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I don't have very good credit, but my spouse does. If I were to finance a car that is intended to be used primarily by me, can my spouse be the signer on the loan (and me as a cosigner)? Ie, use my spouse's credit instead of my own, even though the car is only used by me?

I'm sorry if this is a rather simple question, but I wanted to know if things like standard loan terms or insurance policies might come into play.

I know that making car loan payments on time will build my credit, but as bad as mine is, I'd rather save in the short term with lower payments on my spouse's credit score, and build my credit in other ways.

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If your spouse wishes to buy a car and finance it with a car loan, they are free to do so. Once they have bought a car, they are free to let you use it. However, if you are the owner of the car, the loan is going to have to be in your name. Your spouse can't get a loan backed by an asset they don't own. They could get a personal loan and then give the money to you, but the interest rates would likely be rather high. Also, even if you aren't on any of the paperwork, you being married likely will affect the situation. It will depend on what state you're in. If you want to go that route, one of the best ways to find out is to simply have your spouse ask the people that would be providing the loan "Can I finance this separate from my spouse, or will they be included in the credit evaluation?"

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  • If OP is in a community property state, then it'll be half his no matter whether or not his name is on the title.
    – RonJohn
    Nov 10, 2017 at 6:41
  • @RonJohn Yes, that was one of the factors that I was referring to when I said " It will depend on what state you're in."
    – Acccumulation
    Nov 10, 2017 at 18:47
  • I was clarifying it. :)
    – RonJohn
    Nov 10, 2017 at 19:10
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Go to your local bank or credit union before talking to a dealership. Ask them if putting both names on the loan makes a difference regarding rates and maximum loan you qualify for. Ask them to run the loan application both ways. Having both names on the loan helps build the credit of the spouse that has a lower score.

You may find that both incomes are needed for a car loan if the couple has a mortgage or other joint obligations. The lender will treat the entire mortgage payment or rent payment as a liability against the person applying for the loan, they won't split the housing payment in half if only one name will be on the car loan. Therefore sometimes the 2nd persons income is needed even if their credit is not as good. That additional income without a significant increase in liabilities can make a huge difference regarding the loan they can qualify for.

Once the car is in your possession, it doesn't matter who drives it. In general the insurance company will put both spouses as authorized drivers.

Note: it is almost always better to ask your bank or credit union about a car loan before going to the dealership. That gives you a solid data point regarding a loan, and removes a major complexity to the negotiations at the dealership.

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