Anyone know about co-signing car leases?

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unstoppable
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Anyone know about co-signing car leases?

Post by unstoppable »

For the last few leases for my mom I’ve co-signed her lease. My credit is around 830-850 range and hers is around 650-670 range (slowly improving from much worse). I know the risk of co-signing but I know she can afford the payment based on her fixed income, and it would be insignificant for me to cover the payments if I had to.

Anyways we did a lease today, and I noticed this time my name was first on the lease with hers second, although last time her name was first and I was second.

Is there a material difference? The finance person told me its how the approval goes with the credit that determines the order.

Also I noticed her car registration (has both our names, which it did on her prior lease), although now the expiration date is my bday and not hers.

Assuming I have no concerns of the payment liability of the lease (very low payments), is there a reason why I’m first and the registration is based on my bday?

Is it the way the finance guy submitted to the leasing company?

I had him first try to get her approved first alone, and it didn’t work. He was worried to do it again via co-sign as it may not work, then we would be locked out. The leasing was via Ally, where you need top tier credit.

We both signed all papers but it seems I’m the main leaser and she’s co-signing for me? Just kinda seemed backwards and wanted to see if this was just a technicality or if I needed it redone?
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ResearchMed
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Re: Anyone know about co-signing car leases?

Post by ResearchMed »

Is what you are doing any different from what it would be if you were both leasing the car, sort of as if a married couple would do it 'together'?
I'm not sure what you mean here by "co-signing".

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unstoppable
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Re: Anyone know about co-signing car leases?

Post by unstoppable »

She wasn’t able to get approved to Tier 1, so I signed as well, as I expected to. This time my name is first and hers is second. Is there any major difference?
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unstoppable
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Re: Anyone know about co-signing car leases?

Post by unstoppable »

ResearchMed wrote: Tue Apr 13, 2021 10:17 pm Is what you are doing any different from what it would be if you were both leasing the car, sort of as if a married couple would do it 'together'?
I'm not sure what you mean here by "co-signing".

RM
I was under the impression I was Co-signing the car for her. How does the above scenario potentially change anything, assuming i have zero concerns about payment liability.
neverpanic
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Re: Anyone know about co-signing car leases?

Post by neverpanic »

unstoppable wrote: Tue Apr 13, 2021 10:11 pm Also I noticed her car registration (has both our names, which it did on her prior lease)
Co-signing makes you liable for the entire lease amount.

Being on the vehicle's registration makes you potentially liable if the leased vehicle - assuming it has not been stolen - harms someone or damages property. The order of your names on that document means nothing.
I am not a financial professional or guru. I'm a schmuck who got lucky 10 times. Such is the life of the trader.
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unstoppable
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Re: Anyone know about co-signing car leases?

Post by unstoppable »

Is it normal for a Co-signer to also be on the registration as well? I had thought it was a requirement?

The thing I thought that was odd this time is usually the registration sticker is in her month but this time in my bday month. They mentioned just due to the order of the names.
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unstoppable
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Re: Anyone know about co-signing car leases?

Post by unstoppable »

The first bill came. It was addressed to me. But when signing up to pay online, I used her name, social and checking account for auto payments...
hershey102d
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Re: Anyone know about co-signing car leases?

Post by hershey102d »

Not surprising in that you have consented to each prior step . . .
Fired2020
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Re: Anyone know about co-signing car leases?

Post by Fired2020 »

unstoppable wrote: Tue May 18, 2021 4:02 am The first bill came. It was addressed to me. But when signing up to pay online, I used her name, social and checking account for auto payments...
Having worked in the industry I can tell you that you are jointly, and individually responsible for the car. If there were to be a default, the order of the names would make no difference.

I worked in collections for one of the big automakers years ago, it was an education which shaped the way I look at money. Co-signers would often respond to collection calls saying "I'm just the co-signer, you need to call my son (or daughter, or nephew, or...)."
HomeStretch
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Re: Anyone know about co-signing car leases?

Post by HomeStretch »

Do you have any liability in the event there is an accident or damage caused by the leased vehicle? If yes, have you notified your auto / umbrella insurer(s) that you are co-signer on the auto lease and listed on the registration to be sure you have coverage?
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Re: Anyone know about co-signing car leases?

Post by RickBoglehead »

neverpanic wrote: Tue Apr 13, 2021 10:44 pm
unstoppable wrote: Tue Apr 13, 2021 10:11 pm Also I noticed her car registration (has both our names, which it did on her prior lease)
Co-signing makes you liable for the entire lease amount.

Being on the vehicle's registration makes you potentially liable if the leased vehicle - assuming it has not been stolen - harms someone or damages property. The order of your names on that document means nothing.
The OP seems focused on helping Mom getting a better lease rate, because he can accept the financial liability of the lease, but ignoring the legal liability that being on the lease entails.

I wouldn't ever co-sign anything for anyone for the second reason.
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Beachey
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Re: Anyone know about co-signing car leases?

Post by Beachey »

HomeStretch wrote: Tue May 18, 2021 6:52 am Do you have any liability in the event there is an accident or damage caused by the leased vehicle? If yes, have you notified your auto / umbrella insurer(s) that you are co-signer on the auto lease and listed on the registration to be sure you have coverage?
That was my question - Is she on your insurance? I have never tried to insure two cars separately that are both registered in my name, I would think you can't?
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djpeteski
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Re: Anyone know about co-signing car leases?

Post by djpeteski »

You didn't cosign, you are a co-owner for both this and the last lease. It seems with this lease you are the primary owner, where previously your mom was. You were lied to by the car dealerships.

It seems this is common, I am active on another financial site and people run into trouble with this all the time. This occurs when there is a toxic relationship between the driver of the car and the "cosigner", but I strongly doubt this will apply to you and your mom.

While I am normally dead set against car leases and cosigning. Both make sense in this case. For older folks, with a steady pension why not lease? Yea it cost more but it is a small price to pay for a bit of luxury and doesn't tie up funds. Also cosigning for your mom is the right thing to do. She maintains quite a bit of dignity by paying the bill herself and derives a lot of joy from her child helping her out a bit.

Good work on talking care of your mom is my editorial comment.
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unstoppable
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Re: Anyone know about co-signing car leases?

Post by unstoppable »

djpeteski wrote: Tue May 18, 2021 9:41 am You didn't cosign, you are a co-owner for both this and the last lease. It seems with this lease you are the primary owner, where previously your mom was. You were lied to by the car dealerships.

It seems this is common, I am active on another financial site and people run into trouble with this all the time. This occurs when there is a toxic relationship between the driver of the car and the "cosigner", but I strongly doubt this will apply to you and your mom.

While I am normally dead set against car leases and cosigning. Both make sense in this case. For older folks, with a steady pension why not lease? Yea it cost more but it is a small price to pay for a bit of luxury and doesn't tie up funds. Also cosigning for your mom is the right thing to do. She maintains quite a bit of dignity by paying the bill herself and derives a lot of joy from her child helping her out a bit.

Good work on talking care of your mom is my editorial comment.
Thanks for the great feedback. She loves being able to pay for the car and the lower rate herself and the payments are setup in her name/SS via autopay to an interest bearing account that has the full amount of the remaining 35 payments and again I can pay the lease without a blip, so it felt safe/smart move.

I’m not on the insurance as I’m not driving it. She added to her own State Farm plan with max coverage (as required for leases, 100/300).

Do I need to do anything else? I was just a bit confused as everything is coming directly to me this time, instead of both of us.

I had thought I was co-signing to ensure even though her credit was bad, they could look at mine (843)...

Is there anything I can do after the fact?

I see others have mentioned liability, what can I do to prevent any issues. I didn’t intend to cause any issues, simply help. Happy to do anything that is needed. Her next car will be hers completely given the slow increase in her credit score.
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unstoppable
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Re: Anyone know about co-signing car leases?

Post by unstoppable »

RickBoglehead wrote: Tue May 18, 2021 6:55 am
neverpanic wrote: Tue Apr 13, 2021 10:44 pm
unstoppable wrote: Tue Apr 13, 2021 10:11 pm Also I noticed her car registration (has both our names, which it did on her prior lease)
Co-signing makes you liable for the entire lease amount.

Being on the vehicle's registration makes you potentially liable if the leased vehicle - assuming it has not been stolen - harms someone or damages property. The order of your names on that document means nothing.
The OP seems focused on helping Mom getting a better lease rate, because he can accept the financial liability of the lease, but ignoring the legal liability that being on the lease entails.

I wouldn't ever co-sign anything for anyone for the second reason.
Thanks for your insight. Is there a reason I’m on the registration? The registration is even in my birthdate, I obviously caught all of this after the fact. Is there a way to Co-sign/Co-own without being included on the registration?
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unstoppable
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Re: Anyone know about co-signing car leases?

Post by unstoppable »

HomeStretch wrote: Tue May 18, 2021 6:52 am Do you have any liability in the event there is an accident or damage caused by the leased vehicle? If yes, have you notified your auto / umbrella insurer(s) that you are co-signer on the auto lease and listed on the registration to be sure you have coverage?
I’m honestly not sure. I typically due a ton of diligence for actions like this, although simply thought I was just taking on the financial burden if payments weren’t made (low risk, as funds are coming out of an account that has the whole lease total payments).
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Re: Anyone know about co-signing car leases?

Post by Nate79 »

unstoppable wrote: Tue May 18, 2021 12:17 pm
djpeteski wrote: Tue May 18, 2021 9:41 am You didn't cosign, you are a co-owner for both this and the last lease. It seems with this lease you are the primary owner, where previously your mom was. You were lied to by the car dealerships.

It seems this is common, I am active on another financial site and people run into trouble with this all the time. This occurs when there is a toxic relationship between the driver of the car and the "cosigner", but I strongly doubt this will apply to you and your mom.

While I am normally dead set against car leases and cosigning. Both make sense in this case. For older folks, with a steady pension why not lease? Yea it cost more but it is a small price to pay for a bit of luxury and doesn't tie up funds. Also cosigning for your mom is the right thing to do. She maintains quite a bit of dignity by paying the bill herself and derives a lot of joy from her child helping her out a bit.

Good work on talking care of your mom is my editorial comment.
Thanks for the great feedback. She loves being able to pay for the car and the lower rate herself and the payments are setup in her name/SS via autopay to an interest bearing account that has the full amount of the remaining 35 payments and again I can pay the lease without a blip, so it felt safe/smart move.

I’m not on the insurance as I’m not driving it. She added to her own State Farm plan with max coverage (as required for leases, 100/300).

Do I need to do anything else? I was just a bit confused as everything is coming directly to me this time, instead of both of us.

I had thought I was co-signing to ensure even though her credit was bad, they could look at mine (843)...

Is there anything I can do after the fact?

I see others have mentioned liability, what can I do to prevent any issues. I didn’t intend to cause any issues, simply help. Happy to do anything that is needed. Her next car will be hers completely given the slow increase in her credit score.
Call your insurance company and tell them the situation, you are a co-owner of a leased car with your mom and see what they say about liability coverage or other issues.
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ResearchMed
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Re: Anyone know about co-signing car leases?

Post by ResearchMed »

unstoppable wrote: Tue May 18, 2021 12:27 pm
HomeStretch wrote: Tue May 18, 2021 6:52 am Do you have any liability in the event there is an accident or damage caused by the leased vehicle? If yes, have you notified your auto / umbrella insurer(s) that you are co-signer on the auto lease and listed on the registration to be sure you have coverage?
I’m honestly not sure. I typically due a ton of diligence for actions like this, although simply thought I was just taking on the financial burden if payments weren’t made (low risk, as funds are coming out of an account that has the whole lease total payments).
Please double and then triple check the laws in your state about auto liability.
In some states, the liability and insurance coverage follow the car, rather than the driver... meaning the car's owner(s) - unless this has changed.
Or it could be with the driver.
And does "leasing" affect any of that?

If there is ANY chance of any liability for personal injuries, you should really be covered.
You could double check with your auto insurer, who might then insist that you add the coverage (?) if it's appropriate. The car itself... value is capped. Personal injury liability? Not really capped vs. what you could or would want to pay. :annoyed

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unstoppable
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Re: Anyone know about co-signing car leases?

Post by unstoppable »

Nate79 wrote: Tue May 18, 2021 12:41 pm
unstoppable wrote: Tue May 18, 2021 12:17 pm
djpeteski wrote: Tue May 18, 2021 9:41 am You didn't cosign, you are a co-owner for both this and the last lease. It seems with this lease you are the primary owner, where previously your mom was. You were lied to by the car dealerships.

It seems this is common, I am active on another financial site and people run into trouble with this all the time. This occurs when there is a toxic relationship between the driver of the car and the "cosigner", but I strongly doubt this will apply to you and your mom.

While I am normally dead set against car leases and cosigning. Both make sense in this case. For older folks, with a steady pension why not lease? Yea it cost more but it is a small price to pay for a bit of luxury and doesn't tie up funds. Also cosigning for your mom is the right thing to do. She maintains quite a bit of dignity by paying the bill herself and derives a lot of joy from her child helping her out a bit.

Good work on talking care of your mom is my editorial comment.
Thanks for the great feedback. She loves being able to pay for the car and the lower rate herself and the payments are setup in her name/SS via autopay to an interest bearing account that has the full amount of the remaining 35 payments and again I can pay the lease without a blip, so it felt safe/smart move.

I’m not on the insurance as I’m not driving it. She added to her own State Farm plan with max coverage (as required for leases, 100/300).

Do I need to do anything else? I was just a bit confused as everything is coming directly to me this time, instead of both of us.

I had thought I was co-signing to ensure even though her credit was bad, they could look at mine (843)...

Is there anything I can do after the fact?

I see others have mentioned liability, what can I do to prevent any issues. I didn’t intend to cause any issues, simply help. Happy to do anything that is needed. Her next car will be hers completely given the slow increase in her credit score.
Call your insurance company and tell them the situation, you are a co-owner of a leased car with your mom and see what they say about liability coverage or other issues.
Can I get myself in trouble for not calling sooner? Just want to prevent any self inflicted issues. I will certainly call this week, just curious if there’s a penalty fee?

I’m still a bit confused. If I’m not driving that car and she is driving it (hardly ever) and has max coverage, why would two people need full coverage on it?
Last edited by unstoppable on Tue May 18, 2021 12:45 pm, edited 1 time in total.
jackbeagle
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Re: Anyone know about co-signing car leases?

Post by jackbeagle »

I know from a recent leasing experience that it typically takes a FICO AUTO 8 of 705, specifically, to get what are called top-tier (aka "the advertised") rates for leases. You can use credit bureaus own apps (Experian, etc.) to get all the different versions of your score.

If the primary buyer is 705 or above, I'd encourage them to apply alone. If the primary buyer is below 705, I'd still encourage people not to co-sign... :D
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ResearchMed
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Re: Anyone know about co-signing car leases?

Post by ResearchMed »

unstoppable wrote: Tue May 18, 2021 12:43 pm Can I get myself in trouble for not calling sooner? Just want to prevent any self inflicted issues. I will certainly call this week, just curious if there’s a penalty fee?

I’m still a bit confused. If I’m not driving that car and she is driving it (hardly ever) and has max coverage, why would two people need full coverage on it?
First, probably no 'penalty' (but I'm not certain), but consider yourself lucky.
... and thus do NOT wait "a few more days"... what if that horrific something happens "just before you were going to call.."

As for why 2 people should be covered?
Because IF there is hefty liability and Person A can't cover the costs (insufficient coverage, for example; no coverage as another), then... next target is Person B.
And someone might sue both, not being sure which is the right/best person to go after, etc.
What does "full or max coverage" mean? Liability could climb awfully high in some cases.
This is why some people have umbrella coverage, to add even more.

AND... if someone sues you, even if it turns out you weren't liable, you still need to defend. You want the insurer to have their good attorneys do that on your behalf.

RM
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delamer
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Re: Anyone know about co-signing car leases?

Post by delamer »

unstoppable wrote: Tue May 18, 2021 12:43 pm
Nate79 wrote: Tue May 18, 2021 12:41 pm
unstoppable wrote: Tue May 18, 2021 12:17 pm
djpeteski wrote: Tue May 18, 2021 9:41 am You didn't cosign, you are a co-owner for both this and the last lease. It seems with this lease you are the primary owner, where previously your mom was. You were lied to by the car dealerships.

It seems this is common, I am active on another financial site and people run into trouble with this all the time. This occurs when there is a toxic relationship between the driver of the car and the "cosigner", but I strongly doubt this will apply to you and your mom.

While I am normally dead set against car leases and cosigning. Both make sense in this case. For older folks, with a steady pension why not lease? Yea it cost more but it is a small price to pay for a bit of luxury and doesn't tie up funds. Also cosigning for your mom is the right thing to do. She maintains quite a bit of dignity by paying the bill herself and derives a lot of joy from her child helping her out a bit.

Good work on talking care of your mom is my editorial comment.
Thanks for the great feedback. She loves being able to pay for the car and the lower rate herself and the payments are setup in her name/SS via autopay to an interest bearing account that has the full amount of the remaining 35 payments and again I can pay the lease without a blip, so it felt safe/smart move.

I’m not on the insurance as I’m not driving it. She added to her own State Farm plan with max coverage (as required for leases, 100/300).

Do I need to do anything else? I was just a bit confused as everything is coming directly to me this time, instead of both of us.

I had thought I was co-signing to ensure even though her credit was bad, they could look at mine (843)...

Is there anything I can do after the fact?

I see others have mentioned liability, what can I do to prevent any issues. I didn’t intend to cause any issues, simply help. Happy to do anything that is needed. Her next car will be hers completely given the slow increase in her credit score.
Call your insurance company and tell them the situation, you are a co-owner of a leased car with your mom and see what they say about liability coverage or other issues.
Can I get myself in trouble for not calling sooner? Just want to prevent any self inflicted issues. I will certainly call this week, just curious if there’s a penalty fee?

I’m still a bit confused. If I’m not driving that car and she is driving it (hardly ever) and has max coverage, why would two people need full coverage on it?
If you just signed the lease today, I wouldn’t be concerned. No need to mention that you’d been in the same situation previously since you no longer are on those leases. EDIT: Just realized this thread was started a month ago.

My experience has been that dealerships require proof of adequate insurance, so they wouldn’t have let your mother take possession if there was an insurance issue.
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djpeteski
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Re: Anyone know about co-signing car leases?

Post by djpeteski »

unstoppable wrote: Tue May 18, 2021 12:17 pm Thanks for the great feedback. She loves being able to pay for the car...

You are welcome. It is easy to have a knee jerk reaction about leasing. My mom leases and it kind of makes sense for her.
I’m not on the insurance....

I see others have mentioned liability, what can I do to prevent any issues.
Are you in the umbrella policy realm? If so you probably need to have a long talk with your insurance agent and hers. You could be sued if a liability incident occurs. The result is that you may need to add her to your umbrella policy and it will probably cost you like $100 or so more dollars per year. No need to tell mom about it as might cause negative feelings for her.

Is there anything I can do after the fact?
You could always redo the financing. Even if you are an actual cosigner liability extends to you so the previous comment applies. The best part of auto financing is that there is typically no charge to redo it and companies are hungry for business.
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