Co Signer Loans Scam
Buying The Car?
The co signer loans scam is unfortunately a rather common car buying scam and it can affect both the co signer and the actual buyer of the car.
The co signer will think they are helping someone out, usually a family member or friend to not only buy a new car, but to help to build or rebuild credit.
This scam can leave the co signer holding the bag and the "buyer" of the car is reduced to simply a "driver" and receives no positive credit.
There are three ways
the co signer loans scam is used:
- "Buyer" Is Kicked From The Loan
- Multiple Contracts
- Slammed Down The Road
How To Avoid The Co Signer Loans Scam
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Kicked From The Loan
In the first variation of the co signer loans scam, the "real" buyer is essentially kicked off the loan.
This happens when the car dealer knows that no matter how good the co signers credit is, it will not help to get the "buyer" approved for the terms set forth on the contract.
I have seen this many times and it starts with the Spot Delivery Scam.
The car will be delivered with both customers on the contract and the next day or even up to weeks later (the dealer is hoping you've grown rather attached to your car) they call up and inform you that they were only able get the loan approved with the co signer alone.
They are not only hoping you the "buyer" have grown attached to the car, but are hoping that the co signer has a heart and will not want to see your new car have to be returned and will just sign for the car on their own.
In this version of the co signer loanss scam, the finance manager will have the co signer sign a contract with just their name and the "buyer" sign one with just theirs.
The contract the "buyer" signs will immediately go into the round file, or more than likely, the shredder and no copy will be given to the "buyer."
That way if either one of the parties were to come back and complain that they both should have been on the loan, the dealer would simply say "prove it!"
They can also work this by having the "buyer" on the title application, but not on the contract. It appears that if you are on the title and registration that all is on the up and up, but you won't get any credit for the loan... You'll get plenty of credit for any parking tickets though!
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Down The Road
With this last version of this scam, the car dealer will let you think everything is hunky dory, will sign you up and send you on down the road...
That's sounds great until you are called back to the dealership after some time and told that they could not get you approved and you'll need a well qualified co signer.
Don't have a co signer and they will either try to switch you to a lesser car, that you would qualify for on your own, or worst case scenario, you'll be leaving the dealership on your Chevro"legs" express, i.e. you'll be walking.
How To Avoid The
Co Signer Loans Scam
- Review contracts carefully to be sure both signers are on the contract.
- Ask to see the auto lenders approval.
- Get pre approved for an auto loan. This way you can work directly with the auto lender and know exactly what the bank is looking for. They will be able to let you know up front whether or not you'll need a co signer.
As you can see by these three simple tips, the co signer loans scam can be easily avoided. If you don't take these simple measures, then please don't say I didn't warn you...
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