Can You Add a Cosigner to a Car Loan?

Yes, you can add a cosigner to a car loan you already have – you just need to refinance it! It may sound simple, but not everyone qualifies for auto loan refinancing. You and the cosigner have to meet the lender's requirements individually if you want to add them to the loan.

Car Loan Refinancing Basics

Can You Add a Cosigner to a Car Loan?In order to qualify for car refinancing, typically, around at least one year needs to have passed if you took out a bad credit auto loan. Lenders like to see that you’ve made regular payments during that time, and are serious about successfully completing your loan. Plus, waiting gives you a chance to raise your credit score, which is important since lenders want to see credit improvement.

When you refinance your car loan, the biggest benefit is a lower monthly payment. You can do this by either qualifying for a better interest rate or extending the loan term.

The best option is qualifying for a lower interest rate. Bad credit car buyers tend to get approved at a rate that’s around 15%, and interest charges rack up quickly over time. If you can refinance for a lower rate, you save yourself money in interest charges, all while lowering your monthly payment.

If you’re struggling to keep up with payments, you can refinance and extend the loan term. This isn’t ideal because it increases the total cost of the loan, but it can be a good temporary fix if you’re financially struggling. Once you’re in a better place, you can always pay off the loan faster by making larger payments each month.

Adding a Cosigner to an Auto Loan

Now that you know what it takes to refinance, if you’re considering adding a cosigner, what do they need to do to qualify? First and foremost, your cosigner must have good credit – usually at least in the low 700s – to be considered.

Secondly, the lender is going to calculate the cosigner’s debt to income ratio, meaning that, in addition to meeting the income requirements, they need to have enough available income to handle the loan payment.

If your cosigner meets all the requirements, they can sign the new loan alongside you. What makes adding a cosigner great is that they may be able to help you qualify for a better interest rate – saving you more money than you would have if you went it alone.

Keep in mind that just because your cosigner doesn’t have any legal rights to the vehicle doesn’t mean they’re off the hook. If you miss a payment or default, the lender can come after the cosigner to make sure the loan is paid. Plus, any action you take – positive or negative – impacts your cosigner’s credit score as well.

Need Help Finding a Dealer?

Adding a cosigner is a great way to save even more money on an auto loan, and if you’re in the middle of one, you can add a cosigner by refinancing after some time has passed.

While we can’t help you specifically with refinancing, we can help you get connected to a dealership that has the lending resources you’re looking for. At The Car Connection, we can match you to a dealer near you that knows how to assist people in all kinds of unique credit situations thanks to our nationwide network of partner dealerships.

Don't wait any longer if you need a vehicle. Get the process started today by filling out our fast, free, and no-obligation car loan request form!

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