Auto Loan Advice based on Credit History (Buying/Leasing)

DCW

Hello!

I need some advice on how to best proceed with buying/leasing a car. My fiance and I (we'll be married next year) are in the market for a new car. We do not have one now and haven't had one since we were on our parents' insurance many years ago. Currently in a walkable part of Chicago, so it hasn't been necessary anyway.

The problem is that she has a collection on her credit. Her family aren't originally from the US and bought into a time share scam (before I came along). Upon realizing what had happened, they stopped paying into it which sent $2K-$3 to my fiance's collections. They tried to sue but something happened with the lawyer (simplified). Anyway, prior to this her credit was fantastic (>800) and now it's 748, while mine is 743 (how mine is lower with no delinquencies is beyond me).

My question is about how finance departments and/or banks will view that collection when we apply for an auto loan or lease?

I thought that since our combined income is double (we both make about $85K/yr), then it would be beneficial to apply jointly, but I'm just unsure how her collections will affect everything.

Should we apply together or should I just apply on my own - just adding her on the insurance after the purchase/lease? I just don't want to get slammed by a crazy interest rate - even crazier than they are now anyway.

Thanks for any help or guidance!

P.S. I'm aware of potential issues with applying jointly while unmarried. Just take my word that we're stable and a breakup isn't an option.

kyfdx

@DCW

There is no way to know for sure, but a collection is not a good thing. That's why you can't just go by the credit score. Also, two unrelated people being on a car note is not always viewed as positive, either. You don't have to prove it to me, but that's just the way it is. Your feelings won't matter.

I'd try to put it in your name, only. The difference in your credit scores is negligible. Your income would seem to support any reasonable lease payment.

DCW

kyfdx said:

@DCW

There is no way to know for sure, but a collection is not a good thing. That's why you can't just go by the credit score. Also, two unrelated people being on a car note is not always viewed as positive, either. You don't have to prove it to me, but that's just the way it is. Your feelings won't matter.

I'd try to put it in your name, only. The difference in your credit scores is negligible. Your income would seem to support any reasonable lease payment.

Thanks so much! This is definitely solid advice. I appreciate it though.

Yeah I understand about having two unrelated people on a car note isn't seen as a good idea. You're right: Feelings don't matter. We'll probably just put everything in my name and move forward that way.

One question though:
You wrote, "two unrelated people being on a car note is not always viewed as positive" - Do you mean that the lender would view it as a liability? Or just in general that people view it as bad practice? It's probably both, but I just want to be sure I understand.

Thanks!

Michaell

DCW said:

kyfdx said:

@DCW

There is no way to know for sure, but a collection is not a good thing. That's why you can't just go by the credit score. Also, two unrelated people being on a car note is not always viewed as positive, either. You don't have to prove it to me, but that's just the way it is. Your feelings won't matter.

I'd try to put it in your name, only. The difference in your credit scores is negligible. Your income would seem to support any reasonable lease payment.

Thanks so much! This is definitely solid advice. I appreciate it though.

Yeah I understand about having two unrelated people on a car note isn't seen as a good idea. You're right: Feelings don't matter. We'll probably just put everything in my name and move forward that way.

One question though:
You wrote, "two unrelated people being on a car note is not always viewed as positive" - Do you mean that the lender would view it as a liability? Or just in general that people view it as bad practice? It's probably both, but I just want to be sure I understand.

Thanks!

Years ago, I bought a car with a woman I was dating, and it was in both our names. The relationship ended, and she kept the car, but it messed up my credit in a big way (I think she stopped making the payments, and I was unable to shoulder the burden).

So, in the eyes of the bank, there is a risk for two unrelated people jointly financing or leasing a vehicle.

DCW

Michaell said:

DCW said:

kyfdx said:

@DCW

There is no way to know for sure, but a collection is not a good thing. That's why you can't just go by the credit score. Also, two unrelated people being on a car note is not always viewed as positive, either. You don't have to prove it to me, but that's just the way it is. Your feelings won't matter.

I'd try to put it in your name, only. The difference in your credit scores is negligible. Your income would seem to support any reasonable lease payment.

Thanks so much! This is definitely solid advice. I appreciate it though.

Yeah I understand about having two unrelated people on a car note isn't seen as a good idea. You're right: Feelings don't matter. We'll probably just put everything in my name and move forward that way.

One question though:
You wrote, "two unrelated people being on a car note is not always viewed as positive" - Do you mean that the lender would view it as a liability? Or just in general that people view it as bad practice? It's probably both, but I just want to be sure I understand.

Thanks!

Years ago, I bought a car with a woman I was dating, and it was in both our names. The relationship ended, and she kept the car, but it messed up my credit in a big way (I think she stopped making the payments, and I was unable to shoulder the burden).

So, in the eyes of the bank, there is a risk for two unrelated people jointly financing or leasing a vehicle.

Ok I see. Thank you for your story! This is all super helpful!

We'll just put everything in my name and split the payments. No big deal at all! We're both practical and really just want to make the smartest decisions (probably waiting to buy/lease until the market has improved would be smarter, but that's a different thread).

Thanks for all of your advice!

kyfdx

@DCW Once you get married, it won't matter. To simplify things in the future, you should really work on getting that collection removed from her credit history. If it's $2K-$3K, the cheapest way might be by paying it.