The Benefits of Joint Car Finance

Joint car finance has become an increasingly popular option for many buyers, particularly couples or family members looking to purchase a vehicle together. This financing method allows two or more individuals to share the financial responsibility of owning a car, which can bring a great many benefits.

What is joint car finance?

Joint car finance is when two or more people apply together for a vehicle loan or lease. It will typically involve couples or family members who live together. The arrangement allows the borrowers to combine their incomes and credit histories, which can make it easier to secure the best car finance deals.

What are the benefits of joint car finance?

There are numerous benefits of joint car finance.

Enhanced borrowing power

One of the main advantages of joint car finance is that it bring enhanced borrowing power for the applicants. By combining multiple incomes, the borrowers can increase the overall loan amount that they’re eligible for. It typically means you can consider more expensive or higher-quality vehicles than you might be able to afford if you applied for car finance individually.

Shared financial responsibility

Another benefit of joint car finance is that it allows the borrowers to share the financial responsibility of making the repayments. This can often mean budgeting is easier and means that the monthly repayments paid by each individual will typically be lower than if one person applied on their own. This shared responsibility can also ease stress and help spread the financial burden, which can be especially helpful if one applicant has an unforeseen change in their finances.

Access to wider range of vehicles

As mentioned, joint car finance means you have increased borrowing power. It means you might be able to purchase vehicles that would have previously been out of reach if applying for car finance alone. This can be particularly beneficial if you’re looking for a high-end model.

Improved credit opportunities

Joint finance can be beneficial for those with varying credit scores. For example, if one applicant has a stronger credit history, it can help improve the overall creditworthiness of the application. This can result in better financing terms, such as lower interest rates and more attractive repayment options.

However, it’s worth noting that by joining in car finance, there will also be a shared liability. Any missed payments will negatively impact both borrowers’ credit scores.

Improved flexibility

Joint car finance offers improved flexibility when it comes to ownership arrangements. For example, you can establish terms regarding who will use the vehicle and how the expenses will be shared. If someone will be using the car mainly for commuting, and the other applicant will be using it only on weekends, it might make sense for the first person to contribute a little more. This can lead to more equitable use of the car and make it easier to manage the associated costs of running a vehicle, such as insurance and maintenance.

What are the drawbacks of joint car finance?

As we mentioned, whilst shared responsibility can have positive impacts for your credit score and financial situation, it can also mean shared liability. If one applicant isn’t able to remake their payments, both borrowers will still be responsible. Similarly, missed payments can negatively affect both people’s credit scores.

Some people may be ware of joint car finance in case the situation changes and the borrowers are no longer together. In this instance, it’s best to contact your car finance lender as soon as possible, as they will be able to help guide you to the best solution. This may involve refinancing your car loan under the name of one individual or paying off the car finance early.

GetCarFinanceHere can help you to find the best car finance deals. Our expert team will look through all the options from our network of lenders to find the right car finance for your specific circumstances. Apply for car finance online today or contact us for more information.