Vehicle Purchase Financing Difficulties
In the event when a customer’s income or credit history is not sufficient to finance a vehicle purchase, finance companies will accept the contract if there is a second individual called a “co-buyer” or “co-signer”. The co-signer has to signs the contract as well. The fraud here occurs when the car dealer fails to tell the co-signer about the responsibilities they are accepting. Car dealers tell the co-signer that they are simply used as a “reference”.
However, if the payments are not made, the co-signer’s credit can be affected, debt collection efforts can be made against the co-signer, and the co-signer can be sued for the payments that are owed. In other words, the co-signer is equally responsible for making the payments on the vehicle. Only sign a contract as a co-signer if you are prepared to accept these responsibilities.
If you are a co-signer of a vehicle purchase contract and the car dealer misrepresented your responsibilities, you should consider the following:
- First of all, you should get a copy of your credit report to make sure that there are no negative references on your credit as a result of the loan;
- Contact the finance company, explain the fraud that has occurred, and try to get your name off the loan;
- If the finance company refuses, talk to the buyer and see if the loan can be refinanced to take your name off the financing;
- If you find that your credit has been negatively affected, get legal help.