Do i need to use my original cosigner to refinance my auto loan?

by Tommy A.
(Hesperia, CA)

Question: I got approved to refinance my auto loan on my own, but the bank that is doing the refi is telling me that California state law requires that the other person(cosigner)that is on the original loan needs to be on the new refi loan, even though its already been approved with just my credit. Is this true?


Answer: Hi Tommy, I have never heard of this and quite frankly think it is some sort of mistake the bank is making. Either that, or they are not explaining it very well to you.

There should be no reason why the other person would "have" to be on the loan (unless your credit required it, but you said it didn't).

The only way this may apply (outside of a credit issue), is if you were refinancing and the vehicle was titled "and." If it is "and," then you should simply be able to have the other person (cosigner) sign off to take their name off title.

California seems to have a lot of quirky laws, but I don't see how this would be one. For instance, if a husband and wife were getting a divorce and one or the other wanted to refinance an auto loan they were both on into one persons name, how can the State of California say that they must refinance together?

I'd talk to the bank again and see if this was just explained to you wrong. If they say it is correct, then ask them what law and where you an reference it...I'd be very interested in reading this law.

Refinancing another person off a loan is very common and I must say I am baffled by what the bank rep has told you.

Hope this helps,
Justin