Should I be a guarantor?

lemonpeel_2 · 25 January 2017 at 4:21PM

Hello

I wondered if someone could give me a little advice.

My boyfriend is looking to buy a car on finance, but as his credit history is rather poor, I am considering being a guarantor for him.

I understand the implications of being a guarantor and have no doubt that the repayments will be made each month, so have no qualms there.

If the payments did for any reason faulter and I become liable for the amount owed, would the car become legally mine or would this still be owned by my other half?
Also, I already have my own car finance in my name, so would this likely cause an issue with me being a guarantor?

Thanks

[Deleted User] · 25 January 2017 at 4:23PM

Don't do it.

Get your own loan and give him the money. He can then repay you.

DigForVictory · 25 January 2017 at 4:42PM

+1 for the above.
If necessary, *you* buy the car & he buys it from you, but guarantor to anyone with a known poor credit history?
Please, no!

dresdendave · 25 January 2017 at 5:05PM

Usually finance on cars is secured against the vehicle, in other words, fail to pay and they take the car off you.

This means it is generally easier to get than other types of finance. If he can't get finance for a car this suggests his credit history is very bad.

Remember "poor credit history" is just another way of saying "borrows money and doesn't pay it back".

Think carefully,You have been warned!

Pixie5740 · 25 January 2017 at 5:12PM

Why does your boyfriend have a poor credit history? Is it because he is crap at borrowing money and paying it back on time and in full? Search the board for guarantor loans and you will see people just like yourself who were sure that the person they were guaranteeing would pay back the money but didn't.

Can't your boyfriend just cut his cloth accordingly and either buy a car without finance or do without a car rather than dragging you into his financial quagmire? (giggidy)

Guarantor loans come with hefty interest rates, 49.9% APR +. Buying a depreciating asset using finance isn't always the smartest move but buying a depreciating asset using finance costing 49.9% APR is ludicrous.

Pixie5740 · 25 January 2017 at 5:13PM

Actually I found some guarantor car loan finance with a representative APR of 27.4%.....bargain!

bargainbetty · 25 January 2017 at 5:14PM

The car would remain his until repossession. The debt and any shortfall would effectively be yours too.

Why are you so sure that he can make payments when he has a poor history of doing so? Has he made any efforts to save for a car? Just a thought, but if you guys trust each other so much, why don't you take a loan and buy the car in your own name, with full ownership, and just have him as a named driver on the insurance until it is paid off by him in full. Then you will give it to him, free and clear. That's love, right there. Him trusting you, rather than you trusting him.

If he doesn't pay, you will still have the car to sell to pay off the loan and if he loves you enough to ask you to be a guarantor then he won't mind accepting that you own the car until he has paid for it. If he refuses this, ask yourself why.

Or, and this is just a thought, say no. This forum is littered with people (including me) who loaned/guaranteed money to loved ones, trusted friends etc and ended up out of pocket and with nothing to show for it.

If he can't get credit, there is a reason.

foxy-stoat · 25 January 2017 at 5:19PM

lemonpeel wrote: »

Hello

I wondered if someone could give me a little advice.

My boyfriend is looking to buy a car on finance, but as his credit history is rather poor, I am considering being a guarantor for him.

I understand the implications of being a guarantor and have no doubt that the repayments will be made each month, so have no qualms there.

If the payments did for any reason faulter and I become liable for the amount owed, would the car become legally mine or would this still be owned by my other half?
Also, I already have my own car finance in my name, so would this likely cause an issue with me being a guarantor?

Thanks

I'll answer your questions;

No, the car will remain the property of either the finance company or your other half if he defaults and you become liable for the repayments.

If your credit history and affordibilty checks out ok, then having finance in your name already wont cause an issue.

In answer to your thread title, no you should not.

I hope this helps !

bargainbetty · 25 January 2017 at 5:21PM

You could read this too... just an idea of how life for a guarantor can be..

http://forums.moneysavingexpert.com/showthread.php?t=5590973

MallyGirl · 25 January 2017 at 5:37PM

lemonpeel wrote: »

If the payments did for any reason faulter and I become liable for the amount owed,

please be aware that if he defaults and they come to you, it will be at his horrendous APR (Amigo charge 49.9%). And you may not be able to take out a better rate loan as you have your own car finance and the liability for his loan too.

Much better to either say no or, if you really must help him, borrow yourself at a better rate and lend the money to him - if he defaults or you part company at least you would be left with finance at a better rate.

PeacefulWaters · 25 January 2017 at 6:59PM

lemonpeel wrote: »

My boyfriend is looking to buy a car on finance, but as his credit history is rather poor, I am considering being a guarantor for him.

If an experienced lender doesn't expect to get their money back you're not going to either.

I understand the implications of being a guarantor and have no doubt that the repayments will be made each month, so have no qualms there.

Unless he loses his job. Or is a bit short one month. Or prioritises other debt. Or your relationship ends.

Dont do it.

Should I be a guarantor?

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