As a cosigner, you don’t have any ownership rights over the vehicle, even if you’re the one stuck making the payments. Payments and ownership are two very different things. If your name isn’t on the title, you can’t take the car if you’re a cosigner.
The Pros and Cons of Cosigning
Cosigners can be the proverbial feather in the cap of a bad credit car buyer who needs that extra little push to get approved for a car loan. But despite putting your credit on the line and agreeing to pick up the slack if the primary borrower misses payments, as a cosigner, you don’t carry much clout.
Your credit is tied to the borrower’s credit. So, building credit as a cosigner on an auto loan depends partially on the primary borrower. If they’re a responsible borrower who’s serious about their car loan, your credit can improve right along with theirs if they make timely payments. This situation can be a catch-22, though. It can be hard to make payments on a car if the borrower pays slow or has stopped making payments. But, if you don’t make on-time payments yourself, your credit will suffer right along with theirs.
Cosigner Responsibilities and Rights
If the person you cosigned for drops the ball, you already agreed to make up for this – that’s part of being a cosigner. But, if the worst happens, you have some rights, too. When the primary borrower is having trouble, the best case scenario is they’ve spoken with you and you both work something out so that car loan payments remain up to date.
If that’s not the case, you may be surprised when a lender calls you or sends you a notice. As a cosigner, you’re equally responsible for any payments. But if you can’t or won’t make them, a lender does have the right to take action against you.
If the vehicle gets repossessed by the lender, you’ll retain certain rights concerning the car sale, just like the primary borrower. These rights include receiving written notices at various stages of the repossession process, including the right to redeem the car, reinstate the car loan (in some states), and the opportunity to be present and place bids when the vehicle is auctioned, to name a few.
Where to Turn When You Need a Car
As a cosigner on a loan, your credit score is affected by loan payments. So, if the primary borrower hasn’t kept up with their payments, not only could you get stuck with a collection notice, but it could be difficult to qualify for your own loan if you need a vehicle. That’s when Auto Credit Express can help.
If you find yourself facing a lower credit score from a cosigned auto loan, you’ll need to find the right lenders, and not all dealers work with them. We work with a coast-to-coast network of special finance dealers that have lenders available to work with people who are struggling with credit issues. Getting the process started is simple, just fill out our online auto loan request form, and we’ll get to work matching you with a local dealer today!