While you don’t necessarily need a cosigner to buy a car in Los Angeles, having one can help you get approved for an auto loan – especially if you have less than perfect credit. In fact, some lenders may require borrowers in certain credit situations to have a cosigner in order to qualify.

Cosigner Requirements for an Auto Loan

Do I Need a Cosigner to Buy a Car in Los Angeles?Not just anybody can be a cosigner. Your cosigner must meet the requirements before they can sign a car loan contract. This includes having enough available income and a good credit score (at least 660, in many cases).

The lender is going to run a credit check and "debt out" your potential cosigner, which means they’re going to calculate their debt to income (DTI) ratio to make sure they can afford the loan in the event you, the primary borrower, have trouble making the payments.

Keep in mind that your cosigner doesn’t have to live in Los Angeles. They may be required to be present to sign on the loan, but some lenders allow them to fax their signed portion of the auto loan documents.

How a Cosigner Can Help

Now that you know requirements your cosigner needs to meet, how does having one on the loan help you out? To start, having a cosigner could be the deciding factor between being approved or denied. Secondly, you get the chance to qualify for better loan terms because the lender looks at your cosigner's credit, as well. This can help save you money on the overall cost of the loan.

Not only do you benefit from having a cosigner, but your cosigner gets some benefits, too. Once they sign their name on the contract, the loan is added to their credit reports. As long as you're on top of the monthly payments, your cosigner’s credit score is going to improve alongside yours. But if you can't keep up with the payments and your cosigner doesn't pick up the slack, both your credit scores are going to drop.

Can I Add a Cosigner to an Existing Car Loan?

If you’re in the middle of a car loan and you’re considering adding a cosigner, it's possible. To do this, you must qualify to refinance. Refinancing an auto loan is when you replace your current loan with a new one, ideally with better terms that make it more affordable.

In order to qualify, your credit score must have improved since taking out the initial loan, and at least a year needs to have passed. It’s possible to refinance when your credit score is less than perfect and it’s been less than a year, but only if your credit score has noticeably improved since taking out the loan. Most lenders are going to want to see those two things happen before they approve you.

Just like taking out a new car loan, your potential cosigner must meet the requirements listed above in order to be added to an existing loan.

Bad Credit Auto Loans in Los Angeles

Adding a cosigner to an auto loan is a great way to improve your chances of getting approved and possibly even qualify for better terms.

Make sure you ask your potential cosigner if they’re okay with being on the loan, and let them know what their role is going to be. A good tip is to also discuss a backup plan with them in the event you can’t make a payment(s) – you and your cosigner don’t want to risk damaging your credit scores with late payments or a repossession.

When you and your cosigner are ready to get the car loan process started, let Auto Credit Express help you find a dealership in the Los Angeles area that can work with you. We connect consumers to local dealers that are experts in bad credit financing. To get started, fill out our free and quick auto loan request form today!