When one offers to cosign an auto loan, it indicates that the co-signer has the personal creditworthiness to pay off the loan or take over the payments should the originator of the loan default. Since the co-signer is effectively the person the financial institution will be considering as the funding source for repayment of the loan, then yes the co-signer on an auto loan affects the interest rate. Because the bank, credit union or manufacturer's finance arm considers them the "real" owner of the vehicle, until the owner has established a positive track record of payments on his or her own. That period can take from a year to 24 months.
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