Asking a loved one to cosign on a car loan requires a heavy dose of vulnerability. It means admitting that you need help, which can often lead to feelings of “not-enoughness” and inadequacy. Buying your first car is supposed to be a time where a true sense of independence takes center stage of your life; like the world is at your fingertips and all that’s separating you from living your best life is a new set of wheels. Being told you can’t get a car without a cosigner can feel like a humiliating punch in the gut. You finally moved out of your parent’s house, you’re ready to take on the world, and the dealership sends you right back to mom and dad! Instead of empowered by responsibility, you feel powerless.
Searching for a cosigner means you need to rely on someone else, hoping they’ll fill an impossibly big ask, while knowing you’re putting them in a compromising position that can potentially damage their credit. Independence shouldn’t come with an emotional consequence or a price on a relationship. But it does.
We got curious about how the cosigning experience affects lives. We gathered a few Suretys team members and asked them to remember their first cosigning experience and to share their personal insights with us. What we got in return, are a collection of meaningful stories and sage words of advice. We learnt asking someone to cosign on a car loan is no small feat. It can shape a relationship, impact trust, and make all the difference in someone’s life.
Ed Bolles, Co-Founder & COO
It was the summer of 1984. I graduated with my Computer Science degree and landed my first “real” job at Aetna Life & Casualty. Work required a 25-mile commute one way, and I needed a car. I borrowed my parents’ car for a while but craved my independence. Dad grew up through WWII and the Depression, and we clashed with my post-college attitude. I went to the local VW dealership and picked out a red Jetta sedan with a super cool ski bag option to suit my adventure lifestyle. There was a stick shift and 35 MPG, and I thought it was the perfect car. Then came the hard part. I met with the finance manager and was told even though I had a great job making good money, there was no way he could sell me the Jetta. Confused, I ask why. He told me I need a cosigner. A what? He told me to go home and ask my dad to come back to cosign for the loan. I was so let down, wasn’t there some other way? I explained that my dad and I both wanted independence from each other. He said this was the only way for me to get a car.
With a heavy heart and a dose of humility, I asked my dad for help. My ego was hurt, but my dad was great, and he agreed to cosign.
I got the car I loved, made every payment on time, and drove it for years. I’m glad I can tell this story beyond my ego and recognize the trust my dad had for me. One of the big reasons I signed up to bring Suretys into the world, is my desire to empower people with income to have financial independence.
Jeremy Steben, Director of Product Development & Quality Assurance
For the first seven years after moving out on my own I lived in cities where everything was either within walking distance or accessible by public transportation. A car was an unnecessary luxury. By the time I moved back to the suburbs for a new job, I had gotten to the point where I wasn’t living paycheck to paycheck and was looking forward to affording my own apartment without roommates. I got a ride in a carpool for a couple of months while I saved some money to ensure this was a permanent move.
When the time came to purchase a car, I went to a local credit union to get a loan. I was completely confident walking into the office, there was no doubt in my mind I would be leaving with a signed contract. I was buying an incredibly cheap used car directly from an acquaintance. It was 9 years old and though in good condition it wasn’t worth that much. I had estimated that my monthly payments would be under $200 a month, even if my interest rate was on the high end. I had a decent (though not great) credit score, money in the bank, pay stubs indicating 6 months of local employment with a salary that was obviously sufficient to make any payments. I thought it would all come down to filling out paperwork. I was completely floored when they informed me, I needed a cosigner.
I was confused as my credit score should have been more than adequate. Turns out that Credit Unions aren’t going by numbers alone. My credit report was sparse. I had a student loan I was making payments on, and I had one credit card from my bank that I never used and sat in a drawer. There was also a lack of any prior auto-loan, as this was my first car, which made me a “first time buyer”. Between the lack of any history of revolving accounts and no auto-loans I was classified as a “thin credit” customer and would require a cosigner.
This hit me like a punch to the gut. This most recent apartment was the first where I hadn’t had to ask my mother to cosign the lease. The thought of having to ask either one of my parents at this point in my life was humiliating. It wasn’t even an option though, they were making their own financial moves at the time and asking them to drop their credit score with an additional account was out of the question.
I walked out of the Credit Union dejected and embarrassed. I had no idea what to do, the thought of asking somebody other than my parents to cosign a loan was inconceivable to me.
It’s more than just a simple favor. You’re asking another person to trust you with their credit score, something that impacts their ability to get very important things when you need them the most.
As it happened, I had someone offer rather than having to ask. As soon as I got back to work my manager (and new friend) asked me how it had gone at the credit union and of course I sourly filled him in. He offered to cosign immediately.
I was incredibly grateful, both to my manager for the offer to cosign and to the universe for neatly solving my problem. My manager was on a work visa and was familiar with the issue of thin credit and first-time buyers. The only reason he’d been able to secure an auto-loan was when a co-worker cosigned for him. He was passing on the favor with judgment free!
Internally, I was still frustrated and embarrassed that I had to impose my own financial issues on my boss’s credit report. I knew that his cosigning would drop his score, even if it was only for a relatively short amount of time. It was the thought of late or missing payments that gave me anxiety. The thought that a mistake on my part would suddenly appear on my friend and boss’s credit report and could affect him and his entire family caused me no small amount of irrational anxiety. I set up autopayments, but for the first six months I would obsessively check to make sure the latest scheduled payment had gone through and often had a sick, queasy feeling in my stomach until the payment history page loaded.
Looking back, it’s easy to say that securing a cosigner is only a small hurdle to clear to get a car, but at the time it felt a great deal bigger to me.
I was lucky. Not everyone has co-workers or even friends who are both willing and capable of cosigning. At another job this may have been an insurmountable problem, requiring me to go the sub-prime route. Suretys would have been the perfect product for me. Instead of feeling inadequate and embarrassed I would have walked out of that office triumphant, my memories of my purchase would be pleasant instead of decidedly mixed. I wish it had been around then and I’m glad to be able to help others have a better car buying experience than I did.
Stephen D. Rappaport, CMO
I bought my first car at 23. It was a brand-new Toyota Corolla. I paid half in cash and financed the rest so I could start building my credit. I was fortunate. The dealer was a neighbor, and the loan came from an S&L (savings and loan) my father did a lot of business with. Today I have a 26-year-old son, responsible as the day is long, who may want to lease or buy a car one day.
Would I cosign for him? No.
He needs to start building his own credit history and I don't want to be on the hook in case he has trouble paying back the loan. I'll be in the market for a house or car soon and I want to keep my credit as bright and shiny as it can be.
Suretys: Meet Your New Significant Other
Suretys knows buying a car is complicated. Convincing a parent or a friend to cosign for you adds a lot of pressure. What if you had your own PLUS ONE? Suretys replaces the need for a cosigner and becomes your PLUS ONE. The proof is all in the word “significant”: SIGN IF I CAN’T! Suretys takes the weight off while you take the wheel. Learn more here and visit plusone.suretys.com to join the movement.