got a default judgment.  What started as a $700 bill turned into somewhere in the neighborhood of $3500 and she just decided to ignore it.  No job, no income, we weren't married at the time, so whatever.  She also had several other credit cards that were maxed out and charged off.  

Her grandma co-signed on a car loan for her and I think she made the first payment.  After that, her gma did some, I did some, and eventually, we agreed that she would trade it in and I'd lease a new car for her.  (We were married by point).  Long, drawn out story just to paint the picture that her credit sucks.

After we had our triplets, I was introduced to things like deductibles, out of network, and exceeds maximum benefit.  Hospitals are expensive, and when there are three births, they're more expensive.  Add a NICU stay and its just gets stupid.  My credit score allowed me to get credit cards to pay regular bills while using my income to send payments to the hospital.  When that wasn't enough, I emptied our savings account to settle some of the bills.  When that wasn't enough, I stupidly raided my 401k.  About a year after the triplets were born, I was maxed out, broke, and still had an ungodly amount of money owed to the hospital ,so we decided that bankruptcy was the only real option.  

We filed, and included everything.  Medical bills, upside down car loan/lease for our vehicles, and the credit cards.  Since my score was already good, my score tanked, but it still dropped to the mid 500s.  Hers went to the low 400s.  

My goal became to immediately get started on rebuilding my good name so that we can get a house in two years.  It was a bad moment in my life, but I don't regret filing, and it does make me feel better that I am able to contribute to savings and 401k again.  I've got one credit card I got from USAA.  Should I add my wife as an AU to the account since she's got a clean slate now?  We have two older cars now that are paid for, an 05 Toyota Sienna and an 00 Honda Odyssey.  I'm fine with driving he Odyssey for the foreseeable future, but she's already talking about wanting to get a new Sienna or a new Odysey.  I'm enjoying the savings of no car payments and liability only insurance.  I can't imagine the terms would be favorable right after a bankruptcy that included two cars.  The odyssey has almost 200k miles on it and the Sienna has just under 80k.  The fact that shes wanting a $40k car this soon after bk concerns me.  Financially, I can afford it since I don't have medical bills anymore, but I don't ever want to get into that position again. I want to concerntrate on maxing out my savings, not spending to keep up with appearances, if that makes sense.  



Gardening until further notice
Message 1 of 7
6 REPLIES
Frequent Contributor

Re: add wife as AU and co-sign to get her a new car or not a good idea?

It sounds like her habits haven't changed and she doesn't have any interest in building credit other than to burn through it again. Sure add her as an AU for the trade line, but I wouldn't offer up a physical card. People keep bailing her out and she hasn't been able to learn many lessons.

It's hard for me to comment on this as I don't want to say bad things about your wife. The nicest thing I can say is she needs counseling. You are a family and these decisions affect at least 7 people + nice grannies.
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Message 2 of 7
Regular Contributor

Re: add wife as AU and co-sign to get her a new car or not a good idea?

Wow that sounds like quite the nightmare! You've gotten through it though, so I would suggest to not take on any more debt - especially for a new car! Even the cars that depreciate the slowest will still lose tons of value in a very short amount of time which is not very wise considering how recently you filed BK. If you absolutely need newer wheels to replace the Honda, buy a certified pre owned one that's about half what a new one costs and comes with a long warranty. New cars are a luxury item regardless of cost IMO, and it sounds like you should focus on savings, 401k/IRA, and a rainy day fund instead of throwing away tens of thousands of dollars in a couple of years for depreciation and interest charges (which the interest rate will likey be high considering recent history unfortunately). I'm not slamming you because it sounds like you're the one working hard to keep the family afloat financially, but I think your wife needs to readjust her expectations and focus on what's smart and right for the family long term. 

Message 3 of 7
Community Leader
Super Contributor

Re: add wife as AU and co-sign to get her a new car or not a good idea?

Sorry to hear about your troubles. Going by  what you posted, I'd get her a secure card instead in just her name and not add her on your USAA card. The reason being anything she does with USAA card will affect you and since you are rebuilding, you don't want to compound the problem further by adding her as AU since she hasn't proved to you that she can be responsible with credit.

 

Secondly, if the Sienna only has 80k miles, why does she want a new car? Is the new car a "want"or a "need"?. I suggest you stand firm and not get her a new car until both of you and your family are in a must better place financially.

 

All the best.

Message 4 of 7
Valued Contributor

Re: add wife as AU and co-sign to get her a new car or not a good idea?

Often when we become parents we finally understand it is not all about us.

I am no marriage therapist but suggest you find a way to get her on board with team Family. She has a long history to overcome and for the sake of 5 kids. 

Message 5 of 7
Valued Contributor

Re: add wife as AU and co-sign to get her a new car or not a good idea?

I wouldn't add her as an AU. Too many risks with no signs of improvement. If she makes mistakes and brings down your situation, it will only make things worse. I would, however, work with her on getting better and showing her how much it is worth it.
                                                                  

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Message 6 of 7
Highlighted
Regular Contributor

Re: add wife as AU and co-sign to get her a new car or not a good idea?

You need to make financial goals with her and try to keep her into the loop and bring her in as a partner and get her on board with life goals.  Only when she feels she is apart of the team will she be willing to make financial sacrifices and change her thinking.  It speaks a lot she probably has her handsful with the kids, but get her on board and explain to her why we do x, why we don't need a new van when we can get a good one for 10-15k and pay cash for it.  She might just be a natural spender, and no one really emphasized the importance of saving and not keeping up with the Jones' to her. 

Message 7 of 7