A co-buyer on an auto loan isn't the same as a cosigner. They sound similar, but their respective roles are very different. One can help you get approved for a car loan if you have bad credit, while the other can help you meet the income requirements.

Auto Loan Co-Buyer’s Role

What Is an Auto Loan Co-Buyer? Is it the Same as a Cosigner?A co-buyer, also called a co-borrower or co-applicant, is typically a spouse who signs an auto loan with a primary borrower. When a primary borrower and a co-buyer are spouses, they can combine incomes.

Having a co-buyer on a car loan can therefore help if the primary borrower lacks the income needed to qualify on their own, or if a married couple simply wants to team up in order to qualify for a larger loan than they'd be able to get individually. A co-buyer can also help a primary borrower qualify for better loan terms if they have better credit than them.

Co-buyers have equal rights to the vehicle and their name is put on the car's title alongside the primary borrower. They're also equally responsible for making payments, and receive protection in the event that the primary borrower declares bankruptcy – or vice versa.

Auto Loan Cosigner’s Role

A cosigner, a more common term you may have heard before, isn't the same as a co-buyer. A cosigner’s primary role is to help a primary borrower get approved for auto financing by attaching themselves to the loan. In a sense, a primary borrower “borrows” a cosigner’s good credit.

A cosigner doesn’t have any legal rights to the vehicle, and their name isn't put on the car's title. They also aren't expected to make the monthly payments, but they are legally responsible for paying them if the primary borrower is unable to.

If a primary borrower defaults, the lender can come after the cosigner for missed payments. The loan is listed on the credit reports of both, and any positive or negative action regarding the loan affects both of their credit scores.

In addition, if a primary borrower doesn’t have income that can be garnished, they may be able to use a cosigner to meet the income requirements. The lender verifies the cosigner’s income, but they can’t combine incomes like they can with a co-buyer – each has to be able to individually qualify for the loan.

If a primary borrower files bankruptcy and surrenders the vehicle, they receive protection, but the cosigner doesn’t. The lender can still go after the cosigner for any loan balance owed not covered by the current value of the car.

Looking for a Dealer to Work With?

The bottom line is this: both a co-buyer and a cosigner can help you get approved for an auto loan, but it’s important that you know the difference between the two. You also need to understand the lender's requirements for a cosigner or a co-buyer, and make sure you find somebody who meets them if you intend to have one.

Regardless of whether or not you have a co-buyer or cosigner, Auto Credit Express wants to help you find financing. Our service connects car buyers to local dealerships that understand and know how to work through a variety of credit situations.

Getting started is easy, free, and doesn't put you under any obligation. Go ahead and fill out our simple and secure auto loan request form to start the process today.