More Parents Asking Kids to Co-Sign for Car Leases
The explanation for the trend: Foreclosures, job losses, short sales and missed credit card payments have left many Americans with damaged credit -- and they're looking to their kids for help.
So here's a little advice for the kids. This is what will likely happen if you co-sign for a car lease for your parents: Mom or dad will miss payments, you'll end up with a bunch of late payments and a repossession on your credit report, and you may well be sued for the difference between the value of the car and the amount owed on the lease.
How can I be so sure that's what will happen? Simple: Because if the person taking out the car lease could afford the payments, they wouldn't need a co-signer. The lessor knows it, too: That's why they demanded a second responsible party on the paperwork.
What is so appalling about this is that the parents in question are picking up car leases with an average monthly payment of $399 -- meaning that they're choosing to drive unnecessarily expensive cars at a time when they can't afford them, and mortgaging their children's financial futures in the process.
Bottom line? If your credit is too poor to get a car lease, don't ask your kid to co-sign. Instead, scrape together $1,000 (if you must, ask your kids for a gift), go on Craigslist, and get yourself a crappy car. You'll be a lot happier in the long run.
No parent has the right to drag their child down into the financial gutter with them -- especially not over something as moronic as a $399-a-month car rental.