T Nation

Questions About Getting a Cosigner


#1

So I have recently decided I will be purchasing my first motorcycle, and before the questions start yes I have taken the safety course and am confident in my riding skills to the point where I feel i can be safe with my own bike. After some research and then coming upon a gem of a deal in my eyes I have decided on a new 2007 Honda interceptor VFR 800. ( http://www.totalmotorcycle.com/photos/2007models/2007-Honda-InterceptorVFR800FIa.jpg link is a pic of the bike for those interested).

Now heres my dilemma, I am finished with school and currently working full time, not making a ton of money but enough to afford this purchase, and still be saving money each month at the same time. I live at home and have been wanting a bike for a long time and feel now is the time. The dilemma is that when I went to the dealership today and they cannot finance me because I have only been with my full time job for 3 months since i got out of school, and its not enough for continuous employment i was told. I have talked to my mom (yes im resorting to that) about cosigning and she is willing depending on certain circumstances, which is awesome, and i have proven myself reliable in that she knows i can make the payments, but i feel bad asking her for this and i dont know why. How do you guys feel about having someone cosign on a bigger purchase? is it acceptable as I know i will have no problems with the biil? Dont know why im posting this but its been bugging me all day.

http://i207.photobucket.com/albums/bb63/Dustinsane/Tits.jpg link to tits, dont know how to make them come up in my post.


#2

Have you tried financing from a smaller, community bank? They are typically more willing to give loans than the big banks. Just a little something to think about...


#3

oh ill look into that. I was actually trying to finance through the dealership because i thought with how tight banks are now it would be easier to just go through them.


#4

To be honest (i work for a bank), its probably not just your length of time at your employer. Lack of credit history probably isnt helping. Lending guidelines for most banks have gotten tight since everything went downhill. The economy here in Canada wasnt hit even fractionally as bad the US and our mininum lending criteria became significantly more stringent. You might have more luck with a small bank but you might end up paying interest out the ear and having payments a couple hundred bucks more then anticipated. If your mom is fine with cosigning, then get yourself a good rate on that loan, son! My old man cosigned on quite a few loans for me right out of school (and during).

Find out what kind of interest rate your going to be paying with the dealership and then shop around at a few other banks. Dont go crazy tho, a ton of credit inquiries can impact you negatively. And also find out how they calculate interest. Lenders with high rates will often charge all the interest right up front, so a 6k loan becomes 7900 right off the bat, as opposed to a "traditional" lender (big bank, dealship) who will accrue the interest daily and charge monthly. This will become important if you ever want to take out another loan in your own name to pay this one off.


#5

Just inquire, don't apply like someone already said. I work in a bank too but we barely do any car type loans. Hopefully you realize the impact you will have on your mom's credit if you mess up so as long as you make the payments on time, there's no problem with it.


#6

Thats exactly it i know the impact it can have. I also have gone over my fiances extensively and know that I can handle the payments but just knowing that in the back of my head is what worries me, because this is not a necessity it is a toy and i feel bad having her cosign on a toy.


#7

Well, don't feel that way. If you do what you are supposed to, chances are good that it would be the last time you need a co signor.


#8

I guess if i look at it that way this could be a positive lol. its a big purchase for me money wise but in the grand scheme of things its a smallish purchase, the bike is $7499 and after all the fees it will probably be around $9000 out the door.

Im working full time now while applying for full time jobs to my potential career so if i were to get a career job I would most likely just pay it off pretty quickly so that the interest doesnt climb up on me. Also they said for motorcycle its hard to get an interest rate below 7% since bikes are not deemed necessities, should that be a deal breaker if the interest rate is closer to 9 than 7?

Thanks again all for giving your input.


#9

Don't have someone co-sign for you, Buy a used bike that you can afford, or save up for a down payment so you can get the loan in your own name with no co-signer. You can't see into the future and if you screw your moms credit up or worse she has to start paying for your bike, your relationship is going to be made difficult over a bike.

A used bike is going to be just as fun to ride as a new one, life isn't a contest over who can have the newest/nicest things. Down the road when you have more money saved, and enough money put away THEN I would consider buying a new toy.

I know you are young but trust me, the sooner you start putting your money to work for you the sooner you will be wealthy. The longer you keep your money working for someone else (paying interest on a loan) the longer you will be a slave to money, and your job.

BTW this is coming from a slave trying to get his freedom back. It's much harder to dig out than it would have been to make smarter decisions when I was younger.

V


#10

I think it is a fine decision to have your mom cosign with you.

I had my mom cosign for a loan before. You just have to be confident that you will not impact her credit in a negative way. You seem like you have thought about everything pretty thoroughly.

Not sure how financing through the dealership and a bank differ in the states BUT once you get your payments started (not sure how long it will take you to pay it off) you should be able to renegotiate the loan and just have your name on it. Provided that you have made all your payments etc. Mostly likely you will have built up some credit and be in good standing with the dealership.


#11

I'm not sure if dealerships do this that sell bikes, but i know certain car dealerships have programs for recent graduates of college. I think you have at least a good credit score.

I see no problem with a co-signer though. When i was 18 i bought my first truck and my dad co-signed it for me. I never missed any payments and i know if i somehow had a problem my dad would have helped me out.


#12

^^^ Having a good rep with the dealership will go just as far, if not further, then having good credit. So make sure you make your payments.

I know here in Canada, loans help your credit more then revolving debt (credit cards, line of credit). I deal with people who have spotless credit, ok credit, no credit, and bad credit. OK credit is better then no credit. Get your mom to cosign, after 6 months to a year see if they cant get it in your own name if its beneficial for you.

If they can keep the rate or get you a better one, great. If not, dont be stupid. Being in a situation where you have parents that can help you out is ideal for you. The banks see you as less a risk until you get your credit built.

You have no idea how many 20-somethings call in that make sick cash, own trucks and bikes and everything, but cant borrow 10k from the bank because they have never gotten any credit at all. A little credit never hurt anyone, as long as your responsible with it dude.


#13

Best post. You barely have a leg to stand on and you want a $7-8000 bike? Why not go for something in the $2000 range for example? Shouldn't take you that long to save it. Or, start with a much lower principal loan. The economy sucks. This is a great time to by used bikes, boats, instruments, etc.

My first bike was almost 10 years old when I bought it (outright) for $600 (82 Yamaha 750 Maxim), plus I had to learn to work on it which was priceless. I put some hours and a few bucks into it and it got me to class and lasted years.


#14

Seriously, if I had someone tell me this type of stuff (I mean if I listened to the people saying it) I would own my house free and clear, not be in debt and have 20K per year to PLAY with. I mean this when I say it, 12 years in the workforce and I have seen 100K + go towards shit that was a complete waste.

It's probably more but I can't bear to actually crunch the numbers. Start saving NOW Start investing NOW. Money is the best employee you could ever have, it works for you 24/7/365, it never gets sick, never takes a smoke break or a bathroom break, it doesn't ask you for time off, it just fucking works for YOU.

I know you think now is the time you should be enjoying your youth and all that other bullshit. Well let me tell you I'm 30 and feel basically the same as I did at 20, only now I have responsibility and since I didn't do things the right way, I will NOW be 45 or so when I am actually financially free.

I am sure I'll have some good years left at 45, but 55 is definitely on the downswing. That means I had about 20 really good free years. If you bust out 10 right now, living as cheap as you can just throwing money in saving, retirement, investing, you will be WAY past all your friends when you are all 30, YOU will be the one who can do anything and have no worries about doing them.

You will still have your fun NOW because you are young and no matter what you can find cheap things to do that are fun. But when you are 30 you will be able to do expensive things that are fun.

I just joined a summer volleyball league, a local bar is sponsoring us $140, so I get to play volleyball every Monday and it doesn't cost me a dime. Find shit like that to do and be social and save the expensive shit for when you can just write a check for it and it doesn't even phase you.

THAT'S when you will enjoy riding your bike. You walk into the dealer and the sticker says 8K you hand the guy 7K in cash and you ride out of there on YOUR bike, not some banks, or your moms.

V


#15

Welp i bought the bike today. I do appreciate everyones input and respect what you all are saying. Was it a mature purchase no, am i happy with it, yes. So in the end i got a good deal on a good bike and have no regrets, low interest rate and low payments and i should have it paid off in 3 years no complaints here.

Thanks again for your input all, honestly i purchased before reading all of this, would it have changed my decision doubtful, no disrespect to you guys who said i should avoid it but not much was changing my mind.

Im confident in my riding and my finances to safely enjoy my motorcycle without being tight every month worried about money.


#16

Good for you man. Buyers remorse sucks. Now dont drop it!


#17

THIS THREAD IS WORTHLESS WITHOUT PICS!


#18


i posted tits and the bike in the first post!!! haha....but here she is when i got her home...do you like your bike? i really like the naked look


#19

First link didn't post plus I could only assume you had a recent pic of the bike after picking it up!

I love my bike. I plan on hittin a couple track days in the near future and testing out the new suspension. She's not the fastest bike, but she is very flickable and fun to ride.

I like the new bike, man. Have fun and ride safe!