My buddy has asked me to help him financing a new car. He wants me to co-sign since i have good credit.

Question:
1) If he is not able to continue payment, will i get bad credit?
2) In case of a big accident which his insurance won't conver enough, will I be liable?

 

1. yes, only if the bill has a late payment and goes through collections.

2. You would be liable only if your friend doesn't agree to pay it all or refuse to pay.

I work with people day in and day out with purchasing a car..my advice is make sure you know him well. I wouldn't recommend any "friend" cosigning. I've seen it all.

 

so i would only be liable if he refused to pay for the accident. If he agreed to pay and not financially capable, will they go after me?

 

accident? what kind do you mean? If he had automotive insurance, depending on coverage, there is a minimum in each state you have to get. This would pay for both parties in collision and bodily damages. What i recommend is for him to raise the coverage to let's say 150k just to make sure and pay a bit more each month for insurance if you are scared of something like this happening. Which i totally understand. I've seen rare cases like this. Either hitting an expensive car and also hurting the party of the other car where all damages amount over the maximum of coverage on the insurance.

 

Stop right there. Bad idea. Very bad.

 

Do not co-sign. Unless you're helping family. My sister used to be an auto loan officer, and she told me so many stories with friends co-signing and even family, but what can you do if you're family. You wouldn't believe how many repo's that financial company had every month. lol. She had to bring some home to park because they didn't have enough room. haha.

 

Correct. The car is totalled. The insurance company settles for $20,000. The loan balance is $30,000. Your buddy says screw it. The lender comes after you for $10,000.

 

I agree with superblack350z and davidv. Lots of things can happen in the time it takes someone to pay off a car and the last thing you want is to be listening to all kinds of excuses from your BFF about why he cant pay for it.

Chris

 

Bottom line is he shouldn't be co-signing because its too risky in almost every aspect.

 

Do NOT do this.

 

Yeah, no.


Don't do it. You co-own the car and are financially responsible for it.

 

DONT DO IT. My cousin did it with a "good friend." Well, the friend stopped paying and she did not know about it. They started coming after her. She could not pay it, so her credit got screwed.

 

dont do it

 

The co-signer has the same responsibility and liability as the prime borrower. If he doesn't pay, you are responsible for taking care of teh debt. If neither of you pay, then both your credit records will reflect a re-posession. Not good!

bill

 

If you have not got the hint from above, someone would have to be out of their mind to co-sign on any loan and particularly a car loan.

Tell your buddy a good friend should understand the risk & liability issues and not even ask.

 

theres probably a reason your friend has bad credit and cant get a loan himself.

BAD IDEA!!!!!!!!!!!!!!!!!!!!

 

I make it a general rule never to mix friends and money. All it does is ruin friendships in the long run. Even bringing family into it can be a very bad idea.

If he is upset that you won't do it then he is just being a user and not a true friend

 

I think everyone else's responses pretty much sums up mine. Not worth it at all. Tell your buddy that you can't and that he should save up to buy the car in full or better yet, work on repairing his / her credit before taking on more on someone elses dime.

 

If you want to remain his buddy, I say you don't do this.