Expert: Richard Hixenbaugh - 4/2/2009

Question
i am a 19 year old student who also works fulltime. i am looking to buy a new car. i have minimal credit so here goes my question. if i were to take out a loan, with my father as a co-signer, is there anyway possible that i could be insured under my mothers policy?. currently i own a car that is in my mothers name but i am on her policy, but i need to get a car loan for myself and she would not help me out with that aspect of it. she is willing to keep me under her insurance policy but is that possible? i have had mixed answers. i was wondering if it was possible to take a loan out in my name with my father as a cosigner and insure it under my mothers name? i would most likely be getting the loan from a bank. thank you for all the help

Answer
Hi Ryan,

First let me say that you should not have your father co-sign the loan. When your father co-signs the loan, he becomes equally responsible for the loan. So if you lose your job and can't pay the payments, the bank will come after your father to pay the loan. he can be sued if he does not pay and can have his credit ruined as well. Also the car loan will show as a debt on his credit report, so if he tries to get credit himself it may affect his ability to get credit. With the economy as it is, your job may not be stable and I think this is too much of a risk for you to ask your father to take on. At 19 years old you do not need a new car. Save some of your pay each week until you have enough to pay cash for a little better car.

That having been said, if you do this, each insurance company will have their own rules as to how this can be done. In most cases, you, your mother and your father would have to be listed on the policy. Your mother because it is her policy and you and your father because you would both be owners of the vehicle. You will just have to call several insurance companies to see how each one will allow you to do this .

I hope this helps
Richard Hixenbaugh