What rights does a cosigner have when a car is repossessed?

Cosigner Rights Upon Repossession

I am a co-signer for a large car loan for one of my adult children. I wanted to know what rights I had when it came to my daughter being late on payments. I found out from the finance co. that since I am a co-signer I have right to transfer the title of the vehicle to my name at anytime. I am looking out that my credit rating does not get affected from late payments. I hope this is helpful in someway. I know it doesn't have to do with re-possession, but some info for before it happens.

Here are more opinions and answers from other FAQ Farmers:

• Never cosign a loan unless you can be fully responsible for the loan just like it was your own. The principle party from a credit perspective will destroy your credit if they dont pay the loan and there is nothing you can do.

• I would get the car from your daughter and make the payments. Have her pay you that way your credit is covered it will also improve her credit. As a cosigner you are just as responsible for the loan as your daughter. If the bank repos and then auctions the car you are responsible for any balance due and the bank will come after you not just your daughter to recover their money.

Answer

Yes, cosigning a loan means that you are willing and able to ensure that loan payments are made in any situation in which your daughter fails to pay. Any repossession can and generally will be reported on your credit reports as well as hers. Additionally, since your financial situation is likely better than your daughter's, debt collectors would generally come after you more aggressively for repayment of any deficient loan balance.

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