A co-signer is needed because either the other person has no credit or bad credit and the financial institution will not accept the contract without another person co-signing. The co-signer's credit has to go through a credit check and be accepted by the financial institution. What most people don't realize that it's the co-signer that benefits from the on-time payments, not the other person. Even with a co-signer, it is the co-signer that gets the benefits of the other person paying, i.e., it does nothing to help the other person's credit. It all goes to the co-signer - either good, or bad. What it all boils down to is that the co-signer is ultimately responsible for the loan contract - NOT the person they are co-signing for. Until the financial institution accepts the loan documents, i.e., the credit of the co-signer, and signs off on the loan documents, it is not a valid contract.

I am NOT a lawyer, but I've been a legal assistant for over 26 years. I cannot and am not giving legal advice here - I am just saying what most everyone who has ever bought anything on time already knows. It is not a valid contract until signed by all parties involved. That includes the selling dealership (they accept the agreed upon price); the buyer (he has agreed to the price the dealer is willing to accept for the vehicle); and the financial institution (they pay the dealer the agreed upon price, and the buyer pays them back).

dave