Disadvantages of having friend take over car payments??

[a_scobel]

So I'm selling my DD (Sentra) to my roommate before I head off for Korea in July..well not really 'selling', but he's taking over the car payments. I got a loan for $2700, and there's about 2k left to pay off on it..so I'm just going to give it to him & he's going to take over the payments.

To do that though, my name still has to be on the contract...but he's going to be taking over the payments. I think the only way I could be screwed over by this is if he stopped making the payments, but he's a good friend & I trust him. Him & I make pretty much the same amount of money, since we're both the same rank & have been in the military the same amount of time. & It's an automatic withdrawl from our checking accounts..so each month the loan company just takes the money automatically, so it's not like he can miss a payment or suddenly be unemployed. I'd write a contract out for us both to sign with signatures, for the unlikely event that he does try to screw me over. So I'd just have to send the contract to his 1st sergeant & commander & he'd be in some shit..

Anybody think this is a bad idea?? Any disadvantages I'm not seeing?? I don't really have any experience with selling cars since this is the first time I'm doing it, so I dunno all the little loopholes & whatnot.

 

[somdturbo]

if you trust him that much then go for it. not much to lose i suppose...althought it would be easier to sell locally to someone else.

 

[FORMONTOYA]

I'm +40 and I can tell you right now....Don't loan any real money to friends, that's the quickest way to make an enemy.

I would advise against having him take over payments while the car is in your name. There is no guarantee that he will make the payments and he has no reason to do so. The car and subsequent bad credit will be all yours. If he wants the car, just sell it to him for what the buyout is on the loan, which is generally less than what you owe. He can get a loan for that amount and then do whatever he wants and you don't have to worry about a thing. Your choice.

 

[a_scobel]

if you trust him that much then go for it. not much to lose i suppose...althought it would be easier to sell locally to someone else.

Yeah I know that, he really needs a car though as the Ford Escort he bought for 500 bucks a year ago is about to die and he's trying to sell his F350 but nobody wants it with the way the gas prices are..

I'm +40 and I can tell you right now....Don't loan any real money to friends, that's the quickest way to make an enemy.

I would advise against having him take over payments while the car is in your name. There is no guarantee that he will make the payments and he has no reason to do so. The car and subsequent bad credit will be all yours. If he wants the car, just sell it to him for what the buyout is on the loan, which is generally less than what you owe. He can get a loan for that amount and then do whatever he wants and you don't have to worry about a thing. Your choice.

I dunno if he can get a loan. He already has about 25k to pay off on his F350 (That's why he's trying to sell it), so loan companies may look at him & think he couldn't afford another loan..I'm just trying to help him out, plus I'm leaving in a couple months & would like to get rid of the Sentra, too much stuff going on with work & outprocessing & everything else to worry about advertising the car, meeting potential buyers, leaving it in the lemon lot, etc.

 

[FORMONTOYA]

I dunno if he can get a loan. He already has about 25k to pay off on his F350 (That's why he's trying to sell it), so loan companies may look at him & think he couldn't afford another loan..I'm just trying to help him out, plus I'm leaving in a couple months & would like to get rid of the Sentra, too much stuff going on with work & outprocessing & everything else to worry about advertising the car, meeting potential buyers, leaving it in the lemon lot, etc.

It sounds like he has enough going on now. Of course it's your choice. However, plenty of people have been screwed behind "good intentions".

 

[blcknspo0ln]

I have several friends that I would consider "friends for life" and I would never do that. Money, business, and friends should never mix. Of course money and business should though ;P. I've never done it and had a bad experience, but from what I've seen from others, don't ever put yourself in a situation like you're proposing. I hope you make the right choice

Think about this, why not have a family member look over your payments and collect it from your friend. This way your family can keep track of the payments and look over everything while you're gone.

 

[a_scobel]

So is there any other things I'm not seeing here? Besides him not paying..maybe difficulties when it comes to the title or insurance or anything?

Like I said before, I really don't see any reason why he wouldn't pay, the payments are only $150 a month ..plus if he does try to screw me over, I've got the contract to prove it. Not very wise for a military member to try to screw another over. You can always go & tell their 'mommy'...commander, 1st shirt, etc. Unlike a normal job...Joe Blow's boss at McDonalds could care less if Joe's screwing Timmy over...

 

[FORMONTOYA]

I have several friends that I would consider "friends for life" and I would never do that. Money, business, and friends should never mix. Of course money and business should though ;P. I've never done it and had a bad experience, but from what I've seen from others, don't ever put yourself in a situation like you're proposing.

So true...I hear things like this and always think of the movie "New Jack City" at the end when Wesley Snipes kills his buddy after sh!t hits the fan..."friends are friends, but business is business." Then he shoots him in the head...

You shouldn't screw with a mans money or put yourself in a position to be screwed. Of course being in the services does create a different situation for you than most of us have.

 

[Thomas91169]

cant you just sign the loan/title over to him or some shit?

or maybe his bank can buy out your loan?

any way, id have a talk with the place you have the loan with, and see what your options were, and have your buddy do the same and see what his options are for him taking over payments. though more than likely, he would have to take out a loan that pays off your loan and then he would make payments on that just like any other loan.

 

[leet]

I wouldn't put my terrible credit at risk like that.

Hehe.

 

[L2RTSiAWD]

I personally would never loan any of my friends money and I've known these guys for 15+ years. I just know they are not good at repaying shit quickly if it's not a "real bill". Here is an example. A friend of mine and my wife owes my wife over 600 dollars, we kept pestering him every month to gives us something and he would blow it off. Well it took a contract agreeing to a payment plan of a minimum of 25.00 a month in order to start paying anything. This guy is one of my best friends but repaying friends loans is not his strong suit.

It sounds like you may be having to make those payments until your friend can sell the truck and buy the sentra.

 

[Blk95gs]

I personally would never loan any of my friends money and I've known these guys for 15+ years. I just know they are not good at repaying shit quickly if it's not a "real bill". Here is an example. A friend of mine and my wife owes my wife over 600 dollars, we kept pestering him every month to gives us something and he would blow it off. Well it took a contract agreeing to a payment plan of a minimum of 25.00 a month in order to start paying anything. This guy is one of my best friends but repaying friends loans is not his strong suit.

It sounds like you may be having to make those payments until your friend can sell the truck and buy the sentra.

FULLY agreed. I've sold things to close friends for a fraction of that, who say they'll "have the rest of the money by Friday."

...problem is, I guess I should ask which Friday they were talking about

Since he's your friend, he'll automatically assume that if he misses a payment you won't mind, you know, cause he's your friend and all.

Don't do it.

 

[a_scobel]

FULLY agreed. I've sold things to close friends for a fraction of that, who say they'll "have the rest of the money by Friday."

...problem is, I guess I should ask which Friday they were talking about

Since he's your friend, he'll automatically assume that if he misses a payment you won't mind, you know, cause he's your friend and all.

Don't do it.

Hm but there's no way he could miss a payment. It's automatically taken away from his checking account every month, about a week after payday. It's $150 bucks. There's no reason he would miss a payment. Also I called the loan company, they said the only way to switch bank accounts is to sign a paper authorizing it, so it's not like he could just drop or cancel the monthly payment anyways. Even if he only has like 50 bucks in the bank by the pay date, with the bank we have, you just go into negative numbers until you get more money in. They'll charge you like 20 bucks if you go into negative numbers, but still, it's not like a bounced check where the loan company won't get their payment.

Also I've lent him money plenty of times before & he's always paid me back when he said he would. I lent him about $400 for an emergency plane ticket before, he paid me back in two weeks like he said he would.

 

[blcknspo0ln]

It's up to you man. If you trust him enough to depend on him to make your payments, then by all means do it. We're just trying to watch your back.

 

[reeper]

As stated above, your credit is at risk. I personally wouldn't chance it. Ive worked to hard to get mine where it is. End result was a 7% interest on my house loan.

 

[boostedinaz]

Sounds like you have already answered your own questions. Everyone is giving you VERY good reasons not to and you just keep justifying giving it to him. So with that said do it and HOPE it works out the way you want it to.

Personally, from working at banks, I would never let anyone other than myself have anything to do with your credit. Sure you may be able to go to your supervisor and have the other guy get in trouble, but what about your credit. Who is going to fix that? The company doesn't give a shit if you had a deal or a contract with some guy, your name is on there contract and the payments were not made you are SOL.

Good luck.

 

[a_scobel]

Sounds like you have already answered your own questions. Everyone is giving you VERY good reasons not to and you just keep justifying giving it to him. So with that said do it and HOPE it works out the way you want it to.

Personally, from working at banks, I would never let anyone other than myself have anything to do with your credit. Sure you may be able to go to your supervisor and have the other guy get in trouble, but what about your credit. Who is going to fix that? The company doesn't give a shit if you had a deal or a contract with some guy, your name is on there contract and the payments were not made you are SOL.

Good luck.

Yeah thanks guys. I've decided not to go through with it. Either he gets a loan (It's only 2k bucks..he claims he has good credit, so shouldn't be hard for him to get the loan), or he pays me with cash. So we'll see how that goes!