The process of purchasing a vehicle can be complicated enough. From annual percentage rates to GAP insurance and extended warranty, it seems the intricacies of auto finance are never-ending. Add terms like “co-signer” into the mix, and you’ve entered a whole other ball game!
If you’ve recently been shopping for cars, you may be wondering what a co-signer is, what it does, and whether or not you’ll need one to purchase the vehicle of your dreams. The answer isn’t black and white.
In fact, several factors can impact whether or not you need a co-signer. Here are a few ways to determine whether or not you’ll need a co-signer to purchase that new vehicle you’ve got your eye on.
Do I need a co-signer?
You might. You might not.
If you are seeking a hefty loan, but don’t have the good credit score to back it up, your lender may request that you acquire a co-signer. This person is usually a family member or friend with good credit, who promises to pay back the loan should you not be able to. It’s not a decision to be taken lightly, but if you have a good history of on-time payments, a co-signer is a great solution to help you get the car you truly want.
Some factors that may determine your need for a co-signer include your credit score and the amount of loan you’re seeking, among other things. If you need a new vehicle, but you’re certain your credit score is not great, you might want to already start considering a co-signer early on. Of course, this will make the process with the finance department run much more smoothly.
A co-signer is a benefit to both you and your lender. Ultimately not only does your lender gain peace of mind from knowing you will repay your loan, but you may also walk away with a better interest rate, given the good credit of your co-signer. Bringing on a co-signer during your car buying journey may be just the ticket to driving away in an awesome vehicle you can feel good about.
Need help with auto finance?
In the market for a new or used vehicle? Our Ed Payne auto finance department can help you qualify for your dream ride. Visit us to view our latest in new and used from Ford, GMC, Chevy, Dodge and so much more!
