Overhaulin'

Does having a cosigner affect my interest rates on a car loan if my credit is bad?

I'm a single mother just finishing up nursing school. My credit isn't great, but my dad (who has perfect credit) offered to co sign a car loan after my vehicle died last week. Will that get me better interest rates? The dealer we are looking at is offering 0% financing right now. I'm wondering if it's possible for me to get that deal.. Do they look at both credit scores or just mine???

Public Comments

1. I'm pretty sure they just look at you, if you're the main person. They only make you use a cosigner in case you don't make a payment, so your financing rate won't change at all.
2. When someone cosigns for a loan, they are accepting full financial responsibility for that loan. So if you were to decide to just stop making payments, they'll just make your father pay for everything. Hence they will pay attention to your dad's credit more than yours, since they are basically giving HIM the loan. If your father is willing definitely go ahead and do it! Although I would mention to your dad that you'd like to set something up so he has access to this loan, to make sure you're staying current. This would be for HIS protection. If this loan goes bad, even on no fault of your father's, it would ruin his credit as well as yours. He will likely appreciate this idea, and your show of concern for his interests.
3. Financed cars is more expensive to insurance cause it requires full coverage. You can compare how much you would pay for full coverage of this car using this tool - carinsurance.yoll.net
4. Piggybacking, or having authorized users, is no longer considered and that is when only you would be considered. But because you will have a co-signer, the car loaner will look at both you and your dad's credit history and scores.
5. Most of the comments above are accurate, however, in the eyes of the lender there is a distinct difference between a co-signer and a co-buyer. Auto finance companies do not co-mingle the income for the signer and the co-signer, whereas they do for co-buyers, which are most often spouses. So the answer is YES, they would use your father’s rock solid credit score to qualify for the lending program, but they would use your income when determining the maximum monthly payment and loan amount.
6. The main reason why it needs to have a cosigner just incase the main person who had the car loan can't pay the said loan the cosigner will be responsible to pay the debt. So mainly the company will be focusing your record first.