Paying an arm and a leg just to establish your credit score isn’t the only option for this generation of young adults. For teens and 20-somethings looking to finance their first vehicle purchase, having a parent co-sign can make the process a lot smoother – and much less expensive. I regularly work with parents who are struggling to decide whether or not to co-sign their kids’ vehicle purchases, and this is what I tell them.
3 Reasons Parents Co-Sign Their Kids’ Vehicle Purchases
First things first, I understand where you’re coming from. There’s no shortage of online advice claiming parents shouldn’t co-sign for their kids, but for some families, those reasons don’t measure up. If you’re wondering why co-signing your kid’s vehicle purchase might be a smart idea, I have three reasons for you.
1. Parents Get a Say in the Vehicle
Tasked with choosing their own vehicle, some young drivers might buy a vehicle that doesn't meet all their needs. They don’t have their own car buying experiences to draw from, and they may be persuaded by qualities and features that don’t really matter in the grand scheme of things. When you co-sign a vehicle purchase, you have more of a say in the vehicle they choose.
2. Parents Care about Their Kids’ Safety
To your kids, a newer vehicle might mean a cooler look, a better stereo, and access to dashboard apps. But helping your child into a pre-owned vehicle benefits parents too. I’m talking about safety. Each year, better safety guidelines and features roll out, and vehicle manufacturers are always looking for ways to increase their ratings. Co-signing for your child can help them afford a safe, reliable vehicle, which translates into less worry when they're out on the road.
3. Parents Know Their Children
As parents, we have a pretty good idea of how responsible each of our kids are. Sure, there’s always a few surprises that sneak by, but for the most part, we know. And in that same vein, you probably have a pretty good idea whether your kid would take a vehicle loan seriously or not.
So, my final piece of advice for parents struggling with whether to co-sign or not might sound familiar: use your best judgment. No scenario and no family is 100 percent the same. You know your child, and you know your circumstances. If you think co-signing will work for you and your child, you’re probably right.