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TheGodfather414

Can You Get 2 Auto Loans

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oIs it possible to get 2 auto loans through the same finance company? I was with a friend today when she tried to get a 2nd car through TOyota financial. She wanted to get it for her parents, who have poor credit. Both vehicles would be listed completely under her. She makes $70,000 per year and has had the vehicle she is driving for 3 years and paid 2 weeks ahead of time every month since getting it in August of 2009. They told her no because they do not want her having 2 loans out at the same time. Would she had been better off not going to a toyota dealership?

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That's illegal. You can't purchase a vehicle for someone else. To answer your question yes a person can have two auto loans if their credit and income supports it. What she should do is co-sign for one of the parents. That will get them the car they need and help build some credit in the process.

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That's illegal. You can't purchase a vehicle for someone else. To answer your question yes a person can have two auto loans if their credit and income supports it. What she should do is co-sign for one of the parents. That will get them the car they need and help build some credit in the process.

 

I am not understanding how it is illegal. What would be the difference if she purchased a vehicle for her son/duaghter? She is going to take full responsibility for the vehicle, including paying for it. Its not as if she is selling it to them at a higher price.

THanks for your help, I just don't honestly see why a person can't have 2 vehicles financed, and let whoever they want drive it.

 

 

Also, would it be easier if she went through a different finance company?

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I guess it depends on the finance company? I have two auto loans that are solely in my name. So, I think it just depends on the company and your credit/income.

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That's illegal. You can't purchase a vehicle for someone else. To answer your question yes a person can have two auto loans if their credit and income supports it. What she should do is co-sign for one of the parents. That will get them the car they need and help build some credit in the process.

 

:blink: ... moving right along...

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oIs it possible to get 2 auto loans through the same finance company? I was with a friend today when she tried to get a 2nd car through TOyota financial. She wanted to get it for her parents, who have poor credit. Both vehicles would be listed completely under her. She makes $70,000 per year and has had the vehicle she is driving for 3 years and paid 2 weeks ahead of time every month since getting it in August of 2009. They told her no because they do not want her having 2 loans out at the same time. Would she had been better off not going to a toyota dealership?

 

It's a little tough (not to mention cost prohibitive) to get two car loans in one person's name. I would expect that if her DTI supports it and her credit is good enough it could be done. I would not expect the same lender to finance the second vehicle and I would not expect top tier rates. Maybe try a CU.

 

My wife had two sizable car loans in her name and they were through separate lenders. The rate on the second loan was about 3% higher.

 

IMO though, it's generally not a great idea to buy a car for someone else, let alone co-sign, or mix family and credit. That's just a personal opinion though. She will have to make her own decision on that.

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That's illegal. You can't purchase a vehicle for someone else. To answer your question yes a person can have two auto loans if their credit and income supports it. What she should do is co-sign for one of the parents. That will get them the car they need and help build some credit in the process.

 

I am not understanding how it is illegal. What would be the difference if she purchased a vehicle for her son/duaghter? She is going to take full responsibility for the vehicle, including paying for it. Its not as if she is selling it to them at a higher price.

THanks for your help, I just don't honestly see why a person can't have 2 vehicles financed, and let whoever they want drive it.

 

 

Also, would it be easier if she went through a different finance company?

 

 

Buying a car for another adult is called a straw purchase. It is bank fraud. That is why it is illegal. That's probably why the dealer said they couldn't do anything. If credit score and income justify the loan Toyota won't turn down a second loan.

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If she has the income to support it and makes the payments, is it still a "straw purchase"?

Edited by road2freedom

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oIs it possible to get 2 auto loans through the same finance company? I was with a friend today when she tried to get a 2nd car through TOyota financial. She wanted to get it for her parents, who have poor credit. Both vehicles would be listed completely under her. She makes $70,000 per year and has had the vehicle she is driving for 3 years and paid 2 weeks ahead of time every month since getting it in August of 2009. They told her no because they do not want her having 2 loans out at the same time. Would she had been better off not going to a toyota dealership?

 

 

Not sure if this has been rehashed yet, but there are a few issues that may come up.

 

#1) I work with Toyota Financial on a daily basis, and they may be looking at the total amount of loans outstanding. For example, if she currently has a $30,000 loan and is requesting to borrow another $30,000 then they will be looking at the total of the loans outstanding because if something unforseen were to happen (loss of job, medical issue) then they would have a lot of money that they are going to have to charge off.

 

#2) This is what us in the auto finance industry refer to as a "straw deal". While im sure its been mentioned that it's illegal, no finance manager or director (including myself) would jeopardize a business relationship by concealing to a bank that a vehicle would be for someone else. We loan Toyota's money as if it was our own, and do everything we can to look out for them.

 

That said, I would definitely take the angle of trying to use her as a cosigner for one of the parents (preferably the one with the highest FICO) and just explain the situation "hat in hand" to Toyota. Toyota Financial is most likely to be understanding to her parent's situation, and is more likely to help when presented with a truthful situation up front. They realize things happen, circumstances cause people to hit a bump in the road, and its a lot easier to have that conversation then to be put in a situation to loan money to someone who isn't going to be driving or paying for a vehicle.

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If she has the income to support it and makes the payments, is it still a "straw purchase"?

A straw has nothing to do with income. It's based on the fact that the vehicle (collateral) isn't for the buyer. That's why I said she should just co-sign for the parent with the highest score and i'm sure one of the banks like Wells Fargo or Capital One will offer them a loan.

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Every Dealer Finance Agreement we sign with any lender has a "straw purchase" clause in it. And I don't think any of us professionals in the automotive industry would risk a long term relationship for this reason being discussed.

 

Many companies are risk averse and may have a policy about multiple auto loans with the same consumer, because there is always a reason why they want it.

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I just got two auto loans from the same company 10 days apart. The second loan asked for a slightly larger down payment and was the interest is 0.2% higher than the first. One car for me, one for my mom: who lives with me, is my dependent on my tax returns, is on my insurance policy as a covered driver, but is not owner of the car. And the finance company knows this. It is not considered a straw purchase. Now, if she lived elsewhere, was not my dependent and was not on my policy, different story.

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Yes, if the lender has been led to believe the borrower is making the payments. That's a material misrepresentation.

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They want you to be the one driving it, so you would be more interested in it not getting repossessed. That's the same reason why it's harder for an individual person to have two car loans at the same time, the banks figure when push comes to shove you might decide to just let one of them go.

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Is it still straw if the car is titled to the borrower?

Yes, the borrower isn't who the car is for. That's where the straw comes in at. The scenario mentioned above where the guy purchased a car for his mother who lives with him and is listed as his dependent would not be considered a straw. If the person is not an immediate relative (with dependent status) who has the same permanent address it is a straw. Sure it happens all the time. But any honest guy who respects his relationship with the finance company is going to say buy somewhere else.

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Is it still straw if the car is titled to the borrower?

Yes, the borrower isn't who the car is for. That's where the straw comes in at. The scenario mentioned above where the guy purchased a car for his mother who lives with him and is listed as his dependent would not be considered a straw. If the person is not an immediate relative (with dependent status) who has the same permanent address it is a straw. Sure it happens all the time. But any honest guy who respects his relationship with the finance company is going to say buy somewhere else.

 

 

What if the person is an Immediate relative, lives with that relative, but is not there dependent? I have a friend that I believe did this would they still be in violation?

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