cosigning a loan and getting a life insurance

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nvidia

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hows it going...i have another question to post here and need some advice....My Dad asked me to help him out and cosign a hyundai sonata. So I remembered all the times he took me out to go fishing, how he bought me a cool bmx when I was a kid, how he gave me pocket money when I needed it so I did the obvious...

So my question is when I cosign a car and for some reason my father passes away does the title of the car become the cosigner and will the ministry of transportation change the ownership name accordingly. Also is there some insurance policy at the dealership that I can buy that will pay off the balance of the car if either one of us goes to heaven?
 
I know with mortgage insurance they say it is a bit of a rip off because you pay $X a month but the coverage goes down as you make the payments. if you die in the 4th year of 5 then the bank has peanuts to pay. it is better off to just get term insurance for 5 years.
 
If your dad breaks a leg and can't work, can you afford to make the payments? That is something you should always ask yourself before cosigning for anyone.
 
I think if you cosign a loan it just means that if your dad can't pay, then you are on the hook. I doubt it gives you an interest in the car, but you might want to read what you signed.

You could get a 'joint first to die' term policy for the loan amount. This should be dirt cheap btw, esp. for something like a $30K death benefit (I'm guessing), so if it's expensive you are being sold the wrong type of policy.
 
If he dies the car becomes part of the estate and you would have to fight to get it unless it's written into his will that you get it. The debt obligation would still be yours so if the car went to a family member you hated it could become nasty as they jerked you around.

Insurance is available for just about anything but the catch is the health risk is tied to the premiums. Do you put the costs of the premiums towards the payments and pay off the car sooner or play it safe by buying the insurance. A big chunk of the equation is your dad's age. Is he still working, laid off, on a pension etc. Outside of death are there any reasons for concern about him not being able to keep up with the payments?

Just make sure you are cosigning only for the car. I knew a guy who cosigned a line of credit for his son to buy a van. Then the son ran up a monster tab on the line of credit and dad lost his house.

p.s. Have you considered a lease with a decent buy out at the end?
 
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The previous post isn't correct. If someone dies and there is still a lien or debt owed on the car the estate doesn't get the car unless the estate first pays the debt. So someone else can't get the car and you end up with the debt. You will either get both, or neither.
 
nobbie48 said:
If he dies the car becomes part of the estate and you would have to fight to get it unless it's written into his will that you get it. The debt obligation would still be yours so if the car went to a family member you hated it could become nasty as they jerked you around.

Insurance is available for just about anything but the catch is the health risk is tied to the premiums. Do you put the costs of the premiums towards the payments and pay off the car sooner or play it safe by buying the insurance. A big chunk of the equation is your dad's age. Is he still working, laid off, on a pension etc. Outside of death are there any reasons for concern about him not being able to keep up with the payments?

Just make sure you are cosigning only for the car. I knew a guy who cosigned a line of credit for his son to buy a van. Then the son ran up a monster tab on the line of credit and dad lost his house.

p.s. Have you considered used?
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Fixed. Why a new one? There are ALOT of very nice certified used cars for sale, especially Hyundai's...why put oneself(your dad and/or you) in debt for something that will lose a huge amount of value the second you leave the dealership? Owing money blows chunks, especially if its for something that's going to continue losing value.
 
tim white said:
The previous post isn't correct. If someone dies and there is still a lien or debt owed on the car the estate doesn't get the car unless the estate first pays the debt. So someone else can't get the car and you end up with the debt. You will either get both, or neither.
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My booboo but the cosigner is still on the hook if the estate can't pony up the money to clear the debt. I am assuming that the father may be strapped. The other question is whether there will be a large enough cash down payment to make sure the car is always worth more than the loan amount.
 
johnp said:
I think if you cosign a loan it just means that if your dad can't pay, then you are on the hook. I doubt it gives you an interest in the car, but you might want to read what you signed.

You could get a 'joint first to die' term policy for the loan amount. This should be dirt cheap btw, esp. for something like a $30K death benefit (I'm guessing), so if it's expensive you are being sold the wrong type of policy.
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Will it still be cheap even with my dad being 73 and having gone through surgery. It was a facial nerve surgery.
 
nvidia said:
Will it still be cheap even with my dad being 73 and having gone through surgery. It was a facial nerve surgery.
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The only insurance that may be reasonable in cost for a 73 year old is accidental death because it doesn't have to cover the major risks associated with age. Once a person hits 50 the insurance companies start getting really picky. The cost question can't be answered until an underwriter gets a look at your father's full medical history. Probably not a cheap option.

It is difficult to answer the original question without asking some very personal and maybe sensitive questions about why someone is in a specific situation but without the information we're playing darts in the dark.

The math model for my situation would be ($ I could give away without it having an adverse affect on my family) + (What dad can come up with in cash or credit) = the amount available for a purchase. No third party will contribute to the sum.
 
I sence some evil plot...
 
In essence, you are agreeing to cover the debt so you are putting your credit rating on the line. If you agree to this, you should be prepared to pay the loan off if your father can't and still lose the car altogether. I mean no disrespect to your father but if he can't get a loan from a financial institution and has to turn to you, even if you co-sign the interest rate could still be quite high as the risk he represents will still be part of the risk calculations. As well, at age 73, is your father really in a position to take on car payments? Does he need the car for work or just to get around?

As I say, I mean no disrespect and I hope your father is in good health. As an aside, you may also want to find out if he has a will. It is surprising how many people don't and the last thing you want is for your father to pass away without one.

nvidia said:
hows it going...i have another question to post here and need some advice....My Dad asked me to help him out and cosign a hyundai sonata. So I remembered all the times he took me out to go fishing, how he bought me a cool bmx when I was a kid, how he gave me pocket money when I needed it so I did the obvious...

So my question is when I cosign a car and for some reason my father passes away does the title of the car become the cosigner and will the ministry of transportation change the ownership name accordingly. Also is there some insurance policy at the dealership that I can buy that will pay off the balance of the car if either one of us goes to heaven?
Click to expand...
 
Most credit life policies that are sold at dealerships are group life policies that don't require health assessments, or risk assessments because they are group policies. You do need to disclose pre-existing conditions and you don't get coverage for those conditions if they turn fatal. This sometimes discourages people, as they think it means they don't have any coverage if they die. That is only true if the pre-existing condition is the cause of death. So for example if you have high blood pressure, and you die of cancer no problem - the claim gets paid. However if the cause of death is a stroke related to high blood pressure - no settlement.
To the OP, at 73 your father is probably too old to qualify for dealership credit life insurance. Most of those policies have a max. eligible age of 65 or 70.
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