Can a Cosigner Take Possession of the Car?

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


, - October 2, 2018

If you have a cosigner on your auto loan, you don’t have to worry about them taking possession of your car. If you have a co-borrower, however, it’s a different story. Let’s look at the difference, and how you can make sure your vehicle stays in your hands.

Cosigners Can’t Take Your Car

Cosigners don’t have any rights to your vehicle, so they can’t take possession of your car – even if they’re making the payments. What a cosigner does is “lend” you their credit in order to help you get approved for an auto loan.

Typically, this happens when a lender is on the fence about approving you for auto loan, so they require you to provide a cosigner. A cosigner must have good credit and agree to make any payments in case you’re unable to. If you do fall behind on your car loan, your cosigner’s credit is negatively affected, just like yours.

In many cases, having a cosigner is a requirement for borrowers who are struggling with credit issues. With a cosigner on the loan, this gives the lender peace of mind that all the bases are covered. Just know that both you and your cosigner’s credit scores are affected by what happens with the loan.

Co-borrowers and Your Car

Co-borrowers differ from cosigners in that their income can be combined with your own to meet the lender’s income requirements. The credit scores and incomes of both are used to qualify for the auto loan, so both the borrower and co-borrower have equal rights to the vehicle. Because of this, a typical requirement of a co-borrower is that they must be a spouse.

Since a co-borrower is a spouse, there’s no restriction that limits them to bad credit situations. Usually, co-borrowers are needed for income purposes, even if both parties have decent credit. However, it’s possible to have your spouse as a co-borrower just so you both have ownership rights to the car.

Options for Keeping Your Car in Your Hands

The first thing you should do if you’re worried about falling behind on your loan, or that your cosigner might attempt to claim ownership over the vehicle, is call your lender. In some cases, lenders are willing to work with you if you’re having a temporary set back. Some may defer your loan payments for a month, allowing you the time to get back on track. If you’ve had your loan for more than two years, and have been in good standing up until this point, your lender may even consider refinancing your loan. In this case, especially if your credit has improved, you may even be able to do so without a cosigner.

Start Here for Your Car Buying Needs

If you have a cosigner, you don’t have to worry that they’ll be able to take your car. If you need a vehicle, but worry credit issues might mean you need a cosigner, start here. At CarsDirect we work with a nationwide network of dealerships that have the lending resources available to help people in all kinds of credit situations. Fill out our easy online auto loan request form to get the process started today!

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


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