Question:

Should I buy a car under my name?

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Hi, I am currently driving a car under my aunt's name. Basically my aunt bought this car and for some reason she realized that she can't afford the monthly payment. Instead of returning it back to the dealership me and my wife decided to take over the payment. Now my question is, I've been paying this car for a year now. I am paying $400 and the loan is for 6 years. Me and my aunt had a written agreement that once we pay off the car the title will be transferred into our name. But now I am thinking of getting a car under my name from a dealership. Because i think we are paying more for that car than what we are supposed to. But the dealership will approved me with a hight interest rate due to bad credit. My only concern why I want to bite the offer from dealership is that it will help me re-establish my credit history. Please let know if it's worth it.

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  1. 1)  Do you like the vehicle that you are driving and are you only interested on buying a car to help fix your credit?

    If this is the case and paying $400/month fits your budget...then I would recommend for you to do the following:  There are some car leasing companies that allow you to purchase the vehicle after 5 leasing years.  Call the leasing agency and ask them If this is an option and if the lease can be transferred to your name (even if your aunt remains as collateral in the agreement).  If they allow you to do this, just make sure you make your payments on time and do not get behind to avoid messing up your credit more....If not I would recommend for you to not continue to make the payments for your aunt, this could cause family problems in the long run.

    2)  If what you want is to fix your credit...then the number one thing you should avoid is acquiring a high variable debt...in other words....buying a vehicle on finance.....here is why:

    The value of any vehicle, whether used or new, will depreciate by at least $1,000 when you drive it outside of the dealership...so lets say you bought it and decided to return it after having signed a contract and driving it 10 miles,....you might not get all your money back...

    Financing a car is what is considered a bad debt not a good debt...

    3)  To fix your credit, I would recommend for you to do the following:

    *****Start by making sure you make any payments (yes including your electricity, cable, and rent) on time....believe it or not this counts.

    *****There is usually a jewelry store in any mall that approves you for at least $300 credit in their store....request credit from them....purchase something that is no more than a third of the credit they give you (no more than $100 dollars).  Every month pay the minimum payment plus $5.00....this will start increasing your credit score....Gold/Jewelry does not loose value--Your debt is low which means your payment will be low as well.  You should see your credit score increase by the third month from your purchase.

    *****Do not, again, DO NOT, get a clothing store credit card for it is easier to get in debt...clothes loose their value.

    *****Get a credit card from a bank---usually if your credit is terrible, they will only give you credit if you have a balance in it (note this is different than a debit card).  Use your credit card to put gas every month (again spend no more than a 1/3 of your credit allowed) and pay the minimum balance + $10 every month...

    Believe it or not if you do this your credit score should go up by at least the third month


  2. Hummm what if something happened to the Aunt while it's still in her name? Her heirs might not want to honor what your aunt and you agreed upon and take the car and then what? If your aunt or you buy a car from a buy here and pay here lot you might not be establishing anything? I learned that the hard way after purchasing a $3.800 pickup truck that not all those places help fix your credit rating so you have to be careful! If it is a regular car lot then they will help your credit rating but like you said "it will cost you" in the line of higher payments so you must decided if it's worth the paying out of the extra money to get your credit improved? That would be up to you? You could try one of those secured credit cards where you pay a start up fee and as you go along and make payments on time it improves your credit rating while purchasing your Aunts car at a low fee as you have been. That might be the best thing to do? Just make sure the credit card company isn't a rip off by checking them out first with the Better Business Bureau to make sure they are safe. It's a complex world huh?  

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