Big down payment may lower loan rate
Dear Terry,
I was thinking about buying a new car next year. I have a job and some money saved up, but I have no credit. As a result of having no credit, will I get a low interest rate or high interest rate?
-- First car buyer
Dear First,
It's an unfortunate Catch-22 of the credit business that the two types of people who suffer low credit scores are those who have abused their credit and those who have never had credit.
Because you have no credit history -- and lenders have no basis on which to judge whether you will faithfully pay them -- you're not likely to get an offer with a low interest rate.
But you can help lower the interest rate by making a substantial down payment, which shows the lender you have more at stake in the deal and may be less likely to default on the vehicle.
Bargain hard when buying lease vehicle
Dear Terry,
I am considering buying the car that I am now leasing, a Volvo S80 with very low mileage (under 18,000). The lease ends on Oct. 27 of this year.
Is that a smart thing to do? If so, how should I approach the dealer about this?
-- Nadia
Dear Nadia,
You should be in an excellent position to bargain with the leasing company for purchasing that Volvo. Right now, leasing companies are swamped with lease returns that are worth less than the agreed-upon value when the lease began.
Start by offering 10 percent less than the amount in your contract and go from there. It's not a guarantee that the lease company will budge, but it's well worth the effort. Even if you buy it at the residual price in the contract, it may still be a good deal given how few miles are on the car.
Consult a lawyer if you co-sign loan
Dear Terry,
My husband co-signed an auto loan for our son. The car is registered in my son's name -- my husband's name appears on the loan only.
If our son was involved in an accident with injury to another party, could we be sued or in some way held responsible?
-- Susan
Dear Susan,
In our litigious society, almost anyone can sue anyone else. So, there is always the risk that your husband could become involved.
You don't say what age your son is -- if he's a minor, that changes things -- or what control, if any, you have over the car. It also matters whether the car is fully insured.
My best suggestion for your peace of mind is to consult a lawyer.