Grandma Cosigns with Grandson

Dear Dave, I just found out that my mom co-signed my son's new car loan. He defaulted, and now she's making the payments. Does this mean she owns the car that was financed with the loan? If not, how do I go about taking over the car? I want to sell it. Patty Dear Patty, No, this doesn't make your mom the owner of the car unless she signed as an owner. But the first thing you do is call this kid up and tell him to bring you the car. Just make sure he hands it over voluntarily, otherwise you're looking at another problem called grand theft auto! When you co-sign a loan for a friend or even a family member it's like playing Russian roulette. Chances are the gun's going to go off, and you'll end up blowing your financial brains out. Debt is the most aggressively marketed product in our culture today. And if some banker wants a co-signer on a loan, it means he doesn't think the person asking for the loan will pay it back! Before all this started I'm pretty sure grandma didn't have a space on her to-do list marked "go thousands of dollars into debt." Co-signing is BAD idea. If you insist on doing it, you better make sure you have the ability to write a check and hand them the money. Because chances are - one way or another - that's exactly what you're going to end up doing. - Dave
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