Och

iTrader: (3)

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.

mmarshall

Maybe, maybe not. Did you have any kind of written agreement with him, beforehand, about what would would happen if he lost his job and/or, for any other reason, could not make the payments?

If you don't make the payments, the vehicle could be repossessed, which may take some of the relief off your wallet, but also possibly damage your credit rating.

Perhaps so, but we are your friends and colleagues here, not repo-agents, and we're not going to toss any stones at you. Everyone, including Car Chat members, makes a mistake now and then, but the main thing is to learn from it.


And, once this bad experience is over, my advice is start saving up your own bank-account, so that, next time you need a vehicle, you can pay cash for it, and not have to worry about (or deal with) finance-companies.

Och

iTrader: (3)

No, I do not have any written agreement with him, but even if I did it probably wouldn't be of much use. He just flat out stopped paying and has no intention to resume, he doesn't care about his credit. I only cosigned the lease at the dealership.

I'll try contacting the dealer, explaining the situation and maybe work out a deal. I certainly don't need any bad records on my credit.

patgilm

The good thing is that it doesn’t seem like there are many payments left so I would just make the payments that are left and maybe even transfer the lease in your name and drive it until the lease is up. If he is a good friend he should really pay you back regardless of whether you have an agreement with him. I could never do that to a friend of mine and not feel guilty about it and I would do whatever it took to pay him back.

joedaddy1

iTrader: (1)

Your credit is going to tank. I would call BMW financial and see what your options are.

i see couple of viable options.
1. See how much the payments are for the next 6 months and disposition fee is. If not much, pay it off and return early. Make sure no early return fee.

2. goto Carmax or Carvana and see what the their no-hassle buy offer is. If it’s a small loss for you, take the hit and sell it.

3. Just tell him you’ll make all the payments, and you’ll drive the car for next 6 months.

I would say #2 is best, then #1.

More than likely you’ll need to spend some money to save your credit.

sorry to hear your situation, but always remember that there’s a reason a bank is not willing to loan someone money. Good person or bad.

SW17LS

You are absolutely on the hook, and it will absolutely impact your credit (already has). Think about it logically, what would be the point of having a cosigner if the lender couldn't come after you to collect if the primary debtor defaulted?

Terrible he would just stop paying and tell you AFTER he hadnt paid for 2 months and your credit was already damaged. What a a-hole.

bitkahuna

iTrader: (20)

some friend. he may be in very bad straights, but he should definitely have come to you BEFORE he stopped paying. sorry to hear about that.

SW17LS

Absolutely. Unbelievable.

LexBob2

I agree with joedaddy1, start with BMWFS to see what your options are with them. Good luck. Hopefully you can minimize the impact on your end.

mbarron37

With automated credit reporting, you more than likely have been reported to the credit agencies already. Since you are a co-signer, you should have received a copy of the lease agreement which clearly details your rights and responsibilities. I am very surprised that you were not contacted by BMW financial or whatever group he went through. Yup, real friend that tells you two months after he fails to make a payment.

SW17LS

I’m still astonished somebody would do this to a friend that was so magnanimous as to co-sign on their lease. Wow.

Och

iTrader: (3)

I took his car and parked it in my driveway. I will be in touch with the dealer tomorrow to see what can be done.

SW17LS

The dealer probably won’t be able to help you, you need to call the finance company.

stasek

^^^This. The car belongs to BMWFS.

joedaddy1

iTrader: (1)

agreed. Dealer doesn’t give a damn. You are not their customer.