Two Mistakes in One
by Dave Ramsey

I was dating someone that I expected to marry, and then we broke up. Before that, she was having car problems and I co-signed a lease with her. She still has the car, and so far she’s made one payment and I’ve made one. We have a forfeiture agreement on the car that states if she doesn’t make a payment by the end of the month, I come get the car. Now, her parents have offered to buy her another car and she wants to just give me the leased car. I’ve already got a leased truck, so what’s the best thing to do?

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Dear Dave,

I was dating someone that I expected to marry, and then we broke up. Before that, she was having car problems and I co-signed a lease with her. She still has the car, and so far she’s made one payment and I’ve made one. We have a forfeiture agreement on the car that states if she doesn’t make a payment by the end of the month, I come get the car. Now, her parents have offered to buy her another car and she wants to just give me the leased car. I’ve already got a leased truck, so what’s the best thing to do?

Darrell

Dear Darrell,

Well, you’ve already done two of the biggest things I tell people not to do – you’ve leased a vehicle and you’ve co-signed. That two big no-no’s at once!

If it were me, I wouldn’t take the car as fulfillment of the amount she owes. She needs to find out what the buy-out amount is on the car, sell it and pay the difference to the lender. If she doesn’t have the money, her parents could pay the difference since they’re offering to buy her a car anyway.

The reality, Darrell, is that you are going to have to take control of this situation. If she won’t do something right away, you’ll have to take the car, sell it and finance the difference. Let her know if it comes to that, she’ll be seeing you again because you’ll sue her for the amount you had to finance.

The lender will call her once or twice, but they’ll call you a dozen times because they know you’ve got the deep pockets. She’s not good for the money, and they know that. That’s why they wouldn’t lend her the money without you as a co-signer!

Don’t let the car be repossessed, either. They’ll take the car and sell it for less than wholesale value, then come sue you for the difference. I know you were just trying to help her, but now you’re legally responsible in this mess, too.

This is a great example of why you should never co-sign for someone – even if it’s someone you’re planning to marry!

Dave

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