Finance 2 cars at the same time...how does that work?

Question

I am financing a car now but want to get a new one and let my friend take over payments of my first car (she has bad credit, so the car will remain in my name). Do I have to have additional credit to have 2 cars financed under my name? Will I be charged a higher rate or does it not make a difference? Thanks.

Answer 1

Unless you have smokin' good credit and lots of income the bank will want to know WHY you're trying to finance two cars. They are not keen on lending money unless they have good reason to do so.

Are you married? Single? Divorced?

The bank will hesitate to lend money to a single person for a SECOND car without a REALLY good reason to do so.

And if you tell the bank that your current loan will be paid by a friend they'll hesitate even more. If she stops paying, the debt falls on you. Can you afford two car payments? She has bad credit, right? So what makes you think that she'll pay the car note on time? Her word? She's obviously made prior financial agreements with lenders that she bailed out on, right? That's why she has bad credit.

The bank knows this and they are going to make sure thier investment is protected. What assurance do they have that if your friend stops paying on the1st loan you'll not stop paying the 2nd loan to protect the 1st?

Again, can you afford both?

Unless credit is super-duper good and income is very high the bank will want an excellent story as to why you need two cars.

Oh, and keep in mind that you'll still be legally responsible for insuring the vehicle. Technically she cannot insure a car that she doesn't have ownership (partial or otherwise) of.

So, yes, you can finance two cars at the same time but it is not easy to do. Bankers are too careful with their money.

You should be too.

caveat emptor.....

Answer 2

There is no problem with financing two cars at once as long as your score is ok and you don't exceed the maximum amount of debt obligation that banks like with respect you your income.

Just be careful about letting your friend "take over" payments. This is generally a really bad idea. First of all you are responsible for the payments, not your friend. Any agreement you work out with her is between you and her and the bank doesn't care. If the car is in a serious accident or otherwise used inappropriately, you may be responsible for damages. If your friend decides to stop paying for some reason, you credit is the one that will be trashed. I would strongly advise you against this. Even getting a bad loan and paying it off slowly, will help your friend's credit more in the long run.

Answer 3

2 Car Finance

Answer 4

When you are approved for a loan, your credit score is what the financial institution will check. Your credit score reflects your credit history (for instance, open credit cards, car loans, student loans, mortgage etc), the score also takes into consideration your payment history(whether you have had late payments or not). So if you have a good credit score you should be able to get another loan for another car with no problem.

Although I would like to bring to light that if you keep your loan for your first vehicle in your name, YOU are responsible for the payments. Therefore, if your friend decides one day that they can't afford them and stops paying, then your credit score will suffer and could potentially affect your ability to get loans or credit cards in the future, not to mention you would then be responsible for making the payments.

There are some survey's for free online that will allow you to calculate a ball park credit score for free. I've used one through MSN before, but I don't have a link.

Answer 5

You just have to have really good credit.

With your friend taking over the payments, keep in mind, if she fails to make the payment, you still need to make the payment, or the car can be repossessed, and it will all be under your name.

Answer 6

Thank you everyone for the answers.

Answer 7

Yeah it might be correct