Before agreeing to become a cosigner on any loan, but especially an auto loan for someone with bad credit, potential co-borrowers need to be aware of the risks involved as well as what their responsibilities might be.
Consumers with problem credit might want to look over results of a 2012 study on vehicle repair costs conducted by the National Highway Traffic Safety Association (NHTSA) before signing up for an auto loan for their next new or used car.
Consumers that currently have poor credit often don’t understand that as their credit scores improve during an auto loan so do their chances at having their identities stolen.
Just because lenders that offer bad credit auto loans would never finance a used car with a branded title doesn’t mean some unsuspecting buyers won’t be making payments on one.
With the higher interest rates that lenders charge consumers with bad credit, it doesn’t make a lot of sense to stretch the payments out for the longest term possible.
At Auto Credit Express, where we primarily deal with car loans, applicants with bad credit sometimes ask us, “What credit score do you need to lease a car?”