Cosigners are required to sign the loan, which makes them legally responsible for it. This means they’re guaranteeing the loan is repaid. Not to be confused with a co-buyer who has rights to the car, a cosigner has no ownership rights to the vehicle even while sharing responsibility for paying the loan.
What happens when you co-sign a car?
If you choose to co-sign for a car loan, your name — along with the applicant — goes on the loan documents, and you become legally responsible to pay back the loan, even though you have no right to the car itself.
What does it mean to co sign a car loan?
Co-signing an auto loan does not mean you have any right to the vehicle, it just means that you have agreed to become obligated to repay the amount of the loan. So make sure you can afford to pay this debt if the borrower cannot. As co-signer,…
When is a co signer not the owner of a car?
If the primary accountholder fails to make payments on the loan or the retail installment sales contract (a type of auto financing dealers sell), the co-signer is responsible for those payments, or their credit will suffer. Even if the co-signer makes the payments, they’re still not the owner if their name isn’t on the title.
Who is responsible for an accident if you cosigned a car?
There are exceptions — such as if you knowingly let someone intoxicated use your car — but generally the responsibility belongs to the driver, not the owner. If you cosigned an auto loan, you shouldn’t be liable for damages if the primary borrower is involved in an accident and gets sued.
Who is liable for a cosigning car loan?
After the Crash. Cosigning doesn’t make you liable for the primary borrower’s bad driving, drunk driving or driving without insurance. You are liable for the loan payments, however, which can cause problems after an accident.
