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Discussion in 'Credit Talk' started by tt00, Sep 30, 2001.
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You should have got a "JOINT" loan...
"AFTER THE FACT" probably won't work...
Trust me on this one. The dealer fed you a line of bull. You should have been listed as a co-buyer with your Mom to get it on your reports. As a matter of fact what you and Mom are doing is known as a Straw purchase. Though quite common in situations like yours, banks generally frown upon them.
The insurance companies DON'T like it either.
I WOULD RE-FINANCE IT AS SOON AS YOU CAN AS A "JOINT" ACCOUNT.
Who is the Lender? That makes a big difference. I know Ford Motor Credit will sometimes do this with a buyer/cobuyer situation if all the cjecks are written from a non-joint bank account in the co-lenders name- but restrictions do apply. I highly doubt it in this case, however....you will probasbly just have to 'buy' it from your mom after a year or so. Make sure you pay by check and get a copy of each processed check as proof when you go to finance it. As far as this goes, you will prob have to wait until you are in an equity situation, which might be a bit unless you put a lot down.
Previous posters are right, this was a 'Straw Deal'- they are illegal (although I have seen many myself). If the dealer (salesperson, F&I, manager, etc) knew you were the buyer and your mom was just financing, or, God forbid, they recommended it, you can walk into the dealership and negate the deal- it's not a legal transaction. Don't laugh, I have seen it done.
IF IT REALLY IS ILLEGAL...I would go to the dealer and say something like "SINCE THIS WAS AN ILLEGAL DEAL AND I CAN WALK...HOW ABOUT RE-DOING THE PAPERWORK AS A 'JOINT' ACCOUNT"...
the dealer actually recommended it so I doubt that it was illegal. I don't know who the lender is. My mom put about 5k down on the 13,000 car, but I still could not get it in my name only (approved with me only)and my mom did not want to co-sign because it would have probably made the interest rate go up and she has a score of 700. I owe about 8 grand now. We got it on a 5yr term but I am planning to pay it off completely in 8 months. Damn needed this to go on my credit report because I have low credit score in 500's . If I refiance the loan as joint can't they increase the rate in which she orginally got it at? ( Since I got bad credit)
Also say if you do refinance as joint. Can you only do this when the 5 term( that is the term we got financed for) is up or can you do it before then? And when you do refinance do the orginal amount of the loan appear on your credit report or only what is left to pay?
I assure you it is illegal. It's called fraud. My family owns 13 dealerships, I grew up in the 'biz'. It is called a 'straw deal' and it carries VERY stiff penalties for the dealer.
Most finance companies will actually 'black-list' a dealer found to be doing this.
Wanna see for sure? Call the salesperson or F&I guy tomorrow and tell him you heard this was a 'straw deal' and it was wrong- see what they say. They will most likely deny they thought the car was for you.
The problem with 'straw deals' is they are hard to prove. Lenders try to make sure every deal is legitimate, but it is hard. For example- no 'reputable' finance company will approve a car loan without a copy of your drivers license- you don't need a loan for a car you can't drive. But, there are always ways around it, especially with unscrupulous dealers, like the one you had.
Straw deals are wrong- the deal is based on the credit, and especially, the INCOME, of someone other than the guarantor. That is just not fair to the Finance company.
tt- I am not knocking you at all. I am glad you got a car and I hope the best for your situation. I just hate to see bad dealers ruining it for the good guys.
THE INSURANCE COMPANY DOES NOT LIKE IT EITHER BECAUSE THE DRIVER DOES NOT OWN THE CAR...
I was in the same sitaution with my last car. Trust me, the bank knew I was making the payments, but they said they will NEVER report it on my credit history.