auto

Can you switch co-signers on a car loan?

Tara Baukus MelloDear Driving for Dollars,
My daughter was engaged, and she co-signed for a car loan for the man she thought would soon be her husband. However, the relationship fell apart. Now he's not making the payments, and she can't afford to make the payments. Her credit is getting damaged. What if she can convince his parents, who really like her, to take over as co-signers on the car loan?
-- Tom

Dear Tom,
Most lenders won't replace a current co-signer with a new one on an existing car loan because it would require them to essentially go through the approval process for a new auto loan. While it never hurts to ask the lender about this possibility, your daughter might explore refinancing the car loan with the current lender or a new one and offering to pay the costs associated with the refinance. While that may cost her a bit, it is still likely to be a better option than having her credit damaged by the current auto loan.

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