Does a Co-Signer matter much when buying a car/getting a loan?

Question

Pretty straight forward question. (I'd be looking at Used cars too)

My credit is so bad, I should be in jail...well maybe not that bad...but it's bad.

Thing is. I have a co-signer with STELLAR credit...and he's pretty well off.

I want a nice little car though the interest would be unfathomable.

Would this excellent co-signer offset that interest rate considerably or not much at all?

Oh and I live in Oregon, US.


Thanks

Answer 1

Shot in the dark here, not knowing the regulations regarding your state but with my own experience w/having bad credit and good co-signers here's what I do know:
1)still gonna pay a higher interest rate, don't be surprised if the dealer tries to get you to go with your co-signer as the primary person instead of you...or even not having you on loan at all. That's what happened to me so my Mother in law is the technical "owner" of my car.
2) Your co-signer will most likely also be listed on the title of the car--I had to mail my title to my father when I paid my first car off because he co-signed my car loan for him to sign off his "interest" in the car.
3) If you have exceptionally bad credit like I have had don't be surprised if your co-signer gets harrassed for payments pretty quickly if you're late more than once. On the plus side, if you value your relationship with your co-signer then it's GREAT incentive to keep on top of those payments. (Like with my Mother in law & I, eeek don't want to go there if I'm late!)
Check out other options too, credit union loans sometimes are cheaper interest rates and can be deducted automatically from your account. Don't jump right in and give in to first offer from dealer, check out what interest rates you can get from different sources. Also, check out what your rates would be w/co-signer & without, if it's not too much difference then you might still consider getting it without co-signer. Have fun!

Answer 2

1

Answer 3

Well, the loan will probably be negotiated over your
co-signer's credit rating, not yours. If the loaning agency
uses credit rating to determine interest rate (most do not),
then it might help.

I assume you fully understand that if you default on the loan
that the co-signer is liable.

If the interest rate is outrageous, why not find another
loaning agency? Indeed, you could have your co-signer
just take out the loan himself with your name not mentioned
anywhere and then he could probably get it at any bank or
through the dealer.

Answer 4

You likely will be unable to secure a loan, especially during these economic times. I suggest establishing a line of credit somewhere, even if that means getting a secured credit card. You need to take good care of the car you have now because until you have a year of credit at least or cash up front, you likely will not be able to purchase a decent vehicle. If no one in your family will cosign for you, might one loan you their money instead? If so, you'll likely benefit as you would be more likely to have a low interest rate due to that person.

Answer 5

Yes, you probably wouldn't be able to get a loan unless you put down a large amount. This will help control the interest rate somewhat. It really depends on your FICO score? 580 or less and you can't get a loan without a cosigner. But be careful, a late payment will (unfortunately ) affect you as well as the cosigner.

Answer 6

i agree with what the last person said. it would be great if you could come up with a good down payment. my credit was bad and i had to have a co-signer. I put 2,500 down and I made my payments on time each month and it really did help to build my credit. i wish you luck.

Answer 7

You should be able to get a good rate with that type of cosigner. It may be a little more than the lowest rate possible, but this will also help you build up your credit rating, if you keep up the payments.. good luck..

Answer 8

Not necessarily. You'd be better off perhaps having this other person being the primary borrower and you co-signing.