My Neighbor asked me to Co-sign a Loan for his son’s new car. Should I do that?

If a neighbor asked me to do that, I suppose my first response would be, “And why are you asking me?” The father ought to co-sign for a son’s new car if anyone should. What sort of relationship do you have with your neighbor for him to even think about asking you, after all?

The response to this query is “None of your business” after you have replied “No,” but I would be very interested to hear why a son who requires a co-signer to obtain a car loan chooses to purchase a new vehicle as opposed to a used one.

I personally have a big problem with young people who have an overly inflated feeling of entitlement and want everyone to step up and give them the best of everything without them having to sacrifice or fight for it. Because Mommy and Daddy are still paying for everything, 25-year-old unemployed people manage to drive late-model cars and have the newest cell phones, for example. Parents should be embarrassed of themselves for having fostered and still having fostered that spoiled-brat mentality of entitlement, and young adults should be ashamed of themselves for still sucking off their parents.

You should never co-sign a loan for anyone, is the short answer to your query. Rarely does it work out nicely.

The fact that my mother declined to co-sign for a used automobile loan for me served as a wake-up call to how dire my own circumstances had gotten.

I’ve always been the ideal daughter for my parents. I did well in school, never sneaked a beer or tried drugs, and I graduated from high school as a virgin. As soon as I was old enough to own and maintain my own ten-year-old clunkmobile, I began working minimum-wage jobs. Never had children and completed college in four years without accruing any debt. 

Within six months of graduating, I moved out to my first job in the city and my first cheesy slum apartment, where I stayed for ten years while scrounging and saving money to use my A1 perfect credit scores and down payment to secure the mortgage on a fixer-upper without the help of my parents or anyone else. I waited to get married until my fiancé and I could afford to pay for our own ceremony, reception, and honeymoon. I never asked my parents for anything, and the only money they ever gave me was Christmas money, which I almost always kept for a special occasion.

I believed that my financial background would somehow be taken into consideration, at least by my family. I mean, prior to my problems, I had never even tried to swindle someone out of a $20 lunch tab. But when I begged my mother to co-sign a loan for a used automobile out of desperation, she refused.

We foreclosed on the house my husband and I had bought jointly, a house for which the down payment had been made with the proceeds of the sale of my fixer-upper, due to no fault of my own due to chronic unemployment and my husband’s alcoholism in the wake of the 2008 Great Recession. In other words, I had already invested the 10 years of money I had made while living in the shithole apartment plus five years’ worth of savings on day freakin’ one of the mortgage for “our” home.

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I had already invested the ten years’ worth of savings that I had amassed while living in the squalor apartment and the five years’ worth of payments I had made on my fixer-upper, which included $20k in repairs and renovations that I had paid for over the course of two years while working 20 hours per week at a second job. In addition, since my husband lost his job, I was solely responsible for making the mortgage payments on “our” house. Even though it was “our home,” it was “my money.” I lost almost everything I had ever worked for when we lost the house.

The long-term loss of my husband’s income plus the additional costs brought on by his drinking made it difficult for us to maintain a budget, and foreclosure was the last resort.

He used my stolen credit cards to pay for hotel rooms, pizza, and drinks. I was finally unable to repay the credit cards since I couldn’t afford to do so. I was continuously juggling and robbing Peter because I battled to pay a mortgage I couldn’t afford on my own wage alone. I was also consistently late on the utilities. While I worked to pay the gas bill, we went nine months without hot water. My family was aware of our struggles, but they didn’t realize how severe they were since I was too ashamed to disclose them. And too arrogant to seek assistance.

I told my husband I loved him but couldn’t afford him after the foreclosure and asked him to call me when he was sober and working. And with my paycheck alone and my damaged credit, I left him to live alone in the shantytown apartment that was all I could manage.

Then, while I was driving out of the state to spend Christmas with my family, the transmission of my 25-year-old vehicle failed. The automobile limped in, but there was no way I could have driven the 400 miles home in third gear.

Okay, so living in the ghetto meant that I could pay my expenses once more, but otherwise, my financial situation was the same as it had been when I had graduated from college. No, it was worse; my credit score was the lowest it could possibly be. There was no denying the fact that I would not be approved for a car loan. particularly given the lack of funds for a down payment. Particularly at a dealership in another state.

I choked back my pride and requested my mother’s co-sign on a loan. She also declined.

Oh wow. Oh my goodness.

Although he offered to give me his old Mazda, my brother and I agreed with her. The same Mazda that I had initially offered to buy but that he had rejected. He did not want me to purchase his car, and when it needed maintenance—and given how old it was, he knew it would—I resented him. He was aware that a new clutch was imminent as well as the requirement for an alternator belt. Because the dealership that had given him his new car wouldn’t offer him what he believed the Mazda was worth, he had refused to trade it in. It had only been idle for a calendar year in the garage.

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I was in a bind. My home was 400 miles away. I told him that although I had previously offered to buy the Mazda, I would still be taking it. He was the only one, I reminded him that only he would approve my request for a car loan and accept the minimal monthly payment I could make. I offered the same purchase arrangement I had when he had refused to sell to me the year before because I did not want him to give me the automobile as a present. I would take the car in exchange for his taking small payments in lieu of the full amount he had requested. He would continue to keep it registered in his name so we could continue to use his less expensive insurance. In essence, I negotiated to buy the automobile, rent-to-own, interest-free, as I had intended to do when he had purchased his new car the year before, as opposed to taking a gift.

What possibly could my brother do?

It was the holiday season, and I was stranded 400 miles from home with few options and pleading with him in person. My broken-down automobile remained in their driveway as I took the Mazda with my brother’s Ohio license plates on it on the way home. I then gave my brother a monthly “vehicle payment” for the following six months that included included the insurance premium.

I have been dealing with my mechanic for ten years. He was aware of both my situation and me. Despite his better judgment, my mechanic consented to accept cash for the transmission repair after much pleading and begging.

The cost of having an Ohioan man pick up my car on a trailer and drop it off at my mechanic’s business while en route to Virginia Beach cost me $700. That was significantly less than what freight firms wanted to charge to transport my broken-down vehicle on a tractor-trailer.

Every two weeks for over a year, I sent my mechanic a check for the transmission until the entire cost of the repair was covered, and for Christmas that year, I sent him a personalized t-shirt:

I had two cars now that my car was back at home and in working order. I kept sending my brother in Ohio “vehicle payments.”

Then, I was laid off. While looking for a permanent career, I immediately started doing temp jobs, however my pay was drastically reduced. Even though it was difficult, I kept sending my brother money, and he was aware of that. He advised me to halt the payments until I secured employment. Though I felt guilty, I was appreciative. I had already paid roughly half of what I had agreed to. I got the Mazda off of his insurance and registered it in my name.

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I started making payments again as soon as I got my dream job. Before I had till I made the last $1000 of the remaining payment. Then my brother instructed me to stop paying because he would cover the remaining sum.

I cried, thanked him, and followed his instructions. I was the only owner of the vehicle in the eyes of my brother.

And I saved the cash I would have been paying him each month. Prior to having that final $1,000 plus $500 for four years’ worth of interest.

I didn’t purchase a Christmas card that year; instead, I purchased a thank-you card. I signed the card and expressed my sincere gratitude. I attached a separate Post-It note that read, “Mazda, paid in full with interest,” to the cash in the card. I wrapped the present. Instead of using Christmas paper, I used standard gift wrap to enclose the envelope within a box. I affixed a gift tag that read, “To my brother, with thanks; this is NOT a Christmas gift,” to the outside of the package. When I sent the Christmas presents to my mother and brother, I also put the gift-wrapped envelope in the shipping carton.

My mother recalled the shocked shock on my brother’s face when he first saw the money on Christmas morning. He ultimately used money as a deposit for the motorcycle he wanted. Which gave me great joy.

Eventually, the Mazda did require a clutch. I still had my second car, so it wasn’t worth mending. From the junkyard I hired to remove it, I received $125.

For his patience and rescue, my brother will always have my eternal gratitude. If he hadn’t stepped up when they wouldn’t co-sign for me on a car loan, I’m not sure what I would have done. I don’t hold it against them that they didn’t co-sign. But it was crucial to me that I didn’t hurt my family when they offered to help in the best way they knew how. After waiting four years, my brother received the whole amount of the trade-in value he requested, plus an additional $500. No one in this world would trust me for a $20 loan since my credit history had been damaged by events beyond my control. I wasn’t going to betray that confidence.

I wasn’t going to betray my family’s or my mechanic’s confidence, for that matter. I place too much significance on my own self-respect to do that.

Unfortunately, it seems that I am the outlier. My family’s decision to not co-sign was the right one. You are correct to not co-sign as well. for everyone. Particularly not for anyone, like the neighbor’s son for a new automobile he doesn’t want and can’t afford, as you already know.

Don’t do it, Not at all.

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