Auto loan w/ co-signer

[DooBaba]

I think I posted this is the wrong forum intially, mea culpa! So my credit is shot out pretty badly, and there is no way I can secure a *reasonable* auto loan on my own. We recently were able to restructure our debt, which has freed me up to purchase a new car...a necessity, not a luxury. I have a co-signer willing to put their name on the loan, but I have been told by the bank/credit union that co-signers are for people with little-to-no credit or someone right on the cusp of this interest rate or that one. But for people with good income, I make $80k + and my wife makes $75k, and poor credit, a co-signer will not make the deal. The co-signer is a family member and knows I can make the note (I have a current note on which I have never missed a payment in three years), and has offered to purchase the car on their own, using auto-draft from our credit union to make payments. Apparently this is illegal; the union told me it is considered a "straw purchase", where someone with good credit secures a loan for someone with poor credit with no intention to use the financing for themselves.

 

I guess my question is this: how can someone with credit like mine (500 or so) purchase a new car with a co-signer who has 800+ credit? The co-signer has an income of around $80,000 / year, roughly $19,000 of which is tax-free...if this matters.

 

For further review - I have a contingency question: say we do figure this out, we will have roughly $10k to put down. My wife owns her car out right, but she wants mine, a 2005 4Runner, on which I owe, you guessed it, $10,000. Should we a) pay off my existing note or put the $10,000 towards the down payment on the new car? Or c) put down a chunk on each?

 

Thx

Edited July 17, 2012 by DooBaba

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[MarvBear]

Just put 10K down on the vehicle you wish to purchase. Both you and your wife should sign jointly.

[DooBaba]

Just put 10K down on the vehicle you wish to purchase. Both you and your wife should sign jointly.

 

Her credit is poor, as well. Long story, but '07/'08 were not good for us.

[MarvBear]

Some dealer's then got 10K reasons to get you some kind of loan. 07-08 were not kind to a lot of folks.

[DooBaba]

Some dealer's then got 10K reasons to get you some kind of loan. 07-08 were not kind to a lot of folks.

 

Right...with interest in the 12 - 15% range, if not higher. Gotta avoid exorbitant rates, and I'm trying to figure out if it's even possible w/ a co-signer.

And if so, how.

[MarvBear]

Normally in automotive lending a co-maker will not make up for poor credit. A straw purchase is not illegal, except if were made with intent to defraud the lender or misrepresent the loan to the lender.

[KYBOSH]

You mentioned you had some loans restructed. Was this, by chance HARP, HAMP or any of those home save programs? Im interested in knowing if those programs (and the way the reflect on your credit reports) is partly to blame for the low scores.

 

Thanks in advance

[DooBaba]

You mentioned you had some loans restructed. Was this, by chance HARP, HAMP or any of those home save programs? Im interested in knowing if those programs (and the way the reflect on your credit reports) is partly to blame for the low scores.

 

Thanks in advance

 

We were able to restructure the debt as a whole, not the specific loans/cards. Private infusion, not either of the programs you mention.