Does Having a Cosigner Affect My Trade-In Process?

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Bethany Hickey is a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. She is a content writer for Auto Credit Express, CarsDirect, and many other automotive blogs, as well as the Poetry Editor for UM-Flint’s writing magazine.


, Contributing Writer - July 14, 2021

Many borrowers just starting out in the world of credit, and those with poor credit, enlist the help of a cosigner. And if you’re looking to trade in your vehicle for something else, you’ll be happy to know that having a cosigner doesn't affect or slow down the trade-in process.

Trading In a Car With a Cosigner on the Loan

Cosigners aren’t listed on your vehicle’s title at all. The only thing they’re tied to is the loan – not the car. A cosigner’s job is to assist you in getting approved for vehicle financing by promising to repay the loan if you become unable to and letting you “borrow” their good credit score to meet a lender’s requirements.

Since a cosigner isn’t the owner of your vehicle, you can sell or trade-in your car without consulting them. Your cosigner doesn’t have to be involved in the trade-in process or transaction at all. There’s no need to bring them to the dealership for the trade-in unless you just want the company!

The only reason you would involve a cosigner in the trade-in of your vehicle is if you intend to ask them to cosign for your next auto loan as well. If you trade-in your car and successfully pay off the loan they cosigned for, but can’t qualify for another auto loan by yourself, then you may need to ask for their help again.

Activity on the Loan Does Impact the Cosigner

While not necessary, it’s considered common courtesy to keep your cosigner in the loop on the status of the loan they cosigned for. The activity on the loan impacts them, too, and this includes timely, missed, or late payments.

If you trade in the vehicle and pay off the loan, it’s reflected on both their credit reports and yours. An active loan they’re responsible for could impact their ability to take on new credit, so it’s polite to let them know if they still have obligations to the car loan or not.

Do I Need a Cosigner if I Have Bad Credit?

It’s common for bad credit borrowers to be required to bring a cosigner to qualify for a car loan. However, there are some auto lenders that can work with less than ideal credit, called subprime lenders.

These lenders are signed up with special finance dealerships, and they’re no stranger to situations such as bankruptcy, first-time car buyers, no credit, and a history of poor credit. If you can prove you’ve got the chops to repay the loan by meeting a subprime lender’s requirements, and come prepared with a down payment, then you may not need a cosigner to qualify for a car loan.

Get Connected to a Dealership

If you’re on the hunt for an auto loan and think you need the assistance of subprime lenders, then let us do the hard work of locating them for you at CarsDirect. Fill out our free car loan request form, and we’ll look for a dealer in your local area that’s signed up with subprime lenders.

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, Contributing Writer

Bethany Hickey is a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. She is a content writer for Auto Credit Express, CarsDirect, and many other automotive blogs, as well as the Poetry Editor for UM-Flint’s writing magazine.


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