If you cosign on a car and the car is wrecked are you responsible for the loan?

Answer by  malone (4817)

Lenders require that financed vehicles are insured (collision AND liability) to make sure the investment is protected: repairs can be made and/or the loan covered if the vehicle is totaled. The cosigner is responsible if the signer defaults, period. The reason doesn't matter.

Answer by  GoodDad (32)

Your friend should have auto insurance. If the accident was not his fault, the other driver's insurance should take care of the repairs, otherwise his insurance is responsible for the repairs. If the car is totalled, and he owes more for the car than the blue book value, you are responsible for the difference.

Answer by  Huntress (1935)

When you cosigned for the car you essentially agreed that the loan payments would be made by you if your friend could not. Hopefully your friend or the other party involved is insured which will cover the cost of the car (if totalled). You are not liable for repairs or the accident unless you were driving the vehicle.

Answer by  jon6 (488)

If your friend defaults on his car loan, you are absolutely responsible for the loan balance. However, you are not responsible for the accident or andy insurance claims.

Answer by  Gixugif (16)

You are only responsible for the cost when you cosing if your friend is for some reason unable to pay it himself.