Re: Cosigner

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Posted by Bob on May 24, 2001 at 01:03:55:

In Reply to: Cosigner posted by renee1la on May 22, 2001 at 19:49:58:

Check the fine print on the contract. It seems that there might be some serious difficulty attempting this, since the primary purchaser would be the registered owner of the car (with the bank or finance company being listed as a lienholder.)

Another important point is that, when cars are repossessed, either forceably due to a default, or "voluntarily" due to the purchaser anticipating a default, the car is often *not* worth as much as the remaining balance on the loan. A car depreciates (becomes worth less money) substantially the moment it is driven away from the dealer, since it suddenly becomes a used car instead of a new car.

If the owner still owes $5000 on the loan, but returns the car, and the dealer then auctions it off for $3000, then s/he will be liable to pay the difference, which is called a "deffinciency." And if there was a co-signer, that person will also be liable for the defficiency. If the defficiency amount is high enough, the dealer/bank/finance company might file a lawsuit against the original purchaser and/or the co-signer.

So if you are the co-signer on a car loan, and you are somehow able to return the car (either with or without the primary purchaser's consent), you would be setting yourself up to personally owe money on it.

Here Is An Article About Co-Signing For Loans

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: Check the fine print on the contract. It seems that there might be some serious difficulty attempting this, since the primary purchaser would be the registered owner of the car (with the bank or finance company being listed as a lienholder.) : Another important point is that, when cars are repossessed, either forceably due to a default, or "voluntarily" due to the purchaser anticipating a default, the car is often *not* worth as much as the remaining balance on the loan. A car depreciates (becomes worth less money) substantially the moment it is driven away from the dealer, since it suddenly becomes a used car instead of a new car. : If the owner still owes $5000 on the loan, but returns the car, and the dealer then auctions it off for $3000, then s/he will be liable to pay the difference, which is called a "deffinciency." And if there was a co-signer, that person will also be liable for the defficiency. If the defficiency amount is high enough, the dealer/bank/finance company might file a lawsuit against the original purchaser and/or the co-signer. : So if you are the co-signer on a car loan, and you are somehow able to return the car (either with or without the primary purchaser's consent), you would be setting yourself up to personally owe money on it.

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