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What’s a Co-Buyer — And Do I Need One?
By Brooke Howell / 10/21/2021 / Your Money
When you’re on an important drive, sometimes you want someone riding shotgun. Sure, you’d be fine driving by yourself, but you might save money and have an easier time if someone is by your side.
Having a co-signer on a car loan1 or lease is a lot like that. Some people think the terms “co-signer” and “co-buyer” are synonymous, but there are important differences between these terms:
Co-signer: If the primary borrower does not fulfill their financial responsibility, then it’s up to the co-signer to make the payments.
Co-buyer: As an equal partner on the financial agreement, a co-buyer shares the benefits of ownership and the financial accountability.
GM Financial, like many finance companies, gives you the choice to add a co-applicant to your agreement. The co-applicant would act as a co-buyer. Here's how this could work in your favor:
- Interest rate. While rates vary, credit scores that are considered prime or near prime (680+ FICO) may qualify for lower interest rates. You may save money on interest if you can combine your credit score with that of a co-buyer who has a prime credit score.
- Financing amount. When you add a co-buyer with a good credit history, you may increase the amount available to you. This is because loan and lease amounts are based on the financial status of all applicants.
- Credit. If you are looking to build credit history (or get a fresh start), a co-buyer or co-signer with a strong credit history can help you get approved for credit.
Having a co-applicant on your contract can have its benefits. Keep in mind that one of the best financial decisions you can make is to always use credit responsibly. Learn more about understanding your credit record, and check out our tips for managing your credit rating.
1A retail installment contract that allows a customer to purchase a vehicle from an auto dealership. Contracts are then sold or assigned by the dealership to lenders like GM Financial. For simplicity’s sake, we’ll refer to retail installment contracts as “loans.”

By Brooke Howell, GM Financial
Brooke Howell is a storyteller who loves digging up ways to improve money management and help others make smart financial decisions. She has three American Staffordshire terriers, one curmudgeonly Chihuahua and doesn’t do anything by halves (except marathons).
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