Overhaulin'

What is are the laws regarding minors and car loans?

My younger brother is 17. He wants a car and neither his mom or my dad will co-sign for him. My husband and I told him we would, but my brother's mom told him that he can't legally get a loan without her concent. I used to work at a bank and I know that minors cannot open a bank account without an adult, but the adult does not have to be the minor's parent. I have been searching the internet for the law in Illinois regarding this issue, and I can't find anything. Can someone help?

Public Comments

1. you have to be 18 years old to enter a legal contract so, there isn't anything you can do for him, and purchasing a car is a legal contract.
2. You are 100% correct on that! As long as the minor is 16 years of age or older and has a drivers license, the parents can't really stop you from co-signing for him. Especially if you are his older sister it makes no sense why they would think that if you co-sign for him he could not get a loan. Normally it would be that the parents were always in the right and we kids were in the wrong, but not this time. I wish you the best of luck in helping your little brother purchase the vehicle he has been dreaming of I'm sure. : )
3. Since he is a minor, he cannot enter into any kind of binding contracts until he is 18. There is nothing that states that the adult co-signing a loan for a minor HAS to be a parent or guardian. The only thing is, if he defaults on the loan you will then be responsible for the loan (but since you used to work @ a bank, you should already be aware of what you are getting yourself into if he defaults on the loan). If you haven't considered this yet- he's going to be in the same position when he goes to get insurance & his tags for the car. Can't due to being a minor. Good luck.
4. He cannot legally sign a contract until he is of age. Don't cosign for anyone, it could hurt your credit for many years to come. If you don't take my advice, then have him send you the payment each month and you make the bank payment. If he fails to send it, then you will have to pay it and go after him.