In our last post we talked about serious dangers to certain auto loans when not using a reputable lender. This time we will discuss the dangers of getting a loan for a car (or anything else for that matter) from family members and friends.
Even if you are asked if you want money for a car the application may be brutal. Sure you will avoid a simple online application asking basic questions, but you may be faced with questions such as “When will you find a real job?” “Find/Leave that Special someone/Deadbeat” “When will you marry?” “Have (more) children” which we promise you will not find on our application. If you don’t believe us check here.
Your finances may even be the latest gossip in the family and beyond and you may not be dealing with an experienced lender. If you are a few days late on a payment your loved one may not be able to pay the rent, mortgage or their own auto loan payment on time. On the other hand you may find a relative such as a Grandmother with money to spare, but this can still be an issue. You may have grown to love the chewy chocolate chip cookies she makes when you visit but find you have the additional expense of emergency dental repair as Grandma is nervous about receiving her payment on time and burned the cookies. There can be strong feelings when money comes between family and friends. Having said that, even when you cannot get a loan on your own, all is not lost.
Apply for a loan and see if you qualify, it is amazing what we can do today. If you cannot qualify on your own you can talk to a family member about sharing responsibility and cosign on the loan. Your loved one will still have risks, but will not have to deal with the loan every time you make a payment. If your son or daughter who cosigned with you lives nearby you can have joint shopping trips and save on gas and make the auto loan payments easier. Just make sure you buy a car with enough space for the job. By being smart with your auto loan decision some of the most dangerous auto loans don’t have to be so dangerous after all.