How to Buy a Car with your Spouse?
Buying a car with a spouse involves both your incomes, debts and credit scores. So, do not make a hasty decision because a car is a big financial investment. Think hard and discuss your financial situation before you become co-buyers for your car.
Ever thine, ever mine, ever ours! - Beethoven
Once you say ‘I do’, there is no such thing as ‘mine’ and ‘yours’. Everything you own or will own in the future becomes ‘ours’. As a married couple, you may feel like bringing together your resources to buy something. It is a noble thought but when it comes to making a big investment such as a car, tread lightly.
Buying a Car with your Better Half: Deal with Bitter Questions
Buying a car involves making several decisions. You have to consider the type of car that you want to buy. But, before saying ‘I do’ to buying a car with your spouse, you will have to ask each other a few hard questions.
>>What size of car will suit your needs? Also, decide on who will be driving the car most of the time. It will help you to narrow down your options.
>>If you are going to expand your family in the near future, you must consider a kid-friendly car such as a minivan or an SUV.
>>Consider the budget of the car. Will both of you contribute towards the monthly car payments? Are your incomes adequate to manage the car payments along with other debt obligations?
>>Will you be able to manage a down payment? Usually, young couples have hard time getting together money after an extravagant wedding. So, consider your financial situation before visiting a dealership lot.
>>The D-word is often off-the-table for young married couples. However you must remember that in a situation of divorce, a co-buyer will be responsible for the car even if he/she doesn’t use it. Also, division of assets can be a problem when you own a car with your spouse.
A Co-Buyer or a Co-Signer: The Big Auto Loan Question
Discussing the size of the car and the budget are simpler things compared to the big question of auto loan. It is not necessary for your spouse to have a good credit score. A few late payments in the past may have rendered a stain on your credit report as well. You need to discuss your financial situation and credit score before buying a car.
If you are a co-buyer, both of you will be the owners of the car. When you are a co-owner of a property, you and your spouse are responsible for the ownership of the car as well as the auto loan. The lender will review your credit score and your partner’s score to judge your joint auto loan application.
When you become a co-signer for the auto loan, you will only be responsible for the auto loan. You will have no ownership rights. It means the lender will not consider your personal income for approving the loan. But, remember that as a co-signer, the lender will require you to have a good financial standing as you will have to make payments if your spouse is unable to make them.
How to make a Decision?
Who has a Stable Financial Situation?
If your partner earns a good income and has an impeccable credit score, he/she will be able to increase your credit worthiness. The lender will consider his/her income to ascertain the loan amount. It will also help you in lowering the interest rate. With a stellar credit application, the lender may be tempted to provide you with a high LTV. So, when your spouse has a stable financial situation, you can ask him/her to become a co-buyer.
When both of you have average credit scores, sit with a loan officer to make a decision regarding the primary borrower. After considering your incomes, debts and credit scores, you will be able to make a secure decision.
When is going solo the Best Option?
In a real-life scenario, marriage doesn’t always mean being equal. One of you may have significant credit card debt. It is possible that you may still be paying your student loan. There is a possibility that your partner is just starting his/her career and doesn’t possess a good credit score. In such a situation, you have to think twice before making a decision.
If you think that your spouse is not financially responsible, it is best to buy the car on your own. Also, many spouses feel more confident when they have financial autonomy. So, think hard and do not be afraid to ask uncomfortable financial questions. Buying a car is a big responsibility. And, if you are not sure about taking the plunge, it is best that you become the sole owner of the car.
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ABOUT THE AUTHOR
RapidCarLoans.net, the bad credit Texas auto financing company, works with spouses to help them in becoming proud co-owners of a new car. And, if you need to buy a car on your own, no cosigner car loans will solve your problem quickly. Get in touch with the company to simplify your car buying process.