My co-signer and I got a Volkswagen for her and myself, her being my co-signer now she just showed up with a new car and is surrendering her car will that effect me since she co-signed for me at the same time we got the cars out.
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1How many cars are involved here? There is "a Volkswagen", a "new car", and "her car". Are these 3 separate cars? Or are there two cars (maybe the Volkswagen is the new car for example)? What cars are involved in the phrase "we got the cars out"? Who owns each of these cars and who is on the loans for each of these cars? What exactly do you mean by "surrendering"? Do you mean that she is going through the process of having the old car voluntarily repossessed? Or do you mean something like she is turning in the old car at the end of a lease?– Justin CaveCommented Dec 23, 2023 at 5:22
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Do you have a lease or a purchase?– mkennedyCommented Dec 23, 2023 at 18:22
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1 Answer
If you really co-signed, both guaranteeing the loans on both cars, "surrendering" the car is counted as a failure to pay off the loan and will count against both your credit histories. See many past answers about co-signing.
To avoid that, don't surrender the car. Sell it, and use the proceeds to pay off the loan. You may or may not be able to get enough money from the car to completely pay it off; if not you'd have to also spend money to close out the loan properly.
To answer the headline question: if your co-signer takes out another loan without paying off this one, it puts them under more financial strain, which increases the risk of you having to support the co-signed loan. I have no idea how or if credit rating agencies calculate that.
