Can I Use My Spouse’s Income for a Car Loan?
One of the biggest obstacles to getting a car is insufficient income or a challenging credit situation. However, people with a spouse have added support. For spouses of someone who makes more money and would be paying for the financing, it makes sense to try listing them on the application. Although you can’t usually apply for financing with someone else’s money, there are ways to use your spouse’s income for a car loan. Here’s everything you need to know.
Can You Use Spousal Income for a Car Loan?
You cannot use another person’s income, even a spouse’s, to get a car loan without specific arrangements. A dealer or lender will want proof that the loan can be paid back on time. If your spouse has the money for your next car and agrees to pay for it, there are three general ways of using spousal income to buy a car:
- Get a joint auto loan.
- Use your spouse as a co-signer.
- Have your spouse buy the car with an agreement about driving it.
The third option poses a few disadvantages since you won’t own the car, and the loan won’t be in your name. A joint auto loan will mean that you and your spouse own the car together, can both drive it, and will both be responsible for it.
Who supplies the payments is up to both of you. By comparison, co-signers are a last resort to get payments on the loan if you default, and you will still be the primary owner if a spouse co-signs. It’s common to get a joint loan or co-signer to buy a car in Akron when:
- You’ve just gotten married and want to buy a new automobile.
- You lack sufficient money and credit to get the car you need.
- Your credit report shows a past repossession, bankruptcy, or other issues.
- Jointly applying allows you to afford a better car.
If you live in Akron or nearby metropolitan areas and want to use your spouse’s income for a car loan, you’re not alone. It may help to get financing handled at the location that sold you the car. You can depend on the experienced financing department at North Coast Auto Mall of Akron.
What Are Joint Car Loans?
A joint car loan is shared by two or more borrowers, often called co-borrowers. Unlike co-signers, who do not have ownership rights to the vehicle, a principal borrower and a co-borrower usually get named on the vehicle title. Most accepted co-signers for car loans are parents and spouses.
When you apply for a vehicle loan with your spouse, you both agree to be responsible for the debt. Both of you will face credit repercussions and can be approached for collections if the loan isn’t being paid. Ensure that you and your spouse discuss a clear plan to take out a joint vehicle loan and have a contingency plan if someone can’t pay.
What Is a Car Loan Co-Signer?
Getting your spouse to co-sign is a common choice for married couples. One easy arrangement is to co-sign with your spouse and have them provide the money to make monthly payments. Your spouse won’t have rights to the vehicle, but the lender will look to your spouse if you can’t pay. Unlike applying jointly, you are still the primary buyer, owner, and payer. It’s essential to be on the same page about how you’ll pay, who is responsible for what portion of the loan, and how your spouse plans to cover any potential payment difficulties on your part.
The key takeaway with co-signing is that the person who takes out the loan will still be responsible for payments first. The co-signer is a last resort, so their credit history will weigh heavily in the application process. Co-signers can also be on a vehicle’s title, depending on what the lender requires, but it’s more common with co-borrowers with a joint loan.
Joint Auto Loans Versus Co-Signing With Your Spouse
With joint auto loans, each member’s current debt and credit histories will be factored into the financing application with equal importance. This works out nicely if you and your spouse combine your assets, credit, and income into a much stronger application. As long as the shared involvement is no problem for you or your spouse, a joint loan could help you get a better offer on a quality vehicle or unlock financing for more expensive vehicles. That said, if one of you is facing credit issues, it might be best to wait and resolve them as quickly as possible.
With your wife or husband co-signing a car loan, you will still be the primary borrower and receive the loan funds. You will be the one the lender expects payment from unless you default, and you will have the right to sell the vehicle when the loan is paid in full. Co-signing is a common choice for people who cannot qualify for a loan on their own due to poor credit, but it’s also potentially better if your spouse won’t be driving or using your car at all.
Can You Sell a Car if You Have a Joint Loan?
Questions like “Can I use my husband’s income for a car loan?” often lead to discovering joint loans. However, it’s important to note that because co-borrowers have equal rights to the vehicle, you cannot sell it without their permission, and vice versa. By contrast, co-signers can’t stop you from selling or trading your car.
When it comes to getting accepted for vehicle finance, there are several factors to consider. Aside from the length and term of your loan, you’ll want to be sure you’re getting into a car that meets your demands and is within your budget. North Coast Auto Mall of Akron can help folks all over Akron and nearby areas find a new car, truck, or SUV. We’re experienced with unusual or low credit situations, so feel free to apply for financing and discover how much you could get toward your next vehicle.