Car Buying Questions and Answers

Have a question? Got yourself in a tricky situation with a dealer? Click on the button below to Ask the Expert!

Co-sign for my daughter?

Question:  I co-signed a car loan for my daughter. WillI be able to get a car for myself even if I co-signed for her?

Answer:  Whether or not you will be able to get a car will depend on your credit, your income, and any other debts you may have. If you can show that you have sufficient income, your credit is in good standing, and your daughter does her part by making her payments on time, you shouldn't have any problems.

Insurance Woes

Question:  I co-signed on my niece's car loan. When she quit her job and left with the car I called Toyota Financial Services (TFS) and warned them that my niece would let the insurance lapse. When it lapsed, I let them know. They told me I could not insure the car because I wasn't on the title. Also, TFS does not insure the cars it finances (as some lenders do). They (supposedly) submitted papers to the VA DMV to add me to the title, so I could buy insurance. Unfortunately, before that happened my niece totaled the car. Now "we" must pay off the loan in full or our credit takes a big dive. Should TFS have done more to protect me?

Answer:  That's a difficult situation. It would probably depend on the laws in your state. I don't know what else TFS could have done since you were not on the title to the car. Yyou could have paid the insurance premium for your niece if you knew who the insurance company was, but hindsight is 20/20. Depending on the size of the loan, it might be worth consulting an attorney, but again, I don't know what else Toyota could have done or what argument you would have against them.Try to cooperate with Toyota Financial Services as much as possible and attempt to set up a arrangement for your niece to pay off the loan. I don't know if she is willing or capable of doing this, but it's the right thing for her to do.

Will dealership take car back?

Question:  I bought a car from a dealer. Due to financial reasons I called them after one week and told them to take the car back; I offered to let them keep my down payment of $700. They refused to take it back. I even gave them a $300 check if I deny the check from my bank. What actions can they take against me?

Answer:  The dealer isn't obligated to take it back. Your problem will be with the finance company. If you just return the car to the lender, it will go on your credit report as a "voluntary surrender." That is the same as a repossession and will have a negative effect on your credit rating. I would try to sell the car and take the loss rather than ruin my credit.

Removing a name from the title paperwork

Question:   I co-signed for a girlfriend on a car loan and now she wants to give the car back to me, and let me take the payments. I don't have a problem with that, but I would like to have her name removed from the title. Is that possible and what steps need to be taken?

Answer:  To protect yourself, you should purchase the car and have new title paperwork issued in your name. You'll need to take out a new loan with only your name on it. The lender should be able to take care of all the necessary paperwork.

Seller's Right to Cancel

Question:   We just purchased a new Toyota Highlander 2007. Actually we went in just wanting to test-drive but, from our research, the price and car met all of our requirements. We signed a purchase contract, knowing that the dealership agreed to a loan of 0% over 3 years. We had the car for 9 days. On the 9th day, the finance manager contacted us and said that the dealership had made a mistake; the 0% financing was not available on the 2007 model. The finance manager asked if we could come in and sign a new contract - our best rate would be 6.9%. This changes the overall price significantly. We calculated that the interest, at 6.9%, is an additional $4,000 over 3 years. Do we have any recourse? The sales contract was signed by all parties at the dealership.

Answer:   I would check your paperwork to see if you signed a document stating that if there was an error, you would return to resign paperwork. Even if you did, this is not a typographical error; it was an error made in the offer. I would tell the dealer you are not willing to sign a new contract. I'm assuming the financing went through Toyota Financial Services. If necessary, the dealership will be able to buy down the rate (meaning it will eat the difference in cost). Be aware that the dealership will not do this willingly and will apply a lot of pressure to get you to resign the contract. I would dig in my heels and fight the dealer all the way up to hiring an attorney. When you get to that point, you're better off to work out a deal with the dealer and move on. I would play on the dealership's sense of fair play, reputation, etc. Make the dealership management understand that you negotiated in good faith and trusted it because of its stellar reputation in the community.

Co-Signed For a Loan

Question:   I cosigned a car loan for my friend a half year ago. Now I want to cancel it, but my friend just ignored me. What can I do? My name is not on the title.

Answer:   I'm afraid you can't cancel the loan. The only options are to have your friend re-finance the loan on his or her own, or have him or her sell/trade the car and pay off the loan.

Pocket Change?

Question:   A few months ago I bought a Dodge Dakota. This was the first time I had ever bought a car from a dealer. I got a low interest rate and the payment I wanted. The down payment is my problem. They took my Honda Accord as a down payment worth $500 and I gave them $500 in cash. A week later I realized the $500 down was not in my contract. I believe the salesman kept my money and added it to his commission. What should I do? Devon

Answer:   First question is did the salesperson give you a receipt? If not, you've received a $500 education. I'd go back to the dealer with all of my paperwork and ask to speak with their customer relations manager. If they are a reputable dealer, you should be able to get answers quickly. Dealers don't like employees stealing their money.

Husband Signing for Wife?

Question:   Hello, My husband and I bought a used car 2 days ago. They promised a certain payment. During the demo ride the car started to heat up, they promised it would be fixed. When he went in to sign the contract and pick it up, the payment went up. They needed me on the loan payment (co-signer). My husband signed for me. When he drove it away, it started to overheat again. They had to come pick him up. The car was left there to be fixed. He went back yesterday and told them he did not want the car. They said it was a done deal, he signed the contract. That is true, but actually I didn't. Do we have a leg to stand on? I'm sorry to say that many of the tricks you describe are exactly what happened. Needless to say, my husband is angry and upset at this whole process. I wish he had seen this site before he went car shopping. Thanks for any info you can share. Lisa

Answer:   The fact that your husband signed the contract for you is your ticket out of this deal. Without a Power of Attorney, this is not legal. Just let the dealer know that if they don't cancel the deal you will notify the lender that they coached your husband to sign your name to the contract. Can you say "Bank Fraud"?

Should I co-sign?

Question:   Someone I trust who has very little credit, due mainly to low income, has asked me to co-sign for a car. I am assuming that I would be responsible for the loan in case of default, death etc and for the length of the said loan? How much information would I have to give the dealership? What should I look out for if I decide to go ahead and what should I avoid? Thanks.

Answer:   Smart move to ask questions before you jump in to this. I get at least 1 e-mail each month from someone who co-signed for someone and now regrets it. You said the person who wants you to co-sign has low income. Do they have good credit? If they have good credit but can't get a loan because of their income, then they probably don't have enough income to make the car payments. Banks are usually pretty good at figuring out how much a person can afford. And these days, banks are pretty eager to lend money. So if they are turning down the loan, there must be a good reason. Maybe your friend needs to look at a less expensive car or put down a larger down payment to get a lower monthly payment. When you co-sign, you are 100% responsible for the loan. If the other person does not make the payments, the lender will expect you to make them. If you don't it will have a negative effect on your credit rating. Unless you are prepared to make the payments, don't co-sign. Good luck.

If you've found the information on this site to be helpful, please click on the button below to send your family and friends an email with a link to DealerTricks.com!