Car buying question

[bradford702]

Long story short in 2007 I bought a used car and six months later got a company car. My sister took over payments because she needed a new car and her credit is bad. Well it looks like I might be losing my company car. My sis has stated sheight like a different car and give me back mine. I have no prob with that. The only thing is that her credit still sucks. I want to help her because she helped me. I could not of sold my original car without being upside down. So do I

1 buy a car for her in my name?
2 buy a car for her In my name with her a co-signer?
3 buy a car in her name with me as a co-signer?

She has not missed a payment since she has has the car and her earning ability has increased. She is cleaning up her credit but it still suxs. I am not sure of the interest implications if try to put her on the note. I would like to help her establish positive credit. I have no worries about getting shafted by her. Just trying to help her out.

 

[Bernard]

You feel like you owe her. You want to hlep her out. Great. But how big a hit are you really willing to take? What kind of car does she want? What kind of car does she need?

I just flat out bought a car for a guy back in June. He needed some help. It was a 1990 Accord for $650. Runs like a top. AC blows cold but it smells like a farm when the AC is on. At that price, I just made it a gift.

About 15 years ago I bought a car for a girlfriend that I was about to break up with. She wrecked her CRX. Totaled. Post deductible, she got a check from the insurnace company for $50. She had no money for a down payment and poor credit. She wanted an $18k VW. She got a $3,500 MR3. I took out a signature loan at my bank and she made all the payments over 1-2 years. It ended up not costing me a dime, but I went in with eyes wide open and was comfortable with the fact that I might have to make all the payments myself.

As long as your eyes are wide open, it's best that the car goes in her name with you as co-signor. That way the payments are recorded under her name and eventually help raise her credit score.

The reason I didn't follow this same advice with ex-GF was that her credit was so bad that Texas Commece Bank wouldn't even give her the loan even with me as co-signor. They said they's give the loan (car loan or signature loan) to me only.

Bernard

 

[texascoder]

Keep in mind that if you co-sign a loan for someone, it goes on your credit report too. At least that's what has happened when I co-signed a car loan for my daughter.

 

[nashhorn]

Like my departed Dad used to say, "it's family, you do whatever and don't look back".
I admire your sentiment and agree with Bernard. Put in her name with you as co-signer. You should have some say in NOT letting her go for more car than is appropriate for the situation. A reliable older used car should be in order. Lots of nice ones out there that will set her up and build her credit.
Good luck, and good for you.

Hookem

 

[bradford702]

She is looking at older cars and cheaper than the payment she is currently making on my car. Will I pay a higher interest rate with her on the note? I am not sure if a point or two higher on a $12000 note would make that much of a difference, if it helps her est good credit.

 

[HornBud]

You co-sign for her. It doesn't really make a hill of beans difference, in most cases the bank will use the best credit to determine interest rates. Now, there are exceptions. Is her credit just bad/shakey, or is it more like she's a credit criminal? In otherwords, does she have a lot of late pays or a lot of charge offs?

Best advice would be to consult the finance officer at the dealership or the loan cat at the bank. Find out what the money will cost you/her with both of you on there vs you alone. If there's a slight surcharge for her getting her credit back together then consider it cheap restitution.