More succinctly: fraud
And, as you say, a good way to end a friendship.
OP: they can buy a good used car or find alternative transportation. Just don’t.
7 Likes
Echoing prior comments - don’t do it. If your name is on the contract, you are still liable and exposed, however you put it.
2 Likes
I know… but i have no choice but to help him. he don’t got anyone here that can help him. he don’t have that much money to buy a used car… So worst case if he cannot pay I’ll do the remaining payment. Thank you all… Hopefully our friendship do not end here… Crossing finger…
Plus he already got a job offer and are starting to go to work in December… So he should be able to pay the monthly payment…
There should be many ways to get a car if he’s got an offer letter.
3 Likes
Then find a way to help that doesn’t involve committing fraud.
Restated, your question was, “Is it possible to fraud?” And the correct answer is, “If you find a car dealership so incompetent as to allow you to fraud, still DO NOT FRAUD”.
2 Likes
Also this has been discussed many times, if you search for “straw purchase”
Unless you are domestic partners (cohabitating with some joint finances) it’s not even close.
1 Like
I would be interested to see a legitimate source where the law defines the straw purchase clearly and how much it applies to OPs situation i.e. co-habitation. Quick google search says its illegal without referring to anything.
I suspect what one would find us that it falls under fraud as it’d be misrepresenting information in regards to the lease contract and that any leeway regarding cohabitants/spouses would fall under the language of the contract.
1 Like
IANAL but it’s a state crime, we have cited specific state citations in the past.
The fraud is in the lease contract: you agree to rent the collateral, for the terms, and you won’t assign it to anyone else on the captives behalf. They aren’t leasing OP the car to sub-let it to someone whose credit bureau is a ghost.
Every finance manager in every dealership is trained on antifraud rules (among many others), lest they go to jail (which happens occasionally).
1 Like
Makes sense. Probably with a clause that permits the use of the collateral for family members of the same household.
IANAL either, but as a young 20 something, I was involved in one before I knew it was an issue. Years ago, my dad ran into some significant medical bills and I leased a car for him due to him filing chapter 13 to get out of the situation.
Long story short, I made mention of this in the finance office, and he ripped me a new one, said never to mention it again and pretended he didn’t hear it when it went to underwriting. He explained later what I was proposing was illegal, said he could get into serious trouble over it and was essentially committing fraud by pushing the note through. He said because I was naive, and didn’t know any better, had some compassion for me and let it slide.
Now, if buying a car for my own father, flesh and blood, was considered a straw, certainly this is fraud being just friends with no familial connection.
I am in no way suggesting someone do a straw, and now that I’m older and understand, I wouldn’t do one again.
4 Likes
I also suspect that the insurance company will not pay any claims on this if such kind of fraud is committed.
that’s why I said used car not leased car, that way payments are low and you aren’t committing any fraud.
Is the friend going to have same address as you? If not, bigger issues. If he is going to live with you in same household for duration of lease, it’s no different than leasing and allowing your son to drive.
I haven’t seen anything that says that’s a true statement
We are talking in generalities here. There are general federal laws but not about straw purchases. Rather about lying on loan agreements. OP needs to be honest about straw purchase.
For example, a family friend just leased a car solely for the use of their au pair since she is a 19 year old Columbian who obviously can’t lease/finance a car herself. Is this, on its face, illegal? Their attorney said no. But if the woman uses the car for non-business purposes it is taxable remuneration.
My guess would be the only issue is the finance agreements and lying on them. Co-signing is likely the best way forward here cause that would deal with any issues involving disclosure on the finance agreement. I don’t know how liability works but OP also should make sure they aren’t secondarily liable for any accident (if damages exceed insurance coverage and friend can’t pay judgement). I don’t think co-signers are normally liable beyond making finance company whole but I don’t know that and it could vary by state.
2 Likes
I mention the issue isnt the straw purchases it is lying on the finance application. Co-signing solves this issue. As does seeing if a dealer will let him list his friend as the primary user of the car/disclosing the relationship. I’ll edit my post but all OP needs to do is be honest. Straw purchase isn’t illegal. Lying about straw purchases is the issue. But even then it’s a bit of an open question. Like if OP’s friend intends to return perform services for OP in said car, then that may allow OP to legally purchase the car in his name.
I don’t know that I have ever seen a lease contract that says “I’m leasing this on behalf of someone else” though, so can one even do a straw purchase that isn’t fraudulent?
1 Like
Why don’t you have any other choice? He doesn’t have any savings to buy a 10k used car?
OP (seems to be long gone) did mention his friend already has an offer letter, he should be able to get a car albeit with higher interest rates. Maybe time to put this thread to bed.
2 Likes