Choosing the right cosigner for car financing is an important step, and you want to take care when deciding on who your cosigner will be and who you will cosign for. Mike Toler Chrysler Dodge Jeep® RAM FIAT is here to help, with a closer look at everything you need to know about cosigning. Learn about the financing process at our dealership.
What Does It Mean to Cosign a Car?
When you cosign for a car, you are agreeing to take on the full weight of the loan if the primary owner fails to pay on time. Essentially, cosigners act as second borrowers, which often allows people who wouldn’t qualify to take out a loan. Missed payments can affect the cosigner’s credit score, and the cosigner will be responsible for making those payments, so you always want to choose who you sign for carefully.
When Would I Need a Cosigner?
Typically, drivers will need a cosigner for their loan if they don’t qualify on their own. That may be due to no or low credit history, a poor credit score, or a high debt-to-income. Low income and limited employment history are other common reasons you may need a cosigner, which is why many students and new drivers sign with their parents.
Do I Need Good Credit to Be a Cosigner?
Cosigners act like a safety net, providing protection for the lender in case the original borrower cannot make payments. For that reason, cosigners typically need to have good credit and sufficient income. A low debt-to-income ratio is important, as well.
Begin the Vehicle Financing Process in Morehead City, NC
Vehicle financing doesn’t have to be overwhelming. At Mike Toler Chrysler Dodge Jeep RAM FIAT, we work one-on-one with your needs to find the right financing terms for your budget. Explore financing and cosigner options with help from our team.