If i owe more than a car is worth can i still refinance with my dad as a co signer?

Question

If i owe more than a car is worth can i still refinance with my dad as a co signer?

Answer 1

As long as his credit is good enough to carry it, being upside down is not cause to reject someone's application.

Answer 2

depends on how far upside down you are.  Banks don't want to loan significantly over the value of a car.  

Also, keep in mind that refinancing will lower your rate in one of 2 ways.  Either a lower interest rate, extending the loan, or both.

Try not to extend the loan term.  If you owe 41 more payments, don't refinance this balance for 60.  That gives back all teh savings you had in rate, and then some.  Plus it keeps you upside down longer.

If lowering the rate drops the payment, without extending the term, then go for it.  

But again, it all depends on how far upside down you are.  100-120% of the value of the car is generally the max banks will advance.

Answer 3

Most people are upside down on their car when they refinance. In fact its unusual to see someone refinancing without being upside down just a bit. Do not let that deter you from refinancing.

Having your dad as a cosigner will help you get a better deal as well because he has more (if not better) credit than you. Just be sure to pay attention to the deal. Make sure its a simple interest loan with no pre-payment penalties.

Good luck!!