Guarantor on new car finance - just what goes on ?

property.advert

I'm considering buying a new car. I want to pay cash but there are many discounts and a servicing deal which are only available if the car is financed at a minimum of 65%.

I don't want anything in my name but am happy to put it in my wife's name. However, I don't think she'll get the credit.

The garage says I can cancel the loan after a month with a month's interest as a cost. I would obviously check this out first.

But I don't know how a guarantor works. I can guess and don't think I'll be far off but if my mate guarantees the loan for my wife, just what does he sign up for and if we do cancel after a couple of months, what happens to his guarantee then (it originally being for say 2 years).

barbarawright

I suggest your friend reads this thread and that he/she asks you for some convincing proof that you're going to keep up the payments when one of you can't get credit and the other 'doesn't want it in his name'.

https://forums.moneysavingexpert.com/discussion/3240738

Apples2

property.advert wrote: »

I'm considering buying a new car.

I don't want anything in my name but am happy to put it in my wife's name.

:T:rotfl::rotfl::T

Your mate would be daft to agree and you could hardly call yourself a mate to even ask him.

Recipe for disaster.

property.advert

Apples2 wrote: »

:T:rotfl::rotfl::T

Your mate would be daft to agree and you could hardly call yourself a mate to even ask him.

Recipe for disaster.

Hardly. If he wanted, which he wouldn't, I'd happily give him the outstanding amount for the duration of the guarantee.

I thought I'd said I could just pay cash ?

This is simply about getting the best deal.

property.advert

jimmo wrote: »

Surely you have been around the forum long enough to realise that the garage want you to take finance for a reason. i.e their commission. That will be worth at least a few months' worth of the proposed instalments. There is no way that the garage would suggest you take out the finance and cancel after a month if their commission would lost in the process.
There is no way that the finance company will take the hit.
Guess who's left, you and your guarantor.

It is not actually the garage's deal, it is Toyotas. No loan then no free servicing. Works out about £750/850 in my case.

Apples2

Maybe I simply misunderstand.

Can't see why you are not prepared to take any risk yourself, but are more than happy to stitch up not only the wife but your friend too and let them deal with any hiccups.

Mrs_Ryan

Dont do it! Toyota finance is provided by Barclays Partner Finance who are a bleeding nightmare to deal with. They've been putting false information on OH's credit file for 6 months and it took me several hour-long phone calls for them to sort their mistake out, they kept saying payments had been returned by the bank when they hadnt and as for making large payments... forget it. Their systems hate it!! We took out a service plan on ours... we didnt get free servicing.

MrSweeps

property.advert wrote: »

The garage says I can cancel the loan after a month with a month's interest as a cost. I would obviously check this out first.

No - they didn't. They said YOU can "settle" the loan with one months interest as a charge. ie. You can pay the loan off, in full, plus be charged an extra month's interest for redeeming the loan early.

The guarantors liabilities don't come into this scenario. The guarantor is there to protect the loan company from people who don't service their loans. If the borrower does not make the agreed repayments, then the person who guaranteed the loan will be obliged to.

If YOU are applying for a loan that the lender requires a guarantor for, then the lender already thinks that YOU might end up not paying for it, and they require a legal route to recover YOUR debts from someone else.

Anyone who lets YOU take out a loan in THEIR name (your wife!) simply because YOU don't "want your name on a loan" or who guarantees your payments, is a fool. People with a credit history that shows they can service their own loans, don't need guarantors, nor need to take out loans in other people's names.

Emmzi

Actually it isn't a loan, it's HP, which is a very important difference. Max mileage limits, GAP insurance etc. With the added complication of "what if yu write the car off" I wouldn't touch this with a bargepole if your "mate"

http://www.toyota.co.uk/cgi-bin/toyota/bv/generic_editorial.jsp?navRoot=toyota_1024_root&edname=AccessToyota&zone=Zone+Finance&id=Access_Toyota#moreinfo

Plus there will be a final settle fee whioch comes off your saving, and an arrangement and admin fee, and in your case, a guarantor referencing fee most likely.

Is a friendship worth risking over the probably now £200 saving you will make?