Question about being a lease cosigner.
12-11-19, 07:25 PM
#91
Back in May or June of 2017 I acted as a lease cosigner on a BMW for a friend. He didn't have enough credit to get approved for a lease, so he asked me to cosign and I did. He called me today saying that he lost his job and did not pay for his car for the last two months and wont be able to pay for it going forward. His insurance is expiring next week and he is not renewing it, and will return the plates to DMV. His lease however is only expiring in May or June of next year.
Am I likely to be on the hook for the rest of the payments? Also, he will have to return the plates to the DMV, and has nowhere to keep the car. If something happens to the car while its not insured, am I likely to be on the hook for it as well?
Bad situation and a lesson for me.
Am I likely to be on the hook for the rest of the payments? Also, he will have to return the plates to the DMV, and has nowhere to keep the car. If something happens to the car while its not insured, am I likely to be on the hook for it as well?
Bad situation and a lesson for me.
If I reported this correctly, an expensive but low risk approach for the cosigner would be to make the remaining lease payments, and arrange and pay for liability insurance until the lease expires and the vehicle can be returned. Hopefully, it will be in acceptable condition and the mileage will be below the maximum allowed. If the lessee has already given the vehicle to you to hold, park it in a safe place, pay, insure, and wait. I did not ask specifically, but my reading is that you (cosigner) cannot drive the vehicle. You have no way to register it in your name and get a license plate for it.
Bottom line - you need real legal advice and representation. Don't depend on any of us on the internet. You are potentially in real jeopardy and need a real, trained, and experienced attorney. Imagine what could happen to you if the leased, uninsured car is involved in a serious accident with injuries.
12-11-19, 07:30 PM
#92
Lexus Champion
Back to the original question. I had the opportunity to speak with a couple of family attorneys and brought this up. To summarize, a cosigner basically has almost none of the benefits of the lessee, and assumes almost all of the same risks. The vehicle is in the name of the lessee, and cannot be assigned to the cosigner without the lessee and lessor agreeing to it.. If the lease involves both a leasing company and a finance company this could be difficult to arrange. The cosigner has no right to drive or take possession of the vehicle unless he formally and legally takes over the lease. If the lessee misses a payment, the lessor notifies the credit bureaus of both the lessee and the cosigner. Both of their credit ratings are dinged. If the lessee misses payment(s) the cosigner is legally responsible for making these payments. If the lessee does not insure the vehicle, and there is an accident, the cosigner has the same liabilities as the lessee. In fact, the cosigner, usually having the deeper pockets of the two individuals, is likely at greater financial risk than the lessee. If the lessee fails to maintain the car according to the lease stipulations, the cosigner becomes responsible at the end of the lease for any charges not paid by the lessee. The cosigner can also be liable for charges for excess mileage charges accrued but not paid by the lessee.
If I reported this correctly, an expensive but low risk approach for the cosigner would be to make the remaining lease payments, and arrange and pay for liability insurance until the lease expires and the vehicle can be returned. Hopefully, it will be in acceptable condition and the mileage will be below the maximum allowed. If the lessee has already given the vehicle to you to hold, park it in a safe place, pay, insure, and wait. I did not ask specifically, but my reading is that you (cosigner) cannot drive the vehicle. You have no way to register it in your name and get a license plate for it.
Bottom line - you need real legal advice and representation. Don't depend on any of us on the internet. You are potentially in real jeopardy and need a real, trained, and experienced attorney. Imagine what could happen to you if the leased, uninsured car is involved in a serious accident with injuries.
If I reported this correctly, an expensive but low risk approach for the cosigner would be to make the remaining lease payments, and arrange and pay for liability insurance until the lease expires and the vehicle can be returned. Hopefully, it will be in acceptable condition and the mileage will be below the maximum allowed. If the lessee has already given the vehicle to you to hold, park it in a safe place, pay, insure, and wait. I did not ask specifically, but my reading is that you (cosigner) cannot drive the vehicle. You have no way to register it in your name and get a license plate for it.
Bottom line - you need real legal advice and representation. Don't depend on any of us on the internet. You are potentially in real jeopardy and need a real, trained, and experienced attorney. Imagine what could happen to you if the leased, uninsured car is involved in a serious accident with injuries.
Yes, I second this. Talk to a lawyer, I know it's a pain and expensive.
There are zero upsides to co-signing, it's not your car. You just get screwed if the borrower stops paying. Borrower doesn't really have to worry about anything--I assume they have not great credit if needing a cosign in the first place. Cosigner takes all the risk, really.
I cosigned my spouse's car but that's normal.
I would never cosign for a friend, or even a family member other than maybe my mother although they all would never need it.
Best of luck in getting your situation resolved.
12-12-19, 07:14 AM
#93
Lexus Fanatic
iTrader: (20)
Might be best then to stick it in enclosed storage and just pay the lease. 
12-12-19, 07:39 AM
#95
If you do not get insurance, BMW will and tack it on to what is owed. The insurance will cost a lot more as well! I can sympathize with your situation. I co-signed for my oldest daughter and had to cover a number of her payments during the last couple of years of the loan. In addition, 4 months before the end of the loan, I got a surprise call from Honda finance that the payment was 60 days past due because my daughter had "reversed" the payments at the bank (don't ask me how she was able to do that!). The call was a surprise because I communicated to Honda Finance multiple times to contact me at least a week before a payment hit the 30 day missed mark so I could pay it. Killed my credit score and took almost a year to fully recover! Lesson learned- Never, ever, never co-sign for ANYONE! When my teenage daughter is ready for a car, I will buy it and have her pay me
12-12-19, 11:33 AM
#97
Lexus Champion
And yes they will slam you with outrageous insurance as a previous poster said if you don't have it
There was an issue with my insurance (their mistake) a few years back when I was still paying on my car...the lender had no proof of insurance.
I got a letter in the mail saying they were going to add insurance and it was outrageously expensive, like triple what my insurance bill was.
There was an issue with my insurance (their mistake) a few years back when I was still paying on my car...the lender had no proof of insurance.
I got a letter in the mail saying they were going to add insurance and it was outrageously expensive, like triple what my insurance bill was.
12-12-19, 07:07 PM
#98
Pole Position
Why would your friend who has poor credit need a BMW?
I’m not against supporting friends in need but i sure as hell would not cosign on a new BMW, whats wrong with Kia Rio for $99 month while fixing your credit.
You have 2 options at this point.
1) make remaining payments and turn in car asap so at least you are not wasting $$$ on insurance.
2) sell the car outright and hope sales price covers buyout price. This is highly unlikely as BMWs usually have inflated residuals.
I’m not against supporting friends in need but i sure as hell would not cosign on a new BMW, whats wrong with Kia Rio for $99 month while fixing your credit.
You have 2 options at this point.
1) make remaining payments and turn in car asap so at least you are not wasting $$$ on insurance.
2) sell the car outright and hope sales price covers buyout price. This is highly unlikely as BMWs usually have inflated residuals.
01-10-20, 08:07 PM
#100
Lexus Fanatic
Don't lose sleep over it.....and chalk it up as a learning experience. 4K may sound like a lot of money at first, but, compared with the rest of your life, is not an extraordinary high amount to lose to gain valuable lessons that will stay with you from now on. And look...it's pretty safe to say that we all (or almost all) have made mistakes of our own in the vehicle-buying business. I probably lost more than you did from buying poorly-made lemons from Chevy and Chrysler/Plymouth (and learning from the experience) before shifting to Japanese-built vehicles in the mid-1980s. Money can be replaced or built back up, especially over time, if you are careful on your future decisions and don't repeat past errors. Good Luck (we're all with you)....and be glad this incident is behind you once and for all.
Last edited by mmarshall; 01-10-20 at 08:34 PM.
01-10-20, 08:34 PM
#101
Lexus Fanatic
iTrader: (20)
Sucks, lesson learned, and onward... 
01-11-20, 05:27 AM
#102
Lexus Fanatic
01-11-20, 10:16 AM
#103
Lexus Champion
01-11-20, 10:49 AM
#104
