How do I buy a car with a cosigner?

My credit is terrible, but I want a car and I can afford it. I just don't want to end up underwater due to the interest rate. My cousin said he'd cosign my car loan. He has much better credit than I do. How do I buy a car with a cosigner?

Answer
That’s very nice of your cousin! Applying for a loan with a cosigner is the same process as applying for a loan on your own. The only difference is your cousin’s credit score will be there to help you get approved for a loan with a better interest rate.
When applying for a loan, both you and your cousin will need:
  • Proof of identity
  • Credit scores
  • Proof of income
  • Proof of address
You both can shop for loans with credit unions, banks, or dealerships. It’s wise to get preapproval from multiple places to help you find the best deal.
With your cousin as a cosigner, he’s essentially saying he vouches for you and will put his credit on the line for you. If you can’t pay, your cousin will have to cover the rest of the loan for you. This will ultimately help you get a better deal on your loan.
Once you get the keys to your new car, remember you’re going to need insurance. Most lenders will require full coverage, which can get pricey, but it doesn’t have to break the bank. Try using the Jerry app to help you find better deals on car insurance. Jerry compares personalized quotes from top providers and delivers the best deals to your phone in minutes for free. The average Jerry driver saves $879 a year on car insurance!
Lauren Smith
Answered on Oct 29, 2021
Lauren has written for World Nomads, the Matador Network, Korvia Consulting, and once upon a time Three Fates Games. She graduated from Columbia College of Chicago with a BFA in Creative Writing. After graduating, she moved overseas and lived in South Korea where she spent her free time traveling and going on road trips with friends. She misses the rest stop potatoes and is trying to figure out how to recreate them at home. She's now based outside of Chicago and when she's not writing she spends her free time reading, playing video games, and exploring whenever she can.
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