How does joint car finance work?
It is sometimes hard to secure a new line of credit on one income alone, so you may want to consider a joint application for car finance.
This is usually a shared responsibility with a family member or partner, and may increase your chances of getting approved.
However, as you are both entering into a legal agreement, it is important to understand that you are both legally responsible for the contract.
When two persons apply for joint car financing, it is important that you both understand the conditions of joint borrowing and any implications.
Advantages of a car finance joint application
- Your chances of approval for car finance through a joint application may be increased if your joint partner has a better credit score than yourself.
- For instance, your partner, or joint applicant, may have a higher credit score but a lesser income, while you may have a lower credit score but a decent deposit and greater income.
- Both applicants' incomes are taken into account, which can help make your monthly payments more affordable.
Disadvantages of joint car finance
- Most lenders require both applicants to live at the same address and each person will need to provide personal information to support the application.
- Both applicants will be accountable for the debt. If either one of you are unable to keep up with repayments, then the remaining payments will fall on the other to fulfil.
- If you fall into financial difficulties and are unable to make payments, then both applicants' credit reports will be harmed.
- The car can only have one registered keeper; this is usually the principal user. This person will be the first to know about any parking or motoring offences.
- If your joint application for car finance is accepted, it’s likely to be for a hire-purchase agreement, which means the car legally belongs to the finance company until the debt is completely paid off.
Liability of joint application car finance
If you decide to enter into a joint car finance agreement, you both share the responsibility and need to be clear on your legal obligations.
This means that you are each agreeing to pay off the whole debt if either of you are unable to pay.
Not being married, being in a civil partnership, or not being in a relationship at all makes no difference in terms of legal duty no matter who drives the car.
Therefore, in the event that the other party defaults on payments, you may be left with the balance of the loan.
Any debt that is shared involves shared responsibility, so you should carefully assess your options before considering a joint car finance agreement.
Joint car finance with bad credit
One of the reasons you may be looking for joint car finance is because of bad credit.
It is possible to acquire a car finance through a joint application if you are in such a position.
You can carry out a soft search credit check here at Stoneacre to see if you are eligible first before committing and completing your application.
This process will not affect your credit score, whether you are eligible or not.
Usually the initial person can get a soft search approval and, if successful, can then look at obtaining approval for both candidates.
Submitting a joint application will connect your finances to the credit reference companies the lender is using, which may have an impact on your co-signer's and your own capacity to get new credit.
Representative Example
This represents an average of the deals that our customers receive on other vehicles
We are a credit broker and a lender. We can introduce you to a limited number of lenders and their finance products. We will provide details of products available, but no advice or recommendation will be made. You must decide whether the finance product is right for you. We do not charge you a fee for our services. Lenders will pay commission to us (either a fixed fee or a fixed percentage of the amount you borrow) for introducing you to them, this may be calculated in reference to a variable factor such as (but not limited to) the vehicle age, your credit score and the amount you are borrowing. Different lenders may pay different commissions for such introductions. Offers available to everyone over the age of 18, subject to credit approval.
