tag:blogger.com,1999:blog-7896998645146042950.post7004710376116777773..comments2024-03-28T10:24:52.662+03:00Comments on 50 Plus Finance: Is Cosigning A Car Loan Really So Bad?David Letohttp://www.blogger.com/profile/17812482108962723457noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-7896998645146042950.post-80764132594948034282011-06-04T03:54:46.306+03:002011-06-04T03:54:46.306+03:00Bill, the car is actually in the boyfriends name. ...Bill, the car is actually in the boyfriends name. I am glad you brought that up, it didn't occur to me. I am not going to do it though my main reason is I don't have the money to. Second, I worry that they are well motivated to continue paying when it's their name on the loan instead of mine. Third, I think a lot of lessons are being learned in the process. Thanks for the comment.<br /><br />JBO, my daughter and boyfriend both are working and are able to pay the loan. But their credit is very bad from past problems. I am not financially able to pay it if a problem came up. I worry about the relationship that could occur if things went south. Thanks for the comment.David Letohttps://www.blogger.com/profile/17812482108962723457noreply@blogger.comtag:blogger.com,1999:blog-7896998645146042950.post-40033573236451234942011-06-04T02:51:54.115+03:002011-06-04T02:51:54.115+03:00I would finance a car loan for my daughter if I ha...I would finance a car loan for my daughter if I had the money to buy the car outright if something happened. If I was deeply in debt, I would not. <br />We bought our daughter a car- and put it ONLY in her name. After they were married two years my daughter put her husband on the title. <br />Don't do it if you can't afford it. <br />Personally, I would rather my child be in a car I can rely on than something I would be wondering about at 2 am when she got off a late shift at work.Janettehttps://www.blogger.com/profile/10054888725603183006noreply@blogger.comtag:blogger.com,1999:blog-7896998645146042950.post-2605223472194608792011-06-03T23:47:14.491+03:002011-06-03T23:47:14.491+03:00Deciding on cosigning a loan is an interesting top...Deciding on cosigning a loan is an interesting topic. If done at all you need to consider not only the credit risk of the borrower but also the value of the asset being financed and the debt burden that might potentially become yours.<br /><br />For example I would never cosign a home mortgage for anyone, I don't want the risk of that large a payment becoming mine. I've been asked to cosign a student loan before. I declined because of the credit risk of the other borrower but also because the education financed is worthless if a degree is not obtained. A large percentage of college students never finish their education and I won't put myself at risk for paying an uncollateralized debt.<br /><br />The one type of debt I might consider cosigning would be a car loan. The payments are low relative to my income so they would be manageable. The car has value if the first borrower can't pay, I could assume ownership of the car or sell it and take a smaller loss on paying off the debt. In addition I can more easily tell if the original car purchase is a wise financial decision. Are they buying a used base model two door or a high end fully loaded gas guzzler?<br /><br />I do agree that it can be more harmful to help someone out of a tough financial spot than it is to let them wallow through it. Perhaps your decision might have been different if they could not finance a car at all?<br /><br />One other risk I noticed that you didn't highlight was that your daughter and her boyfriend were buying the car together. I would never cosign a loan backed with two people who were dating. Forget the financial risks that they don't pay. If they decide to split up you are in for a really unpleasant situation.Billnoreply@blogger.com