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I Co-Signed for a Car Loan But Now I Need to Get One. – Wanda

By on May 29, 2012
I Co-Signed for a Car Loan But Now I Need to Get One. – Wanda

“Dear Steve,

In 2011 I co-signed on a loan for my daughter. A few months later her fiance totaled the car. The insurance took care of everything. She was able to get another car, but I also co-signed for this one too. She’s good at making the payments. I have a 2005 Honda Element and the transmission has gone out in it. I deliver mail for a living. A new transmission will cost $4000 with a one year/36 month warranty. The cheapest used is $1000 with only a 90 day warranty. I’m debating on just getting a new car verses fixing the transmission. I can’t see putting that much money in a 2005 with no guarantee it’s not going to go out again after the warranty is gone. My credit score is between 710-720 if that makes a difference.

Will I be able to get a loan for another car with me having co-signed for one already? Thank you in advance.

Wanda”

Dear Wanda,

The determination if you can get another loan will be made by the lender after looking at your income, expenses and credit score. Your credit score is okay but not fabulous.

The fact you are a cosigner on the other vehicle does not exclude you from getting another car loan but it reduces the amount you can borrow since you are already on the hook for that other loan. When you co-sign yoga re agreeing to be 100 percent responsible for that other loan.

Ironically, new car dealers with manufacturer financing seem to be a bit more lenient about extending credit.

I’m curious if you can afford a new car payment? Can you absorb another $600 a month in your budget for the next 60 months or is an investment in your old vehicle a more affordable choice if the only thing wrong is the transmission. For the better transmission repair you could probably get an unsecured loan through LendingClub.com for a much smaller monthly payment. In fact if you apply for get the Lending Club loan let me know and I’ll be happy to help fund it.

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If your current vehicle meets your needs and is in good shape otherwise, it seems the $,000 transmission repair would be the better solution if you go the Lending Club route.

And one more thing moving forward, no more co-signing, please.

Please post your responses and follow-up messages to me on this in the comments section below.

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About Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

One Comment

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