Should I cosign a car loan for a friend?
My friend doesn't have a great credit score but is super trustworthy. We've been friends for almost 20 years. He wants to get a car loan, but he needs a cosigner. Should I cosign for him?
Cosigning a car loan with your friend is a kind gesture, for sure! But you should still be wary of all the responsibility that comes with it. Before you sign on the dotted line, consider these aspects:
- Are you willing to accept financial responsibility for someone else for years at a time?
- Do you want to check the car loan each month to make sure it’s paid for the next five to seven years?
- Do you have the cash to pay for this loan every month if your friend doesn’t?
- Can your friendship withstand the hit of this financial pressure, especially if your friend is unable to pay?
Only you can answer these questions, but if you can’t answer yes to all four, you may want to think long and hard about cosigning for the loan. At the end of the day, cosigning could cause you money and credit troubles that aren’t worth the risk.
As an alternative, though, you could offer to go through his credit report together or help him find other ways to build his credit.
You may also want to discuss car insurance if or when he decides to purchase the vehicle. Letting him know that he can save money through the Jerry app may be a significant help—we’ll get him customized quotes from top providers so that all he needs to do is pick the plan that works best for him. (And once he picks one, we’ll even help him switch!)
Best of luck to you and your friend!
Did this answer help you?
Ask us a question by email and we will respond within a few days.
Have a different question?
You can meet us at our office and discuss the details of your question.
Read advice from car experts at Jerry
Browse by topics
What others are asking
What happens if I stop paying my car loan?
My lender has been jerking me around lately, and I feel like they don't care about me as a customer. I don’t want anything to happen to my credit, but this is really frustrating, and I’m tired of giving them my money. What happens if I just decide to stop paying my car loan?
Nov 22, 2021
Should I do a 60-month or 72-month car loan?
I'm currently choosing between getting a 60-month car loan and a 72-month car loan. What are the pros and cons of each?
Nov 22, 2021
Should I pay off my car loan or credit card debt first?
I have a car loan with a $7,500 balance, and a credit card with a $7,500 balance. My dad recently gave me an early inheritance of $10,000. Which loan should I pay off first?
Nov 22, 2021