What would you do? (financial advice - please)

[Lady Cluck]

Hi Guys, I'm in a difficult predictament, and wondered if any of you could look at this objectively and offer some help.

Without my knowledge, my husband co-signed on a loan for a new SUV. The person whom he co-signed for was not especially credit worthy, and the dealership obviously did not want to sell to him. When it came time to sign papers, the salesman directed the buyer and my husband who was to be the co-signer, to sign on the wrong lines, which in effect made my husband the buyer, rather than the co-signer.

I understand that because of my husband's carelessness, we are now stuck paying for an expensive car that we don't need, and really can't afford. On top of now having a second car payment, even with our good driving records, the insurance on an SUV is outrageous. At 2.9%, getting a refinance with a better loan rate is not an option. We owe more than the value of the car, so we can't sell it or trade it in without taking a big loss. The dealership will not take it back. Our attorney says husband signed a legally binding contract, there is nothing we can do except be more careful in the future.

I love my husband, but sometimes he can be such a dim bulb. Not that anyone else's spouse would actually do something like this, but if you were caught in this situation, what would you do? Are there any options open that we have not considered? Are we stuck with this white elephant?

 

[septbride2002]

Wow - and my question is - where did you hide your husband's body?

It sounds like you don't have many avenues. If it was me and I had the equity available in a house I might take out a HELOC and payoff the car loan and then try to sell the car outright. Any loss you take can still be held with an interest only HELOC and then at least the interest is tax deductable.

Other then that I've got nothing.

~Amanda

 

[mudnuri]

well.....since you didnt say this in your post- 1st thing was i'd make sure you had the SUV and not the other guy

How long ago was the puchase made? days, weeks? Some states have a 72 hour period after a purchase is made to return it with no penalties.

do you have another car you can sell? That way you would be paying for the rig your driving? Your overall insurance might still go up- but you'd be 1 less car?

Now my question, if your husband got 2.9% why did they even have a co-signer? If the guy was not credit worthy- your husband must be. Generally though, they wont use a co-signer if the owner has credit?

I really dont know what else to say...good luck!....and I betchya your DH wont be doing this again in the near future!

Brandy

 

[EsmeraldaX]

No real advice. I hope everything works out, even if you have to cut your losses and just sell it for what it's worth.

 

[ksjayhawks]

Make sure that you have the car. Sell it and pay off the loan. Write this off as a hard lesson learned!

 

[Lady Cluck]

Thanks Mudnuri, yes, we have the car. I'm driving it, and have no complaints. The car itself is very nice, and the 12yr old Pontiac I was driving was on it's last wheeze.

We didn't know there was a problem with the paperwork until several months had passed. The other guy had the car. It was one of those sucker deals from the dealership - make no payments for X months. Well, not being especially astute, he didn't. When the payments started to actually become due about 4 months down the road, we started getting calls from the finance company, and couldn't understand why they weren't calling him instead. By then, the 72 hour "buyers remorse" period had long since passed. We do have a Dodge Dakota that will be paid off in about 18 months, so at least if we have to tighten our belts, it will only be until early 2006. We can probably tough it out until then if we have to. We do own our house free and clear, so we have plenty of equity, but taking out a loan against the house would be a last resort.

I was not in on the financial arrangements, so yes it does seem a little suspicious that the loan for a person who is not credit worthy has only a 2.9% interest rate. The other guy had credit, but certainly not good enough to go buy a new car from a dealership. That he was a previous Mitsubishi buyer might have had something to do with it. The dealerships sometimes offer better deals to returning customers, like lower interest or special maintenance offers. He was trying to trade in the other car and replace it with this one. On top of the screw up with the paperwork, after the signing on the new SUV, the salesman came back with "Oh, sorry, we can't take your other car in trade, you still owe too much on it." The other guy is still making payments on the 1st Mitsu.

My hunny is the kind of guy who goes out of his way trying to help people. He has a good heart, but is not good at figuring out that there are people out there who will use you if they can, and not think twice about it.

Thanks for the hugs. If we miss our trip to WDW next fall, you'll know why

 

[Dan Murphy]

 

[mudnuri]

My hunny is the kind of guy who goes out of his way trying to help people. He has a good heart, but is not good at figuring out that there are people out there who will use you if they can, and not think twice about it.

Oh boy do I know this feeling! The last company DH owned with his brother, he co-signed a loan for one of his employee's for a vehicle. Until then either he or his brother had been driving this guy to work. Then his wife came to work for us, in the office. Co-signing wasnt that bad of an idea at the time- we just had the payments directly deducted from their paychecks. Not a bad thing. Well, then we sold the company. No longer could we dock the pay...this was all done with their knowledge, they knew going in we would directly remove the money each week.

We got a call a few months later, that the truck was at a risk of being repo'd. So, DH's other brother hired the guy as a truck driver, and now he's pulling the money out each week. Geez, ya be a nice guy and ya get kicked in the teeth for it!

Brandy

 

[miste76]

Something sounds fishy here... these salesman go through the same paperwork over and over again, this doesn't sound like an honest mistake... If things truly happened as your husband says they did... then this dealership has done this before and will do it again. They should be reported!!! BBB may be some place to report them to. I would also make sure that the comapny is aware of what is going on... and that even though you are going to deal with it this time, something needs to be done within the company about it.

 

[missyc]

I don't think it really matters who's name is on which line. If the owner defaulted, the cosigner is held responsible..... Right?

 

[Lady Cluck]

No, this was no "honest mistake". I wasn't there when all of this transpired, but am fairly certain that the salesman knew exactly what he was doing. The dealership doesn't care. We already reported this to the BBB. The intent of the buyers at the time of signing apparently makes no difference, and it becomes our word against theirs. The contract was legally signed, so they don't care, either.

The first thing I did when I started driving the car was to replace the dealership's license tag frame.

Just crying about "spilled milk", I guess. Thanks for the vent.

 

[poohandwendy]

With a low interest rate, and if it is a decent car...I would probably sell the other car you are making payments on and use the proceeds to buy an older second car (that way- no second car payment and low insurance rates).

But that may not make sense for your situation. Exactly what vehicles do you have right now, how old are they and what do you own vs paying a loan?

 

[MeanLaureen]

Call the lending institution who owns the loan and see if they will allow you to sell the loan to someone else that they deem credit worthy. If so, then advertise the car for "take over payments" only. If you aren't asking for money on top of that, someone just might jump at the deal.

Good luck

 

[momsgonwild]

The fact that you only have eighteen months left on your second car payment makes me wonder if you can go to your bank, or credit union and consoidate these two loans together. Most interest rates are little higher than 2.9%, but if close to this, could lower your total monthly payment for both vehicles considerably. There may also be the possibility of financing for 72 months instead of the normal 36 or 60 months. Only use the new vehicle for collateral if poss. As far as the insurance, I don't know your finances, but the higher you go on your deductible, the more inexpensive the insurance. Some insurance companies will go as high as a $1000 deductible. If you have the $1000 in savings, this could also save considerable amount. I think you got a bad deal, and wish you much luck!

 

[my3kids]

Originally posted by missyc
I don't think it really matters who's name is on which line. If the owner defaulted, the cosigner is held responsible..... Right?

Exactly! Doesn't matter where you sign on a finance document....if you sign, you are responsible.

If you don't want the car, sell it and take the depreciation as an expensive lesson.

Whos' name is on the title of the car, in addition to the finance papers? Make sure the car is actually in your husband's name and not their joint names, or one couldn't sell without the other's signature. Also, look into the insurance issue. If the car isn't in your family's name, will your car insurance be responsible for the liability if in an accident? I'd bet if it is in the other guy's name, he isn't particularly concerned with keeping insurance payments up to date.