What Is an Auto Loan Co-Buyer?

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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.


, - April 3, 2019

A co-buyer, or co-borrower, is someone who applies for an auto loan with the primary borrower. Both the primary borrower and the co-buyer hold the same rights and responsibilities to that car. When applying for an auto loan with a co-buyer, both parties must be present for the whole process.

Qualifying for an Auto Loan with a Co-Buyer

If you’re unable to qualify for an auto loan on your own, you can tip the scales in your favor with a co-buyer or a cosigner. Though these sound similar, co-buyers and cosigners are different, and each one plays a different role in terms of how they help you get approved and ownership of a vehicle.

Only a co-buyer can help if income is the reason you can’t qualify for financing on your own. This is because a co-buyer is buying the car with you, and is typically a spouse. When you use a co-buyer, your incomes can be combined to meet the income requirements of a lender. If you have less than stellar credit, a co-buyer with good credit can also be used to help you meet these requirements. You and the co-buyer share ownership of the vehicle, and both are responsible for payments – or anything else that happens regarding the car.

A cosigner, on the other hand, can only help with credit issues and must have good credit to qualify. The income of the cosigner can’t be added to yours to meet any lender qualifications. Cosigners also don’t have any rights to the primary borrower’s vehicle, even though they’re responsible for making payments if the primary borrower can’t.

Do I Need a Co-Buyer?

Not everyone needs to have a co-buyer just because they’re having trouble getting a traditional auto loan. In fact, sometimes just going to the right lender can help you qualify for the financing you need. However, in some cases, subprime lenders that help bad credit car buyers can require you to provide a cosigner or co-buyer to help you qualify for a loan.

Typically, you need a co-buyer if you can’t meet the income requirements of a lender – either because your income is too low, your monthly bills are too high, or you receive income that isn’t taxable and therefore doesn’t count toward a qualifying income. Examples of non-taxable income include Social Security, disability, retirement, and child support. You may also use a co-buyer if your credit score is too low to qualify on your own and you and your spouse want to own a vehicle together.

Find the Right Dealer With or Without a Co-Buyer

If you need to find auto financing, but your credit isn’t the best, let CarsDirect guide you toward a dealership that can help. We work with a nationwide network of special finance dealers that have the lending resources you need for a car loan even with bad credit, no credit, or bankruptcy.

Fill out our free auto loan request form and we’ll get started on the process of matching you to a local dealership right away. What have you got to lose?

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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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