If you are thinking about co-signing for someone, you may ask yourself, "Does a co-signer have rights to the car?" The simple answer is: no, they have no legal rights to the car loan. However, you can work with the main borrower to ensure that all payments are made and that the term of the loan runs smoothly.
Auto Loan Cosigner Rights
The first thing you need to understand is the difference between a co-signer and a co-borrower. A co-borrower is someone who shares the same property rights and is usually a spouse. On the other hand, a co-signer is Someone who signs the car loan to help the main borrower get approved.
A co-borrower has ownership rights to the car, but a co-signer does not. The reason is that the income of a co-signer does not amount Is not added to that of the main borrower for the income requirements of the loan. While a co-signer must meet the income requirements, his name is not listed on the title, so he has no legal right to take the car.
What if a car loan is used by default?
Unfortunately, if the primary borrow If you default on the car loan, you cannot repossess the vehicle as a co-signer, even though you are responsible for all payments. Once you have signed the loan agreement, your credit is also affected. When the primary borrower defaults, the lender comes to you to make sure payments are made. The best way to avoid this is to talk to the main borrower before missing payments. Discuss with them how you can temporarily help as a co-signer without affecting the creditworthiness of one of you.
So, although a co-signer is responsible for payments, if the primary borrower does not and their credit is impacted by the loan, they have no ownership rights to the vehicle.
Finding car financing after repossession
It is important that you understand what your rights are as a co-signer, and What it means to be a co-signer. Talk to the main borrower and ask questions before you sign. You put your credit – and in some cases your finances – on the line. So make sure you understand what it means to intervene to help.
On the other hand, if you need a car loan and have less than perfect credit, Auto Credit Express wants to help you find funding. We work with a nationwide network of specialty financial traders who have the credit resources to work with people in many difficult situations. Fill out our free, no-obligation online car loan application form online to start the process of matching with a local dealer.