It can be hard to qualify for a loan without a strong credit score and a steady income. If you’re not getting approved on your own, you might have more success with the help of a cosigner.
Common reasons a cosigner is needed are.
- The primary buyer has credit issues that are too recent to qualify on their own.
- The primary buyer’s income is not adequate for the amount of financing requested.
- The primary buyer’s overall credit profile doesn’t meet the lender’s guidelines.
A cosigner is someone who has good credit and/or perhaps a long-term job with good income and is either a family member, spouse, or close personal friend. With a well-qualified cosigner, someone who would otherwise be turned down for an auto loan will often obtain a favorable approval. People often use a cosigner, even if they can get approved on their own, to qualify for better loan terms saving hundreds or even thousands of dollars in interest over the course of the loan.
It is important that the cosigner understands that they, too, are responsible for paying back the loan and that this loan will also show on their credit profile. This is why it is important to for the primary and the co-applicant to have a very honest and trusting relationship. If the primary purchaser stops making the payments, it will be the cosigner’s responsibility to fulfill the loan’s obligation or they will see the same negative credit impacts as the primary buyer.
Dick Says Yes has helped thousands of buyers with their cosigned loans and can help set both the primary buyer and the cosigner up for a successful agreement that can prove to be beneficial to both parties involved. Have more questions about buying a car with a cosigner? Please reach out to our team and we will assist you in a discrete and professional manner.
No matter what life throws your way, we can help!
It can be hard to qualify for a loan without a strong credit score and a steady income. If you’re not getting approved on your own, you might have more success with the help of a cosigner.
Common reasons a cosigner is needed are [1] the primary buyer has credit issues that are too recent to qualify on their own, [2] their income is not adequate for the amount of financing requested or [3] their overall credit profile doesn’t meet the lender’s guidelines.
A cosigner is someone who has good credit and/or perhaps a long-term job with good income and is either a family member, spouse or close personal friend. With a well-qualified cosigner, someone who would otherwise be turned down for an auto loan will often obtain a favorable approval. People often use a cosigner, even if they can get approved on their own, to qualify for better loan terms saving hundreds or even thousands of dollars in interest over the course of the loan.
It is important that the cosigner understands that they, too, are responsible for paying back the loan and that this loan will also show on their credit profile. This is why it is important to for the primary and the co-applicant to have a very honest and trusting relationship. If the primary purchaser stops making the payments it will be the responsibility of the cosigner to fulfill the obligation of the loan or they will see the same negative credit impacts as the primary buyer.
Dick Says Yes has helped thousands of buyers with their cosigned loans and can help set both the main buyer and the cosigner up for a successful agreement that can prove to be beneficial to both parties involved. Have more questions about buying a car with a cosigner? Please reach out to our team and we will assist you in a discrete and professional manner.
No matter what life throws your way, we can help!
What do you need to bring with you for approval?
To obtain a car loan approval at a dealership, you typically need to bring the following documents:
Valid Driver's License
Verify your license has not expired, revoked or suspended and ensure the address listed on your license is current and matches your residence.
Proof of Insurance
Take care to include the name of your agent and a reliable contact number. Adding a new car to your policy won't be necessary until approved.
Proof of Residency
A recent bill for utilities, such as water or electric, is sufficient proof so long as your name is listed and matches the address given.
Proof of Employment
A recent pay stub stating your year-to-date earnings is sufficient. Self-employed individuals must provide two years of prepared tax returns.
Personal References
A reference can include anyone that knows you personally, such as a family member or friend, Include full names, addresses and phone numbers.
Phone Number Verification
Any phone number provided must be currently in service and under the applicant's name. Prepaid cell phone numbers will not be accepted.
Yes, a co-signer can significantly help you get a car, especially if you have limited or no credit history, or if your credit score is not ideal. Here's how a co-signer can assist:
- Improved Loan Approval Chances: A co-signer with a good credit history can increase the likelihood of your loan application being approved. Lenders view co-signers as a safety net, as they are legally responsible for the loan if the primary borrower defaults.
- Better Interest Rates: With a co-signer who has a strong credit profile, you might qualify for lower interest rates on your car loan, which can save you money over the life of the loan.
- Establishing Credit: If you're a first-time borrower or looking to rebuild your credit, having a co-signer can help you secure a loan, allowing you to establish or improve your credit history with timely payments.
- Higher Loan Amount: With a co-signer, lenders might be willing to offer a larger loan amount, potentially allowing you to purchase a better vehicle than you could have on your own.
However, it's essential to understand the responsibilities associated with having a co-signer:
- The co-signer is equally responsible for the loan. If you miss payments, it can negatively impact both your and the co-signer's credit scores.
- The co-signer should be fully aware of their obligations and the potential risks before agreeing to co-sign.
It's crucial to maintain open communication with your co-signer and ensure that you can manage the loan payments to protect both your financial interests.
A co-signer is an individual who agrees to share the responsibility of a loan with the primary borrower, ensuring the loan's repayment if the primary borrower defaults. To be eligible as a co-signer, the person typically needs to have a strong credit score, a stable source of income, be of legal age (usually 18 or older), and possibly be a U.S. citizen or permanent resident.
Additionally, they should have a low debt-to-income ratio, indicating a good balance between their earnings and debts. It's crucial for the co-signer to understand the responsibilities and risks associated with co-signing a loan.
Common relationships for co-signers include:
- Parents or guardians
- Siblings
- Close friends
- Spouses or partners
- Other close relatives, such as aunts, uncles, or grandparents
It's essential for both the primary borrower and the co-signer to communicate openly about the loan terms and repayment plans. This mutual understanding ensures that both parties are comfortable with the arrangement and aware of their obligations.
The advantages of having a co-signer include qualifying for better loan terms, establishing credit, and potentially financing a car you might not otherwise afford. However, there are downsides. The co-signer shares the responsibility for the debt, meaning if you miss payments, it could harm their credit. They might also face late fees or collection costs, and in extreme cases, if the borrower files for bankruptcy or passes away, the co-signer could be required to pay back the loan.
Dick Says Yes: Your Partner in Auto Financing If you're unable to find a co-signer, don't worry. Dick Says Yes is a dealership specializing in auto loan financing for buyers with varying credit profiles, from bad to excellent. As part of the Dick Hannah family, the largest family-owned auto group in the area, we offer a vast selection of vehicles and are committed to helping you find the right one. Our Peace of Mind Pre-owned Promise and a 5-day Exchange Policy further ensure your satisfaction. If you have concerns about financing, our team is here to guide you to the best deal possible.
More Questions? Talk to a Financing Expert.
More Questions? Talk to
a Financing Expert.
5 Mistakes to Avoid When Financing a Car with Bad Credit
In this blog post, we outlined five critical mistakes to avoid: not checking your credit score, skipping the pre-approval process, not shopping around for the best loan, choosing the wrong car, and signing a contract you don’t understand. By taking the time to understand each aspect of the car financing process, you can make informed decisions that align with your financial goals. There are lenders and dealerships, like Dick Says Yes, that specialize in assisting individuals with less-than-perfect credit. If you need help, reach out to the Dick Hannah Team for more information.
I am a first-time buyer. Should I get a cosigner?
I am a first-time buyer. Should I get a cosigner? Here are some reasons why and why not. Either Way Dick Says Yes is here to help.
I have bad credit. Could getting a cosigner help me?
Credit Score is a big factor for approval on a car loan. Sometimes getting a Cosigner is the right call. Dick Says Yes – Vancouver & Gladstone
We pride ourselves on going the extra mile…
And We do more than help you buy used cars with a cosigner… a lot more.