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Your car’s radiator helps keep your engine cool and functioning. Overheating can damage an engine, which can eventually lead to engine failure. If you notice your radiator is failing, it’s critical to the health of your vehicle that you repair or replace it as soon as possible.

The average cost to replace a car radiator can range from $750 to $1,850, depending on car make and model. Radiator repair is often far cheaper, costing $250 to $750, on average.

Here’s a closer look at what a car radiator does, the factors that affect the cost of repairing or replacing a radiator, and how to pay for the fix.

Car Radiator Repair and Replacement Cost Breakdown

The cost of radiator repair or replacement will depend on the cost of parts and the cost of labor.

On average, auto mechanics in the U.S. charge $75 to $130 per hour, though rates will vary depending on where you live. A mechanic in a big city will likely charge more than one on the outskirts of town to help cover the increased cost of things like real estate, utilities, and labor.

An experienced mechanic should be able to replace a radiator in two to three hours. On the high end, you could expect labor to replace a radiator to cost nearly $400. It may take much less time to have a repair done, such as replacing a radiator hose.

The rest of the cost of repair or replacement comes from the cost of parts. Replacing an entire radiator is more expensive than replacing worn out parts.

The cost of parts is determined by the make and model of your car. For example, the price of parts for work on a relatively common vehicle, like a Toyota Corolla, will likely be much less than on high-performance luxury vehicles.

The type of part that’s required by your vehicle will also have an impact on price. Single core radiators are the most common radiators used in vehicles, but double- and triple-core radiators are more expensive if your vehicle calls for them.

Recommended: Luxury Cars With the Lowest and Highest Maintenance Costs

Getting an Estimate

When getting an estimate for a replacement or a repair, start by looking up average cost in the U.S. This will serve as a baseline that you can compare with estimates you receive.

Next, consider online resources, such as Kelley Blue Book’s Repair Pricing tool, that allow you to input the year, make, and model of your car and the repair you need. It will then tell you the price range you can expect in your area.

Finally, contact a handful of local mechanics, let them know the make and model of your vehicle, and ask them for a quote. Look for reputable mechanics by seeking recommendations from friends and family, and look up local shops with the Better Business Bureau to see if there are any complaints or shops you should avoid.

Recommended: Suspension Repair and Replacement Guide

What Does a Radiator Do?

When your engine is running, the temperature inside the cylinder can reach more than 260 degrees Fahrenheit. With temperatures so high, the engine must be cooled so that it doesn’t overheat.

This is where the radiator comes in. The engine in your car has what’s known as a cooling jacket. Radiator fluid circulates through the cooling jacket and is pumped to the radiator where it is cooled down before circulating again.

Recommended: The Costs of a Replacement Engine

Why Do Radiators Fail?

Radiators fail for a variety of reasons. For example, there could be corrosion or buildup that blocks the cooling system and eventually causes the radiator to malfunction. Drivers can work to avoid this by flushing their radiator system and coolant every year.

In addition, radiator seals can become brittle over time and crack, which can cause coolant to leak. Or, faulty temperature sensors can cause the radiator itself to overheat, which can potentially cause failure.

Signs of a Bad Radiator

Look out for the following signs that your radiator is in need of repair or replacement:

•  An overheating engine. This may be caused by low coolant or a blockage in the radiator system.

•  Coolant leaking on the ground. This may be a sign of a cracked or punctured component of the radiator system.

•  A sweet smell. A sickly sweet smell coming from the front of your car may be coming from leaking radiator fluid.

•  Dashboard warning. There may be a light on your dashboard that warns of low coolant.

•  Sludgy buildup. The coolant in your radiator should be bright in color. If it’s rust-colored or thick like a milkshake, it may be a sign that your radiator is failing.

Recommended: Guide to Transmission Replacements

Can I Drive With a Bad Radiator?

Your radiator is what cools your engine. If your engine overheats, other important parts of your engine, such as the cylinder, can get damaged and eventually there could be catastrophic engine failure. As a result, it’s not safe to drive your car with a failing radiator and you should have the problem taken care of immediately.

Recommended: Car Make and Model Explained

How to Cover the Costs of a Radiator Replacement

With car radiator replacement costing nearly $2,000 in some cases, it can take some strategizing to figure out how to cover costs. You may consider the following options:

Pay With Cash

Cash is the least expensive way to cover the cost of an auto repair. On average, radiators need to be replaced once every 80,000 miles. While there’s no guarantee that your radiator won’t fail before then, as the 80,000-mile marker approaches, you may want to set money aside in a savings account to cover future radiator repairs.

If you don’t have cash on hand, you may turn instead to credit.

Use a Credit Card

Credit cards can be used to finance the cost of a new radiator. However, if you carry a balance from month to month, you’ll owe interest, and interest rates can be very high — up to 20% or more. What’s more, if you continue to carry a balance, you’ll start to owe interest on your interest, which can send you deeper into debt.

As a result, it’s best to only rely on credit cards when you know you’ll be able to pay them off at the end of each billing cycle.

Take Out a Loan

If you know you won’t be able to pay your credit card bill off right away, a personal loan for car repairs may be a cheaper alternative, offering lower interest rates. Personal loans allow you to borrow a lump sum of money that can be used for most purposes, including auto repair. You agree to repay that loan in monthly installments with interest.

Refinance Your Auto Loan

You may also consider refinancing your auto loan. When you refinance your loan, you pay off your old loan with a new loan, preferably one with a lower interest rate, which can save you money over the life of the loan. You can use these savings to help fund auto repair.

A car loan refinancing calculator can help you determine how much you might save.

The Takeaway

If you think something may be wrong with your radiator, it’s best to get it handled as soon as possible. Signs of a faulty radiator include your car overheating, a sweet smell coming from the hood, leaking coolant, and the warning light on your dashboard turning on.

With the cost of radiator replacements being close to $2,000, this is not an expense to be taken lightly. If you can pay cash, that will be the best option. If not, you can consider using a credit card, taking out a personal loan, or refinancing your current car loan to a lower interest rate or opting for a cash-out refinance, where you get cash out of the loan and can use that money to pay for car repairs.

If you’re seeking auto loan refinancing, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your car in minutes.

FAQ

Can I continue driving my car with a damaged radiator?

Driving with a damaged radiator should be avoided as it can cause your car to overheat. Have it fixed as soon as possible to avoid further damage to your engine.

Are there different types of radiators for different car models?

Yes, there are different types of radiators for different car models. For example, single-core radiators are most common, but some cars will use double- or triple-core radiators.

Can a car radiator be repaired, or does it need to be replaced entirely?

In some cases, damaged parts of a car radiator, such as radiator hose, may be replaced without the need to replace the whole component.

How long does it take to replace a car radiator?

Replacing a car radiator may be completed by a skilled mechanic in two to three hours.

Photo credit: iStock/Evgenii Palitsyn

SoFi's marketplace is owned and operated by SoFi Lending Corp.
Advertising Disclosures: The preliminary options presented on this site are from lenders and providers that pay SoFi compensation for marketing their products and services. This affects whether a product or service is presented on this site. SoFi does not include all products and services in the market. All rates, terms, and conditions vary by provider. See SoFi Lending Corp. licensing information below.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOALR-Q325-096

You can remove a cosigner from your car loan. Whether you’re in a better financial situation or you simply want the cosigner off of the loan, it is possible to refinance your vehicle in your own name as long as you meet the qualifying criteria on your own.

Keep reading to learn more on what a cosigner is and how to remove a cosigner from your auto loan.

What Is a Cosigner?

A cosigner is someone who signs a loan with you and will be held responsible for paying it off if you stop making the payments.

When taking out a loan, lenders will look at your credit and financial history to determine the level of risk you present. If your credit score is low, it will likely seem to them that there’s a high risk that you might not be able to pay back the loan. In that case, potential lenders may turn you down for a car loan if you’re applying on your own.

However, a cosigner can help you qualify for the loan. They usually are someone who has better credit than you and who agrees to be responsible if you’re not able to make a payment. This lowers the risk to the lender that your loan won’t be paid off.

Recommended: Can a Cosigner Become the Primary Borrower?

Who Can Be a Cosigner?

Many times, younger adults in need of a car loan may ask their parents to be their cosigners. Someone married might ask his or her spouse. You could even ask a good friend to cosign your loan.

Whoever you choose for your cosigner, that person must have good credit and stable income. Bear in mind that your potential lender will likely run a credit check on both of you as it makes its decision.

Cosigners and Credit

When you’re considering getting a cosigner, it’s important to be aware of how cosigning your loan will impact that person’s credit.

When a cosigner cosigns a loan with you, the loan appears on that person’s credit report. If you aren’t able to pay the loan and your cosigner doesn’t, either, both of your credit scores may drop. Also, having your loan on record may impact your cosigner’s ability to get other financing.

However, if all goes well and you pay back your loan on time every month, your cosigner could potentially build their credit as a result. Paying a loan on time each month could positively impact both of your credit histories.

What’s the Difference Between a Cosigner and Co-Borrower?

Before trying to remove a cosigner for your auto loan, you need to make sure that the person was actually a cosigner on the loan and not a co-borrower, as there are distinct differences between the two.

Cosigners Are Responsible Only for the Loan

When you ask a friend or family member to cosign your loan, you are still the primary borrower. You’re going to use the funding and you’re going to pay back that loan. Your cosigner is more of an “in case of emergency” person. If you aren’t able to make a payment one month, the responsibility would fall on your cosigner to cover it.

Co-Borrowers Are Responsible for the Loan and the Car

A co-borrower, on the other hand, is just as responsible as you are for paying the loan back. As with a cosigner, you’ll both probably be expected to undergo a credit check when applying for the loan.

But the main difference here is that a co-borrower has just as much right to ownership of the vehicle you’ve financed as you do. The title will be in both your names and you both, in theory, can use the vehicle.

If you’re trying to figure out how to remove a cosigner from your car loan, you may want to start by finding out if you have a cosigner or a co-borrower. There may be different processes for removing a co-borrower.

Can You Remove a Cosigner from a Car Loan?

Yes, you can remove a cosigner from a car loan.

There are a few ways to go about doing this. Your course of action may depend on why you want to remove your cosigner and whether the cosigner is willing to work with you or not. If you’re divorcing your cosigner, for example, it may be challenging to get your spouse to sign paperwork if things are contentious. Depending on the situation, plan accordingly for the time the process is likely to take.

Recommended: Car Lease Acquisition Fee

How to Get a Cosigner Off a Car Loan

If you have a strained relationship with your cosigner, you may want to emphasize how being taken off your car loan will help that person. He or she won’t be tied to you financially and may find it easier to take out new financing. Plus, your ex-cosigner won’t be responsible for your car payment any more.

Here are a few different methods for getting your cosigner off your car loan.

Refinance the Car Loan to Get the Cosigner Off

If you initially took on a cosigner because you didn’t qualify for a good rate on your own, your situation may have changed. Perhaps now you could get a car loan on your own with no problem.

In this case, refinancing your car could be the easiest and most beneficial way to remove your cosigner. You may even end up paying less in interest on a refinancing loan than on your original loan.

Just be aware of the cost of refinancing a car. Your current lender may charge you an early termination fee, and your old and new lenders might charge transaction fees. If you owe more than the car is worth, it may be challenging to find a lender at all.

If you’ve already refinanced your car, you may be wondering how many times you can refinance your car. There’s technically no limit, but it’s a good idea to be smart about it. Each time you refinance, there should be a financial benefit for you.

See If You Have a Cosigner Release Option

Another option is to talk to your lender and ask whether you can remove a cosigner from your car loan, as some lenders offer a cosigner car loan removal option.

This option agrees to release the cosigner if certain criteria have been met. For instance, a cosigner might be released after a certain number of payments have been made on time or a portion of the debt has been paid off. If this is an option, your cosigner may have to sign a form to exercise it.

Pay It Off

Not everyone can afford to do this, but if it’s possible, you could also pay off the loan. This will release your cosigner from responsibility on the loan, plus you’ll have the added benefit of being done with your monthly car loan payments.

Recommended: Guide to Voluntary Repossession of a Car

The Takeaway

When you’re ready to remove a cosigner from your car loan, go about it strategically. Talk to your cosigner about the removal and decide which option seems like the most practical choice. You may be able to choose between such paths as executing a cosigner release, paying off the loan, or refinancing.

If you’re seeking auto loan refinancing, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your car in minutes.

FAQ

What is the role of a cosigner?

If you don’t have good credit, having a cosigner on your auto loan may help you qualify for loans you wouldn’t otherwise qualify for. Your cosigner is responsible for paying the loan if you cannot.

Can you refinance a car to remove the cosigner?

Yes. By refinancing to a loan taken out under just your name, you remove the cosigner from the previous loan.

Can a cosigner be removed from a car loan?

Yes. A cosigner can be removed from a car loan by refinancing, paying off the loan, or taking advantage of a cosigner release option.

What is a cosigner release option?

Some auto lenders have options in their loans that will release a cosigner if certain conditions are met. Those might include a certain number of payments being made on time, for example.

Photo credit: iStock/anyaberkut

SoFi's marketplace is owned and operated by SoFi Lending Corp.
Advertising Disclosures: The preliminary options presented on this site are from lenders and providers that pay SoFi compensation for marketing their products and services. This affects whether a product or service is presented on this site. SoFi does not include all products and services in the market. All rates, terms, and conditions vary by provider. See SoFi Lending Corp. licensing information below.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOALR-Q325-095

If you’re buying or selling a motorcycle, the first step you’ll need to take is to determine its value. If you’re the seller, you’ll need to know how much you can charge. If you’re the buyer, you’ll need to know whether or not you’re getting a fair deal.

There are also other reasons why you may need to know the value of a motorcycle, such as when you’re putting through an insurance claim or refinancing.

Read on to learn how to determine what a bike is worth, including the various factors that can have an impact on value.

Why Is Knowing the Value of a Motorcycle Value Important?

Anyone who is looking to either buy or sell a motorcycle can benefit from knowing a motorcycle’s “blue book value,” which is often sourced from Kelley Blue Book, or KBB, data (more on that below). However, there are other scenarios where knowing the value of a bike can be important.

One is if you’re thinking about refinancing your motorcycle loan. Similar to refinancing a car loan, refinancing a motorcycle loan involves taking out a new loan — ideally one with better terms and/or a lower interest rate — and using it to pay off your old loan. Your loan will be secured by the motorcycle itself, so your lender will need to know its value before offering a loan.

Knowing the value of your bike can also be important for insurance purposes. If your motorcycle is damaged in an accident or gets stolen, knowing what its market value was before the incident can help you negotiate with your insurance company, especially if you believe the payout they are offering is low.

If your bike is totaled, for example, you can compare what your insurance company claims the market value for your motorcycle is to its blue book value. If the valuation you find is more than what your insurance company is offering you, you can bring this to their attention.

How the Value of Your Motorcycle is Determined

There are a number of factors that affect the value of a motorcycle. These include:

•  Make and model: Some motorcycle makes and models are more valuable than others due to their reputation for quality, safety, and aesthetics.

•  Age: Just like cars, the value of motorcycles depreciates over time. In the first year of ownership, a motorcycle can lose up to 20%-30% of its value. The depreciation rate slows down after that, but the bike will continue to lose its value as the years go on.

•  Condition: A motorcycle that’s in good working order will generally fetch a higher price than one that needs work. For this reason, it can be a good idea to carry out all regular maintenance on the bike to help preserve its value. If you’re thinking about putting your bike up for sale, you may want to consider replacing components, such as worn out brake pads, that are in need of repair.

•  Mileage: The more a motorcycle has been driven, generally the lower its value. However, mileage isn’t as big a factor as it is with cars. Road conditions and an owner’s riding style generally have a larger effect on a bike’s value than the number of miles clocked on the odometer.

•  Extras: Bells and whistles, like cruise control or an engine guard, can raise the value of a motorcycle.

Recommended: What Is the Average Credit Score to Buy a Car?

How to Find Motorcycle Value

There are several ways you can appraise your motorcycle. One is to hire an independent appraiser who will examine your bike and assess its value based on the criteria above, as well as the local market.

Another option is to take your bike to a motorcycle dealership. They’ll often appraise it based on trade-in value — or, in other words, how much they’re willing to buy it for. This type of appraisal is likely to be free, but keep in mind that the trade-in value of a motorcycle is generally lower than its fair market value. The reason is that the dealer needs to leave some room for profit when they re-sell the motorcycle to a customer (at market value).

Finally, you can also do a self-appraisal. This is free and simply involves looking up the bike’s book value online. Just keep in mind that different sites use different methodologies, which can result in somewhat different book values.

Recommended: Ways to Increase the Value of Your Car

Motorcycle Blue Book Value

A motorcycle’s blue book value is sometimes a generic term for its market value. The term originated from the Kelley Blue Book (KBB), which is one of the most well-known pricing guides not only for cars but also for used motorcycles.

A motorcycle’s blue book value may simply refer to how much it is worth in the private market, and there are two main sites where you can find this out. Here’s a look at how each one works.

Kelley Blue Book

As you might guess, since the term blue book value originated with Kelley Blue Book, that resource can be a great place to start. To get the blue book value of a motorcycle using Kelley Blue Book’s site, you simply need to provide the bike’s make, model, and year. You are then asked to select either “Trade-In Value” or “Typical Listing Price.”

The former is the amount you might expect to get when trading in a used motorcycle in good condition with all of its original standard equipment. The latter is what a dealer would likely ask you to pay if you were looking to buy a used motorcycle in good or better condition.

Additional equipment for a motorcycle, such as an engine guard, may also be included as a separate value.

KBB also gives you the option of checking a used motorcycle’s accident history by entering its vehicle identification number (VIN) into a box.

To come up with its values, KBB uses data from auctions, dealer sales reports, and dealer surveys, as well as motorcycle listings and sales transactions nationwide. They also take into account current market and economic conditions.

Recommended: What Are the Steps to Financing a Motorcyle?

NADA

The other major motorcycle pricing resource is the National Automobile Dealers Association, or NADA. Similar to the KBB site, you’ll need to choose a year, model, and make. You’ll also be asked for your ZIP code and any special options.

The site offers four prices on motorcycles:

•  The manufacturer’s suggested retail price (which includes only standard equipment)

•  The suggested list price (the manufacturer’s highest suggested list price when the motorcycle was new)

•  The low retail price (for a vehicle that may show extensive wear and tear)

•  The average retail price (for a vehicle that is clean and without obvious defects and average mileage)

NADA uses data from more than 1.5 million vehicle transactions a month to help determine values, including wholesale, retail, and auction sales. It also considers asking prices posted on classified listing sites and Autotrader.

Motorcycle Value and Refinancing

You may decide that you want to refinance your motorcycle loan if the original financing was at a high interest rate, you’ve built your credit score, or you’re looking to make your monthly payments more manageable.

The way motorcycle loans work is that a better credit score can translate into a lower interest rate. Another benefit of refinancing is that you may be able to lower your monthly payments by extending your loan term. It’s important to note, however, that a longer loan term may mean you pay more in interest overall.

Lenders will look at the value of your motorcycle before they offer you a loan to refinance. They’ll want to be sure that, should you default on the loan, they’ll be able to recoup their losses by seizing and selling your vehicle.

If your motorcycle is worth less than the value of your previous loan, a situation commonly known as being “underwater” or “upside down” on your loan, you may have trouble finding a lender willing to offer you a refinance.

Recommended: Using an Auto Loan Refinance Calculator

The Takeaway

You can find the fair market value of a bike on your own by looking up the year, make, and model online at Kelley Blue Book or NADA. Or, you can turn to a professional appraiser or dealer. Understanding the value of a motorcycle is important if you plan to buy or sell a bike, make an insurance claim, or refinance your motorcycle loan.

If you’re seeking auto loan refinancing, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your car in minutes.

FAQ

How can you find the value of your motorcycle?

You can find the market value of your motorcycle through online resources such as Kelley Blue Book and NADA. Other options include hiring a professional appraiser and having it valued by a dealer for a possible trade-in.

Do you need to know the value of your motorcycle?

It’s useful to know the value of your motorcycle even if you don’t plan on selling it anytime soon. It may come in handy, for example, if you ever have to put through an insurance claim or should you decide you want to refinance your motorcycle loan.

Who determines the value of your motorcycle?

The value of a motorcycle is ultimately determined by what someone is willing to pay for it on the open market. Factors that impact a bike’s value include the popularity of its make and model, along with its age and condition.

Photo credit: iStock/bymuratdeniz

SoFi's marketplace is owned and operated by SoFi Lending Corp.
Advertising Disclosures: The preliminary options presented on this site are from lenders and providers that pay SoFi compensation for marketing their products and services. This affects whether a product or service is presented on this site. SoFi does not include all products and services in the market. All rates, terms, and conditions vary by provider. See SoFi Lending Corp. licensing information below.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOALR-Q325-094

A car loan charge off is something that may happen if you default and fail to repay your car loan. A lender may charge off auto loan debts that become 120 days past due. Lenders may also charge off car loan debts deemed uncollectible.

Auto loan charge off practices may damage your credit score. Below we highlight how a lender may charge off on car loan debts.

How Does a Car Loan Charge-Off Work?

A car loan charge may occur if you default and fail to repay your car loan. What is a charge-off on a car loan? It’s an accounting practice. If you’re 120 days past due or are experiencing serious delinquency, your lender may assume a loss and report your loan status to the credit bureaus as charged off.

A lender may charge off auto loan debt if you fail to make required car loan payments. This can cause your credit score to plunge. A charge off may not involve debt forgiveness, so you may be responsible for paying any outstanding principal, interest, and fees you owe on the charged-off account.

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Charge-Off vs Repossession

A charge off on car loan debt is an accounting practice used by lenders to record certain loan losses. Repossession, meanwhile, is when a lender seizes a vehicle from a borrower who had defaulted on a secured auto loan.

Lenders may charge off car loan debt if a borrower is 120 days past due on making a required car loan payment. As mentioned above, this can cause your credit score to plunge.

A charge off represents a loss to the lender, and repossession is a way that a lender may recover credit losses associated with a loan default. Borrowers who default on a secured auto loan may have their loan account charged off and their vehicle repossessed.

You may still owe money if the resale value of your repossessed vehicle is insufficient to cover the outstanding balance of principal, interest, and fees. Here are other factors to keep in mind if you’re having difficulty paying off your car loan:

•  Your credit score may plunge if you lose your vehicle to car repossession

•  Voluntary repossession can also damage your credit

•  It’s possible to reinstate your car loan after repossession

•  Refinancing after repossession may be an option for some borrowers

How Does a Car Loan Charge-Off Impact My Credit Score?

A car loan charge off may cause your credit score to plunge. What is a charge-off on a car loan? It’s an accounting practice used by lenders to record certain loan losses. Your lender may charge off your car loan if you’re 120 days past due on making a required loan payment.

Having your car loan charged off can leave a derogatory mark on your credit report for seven years.

Borrowers with bad credit may have the following options:

•  You may finance a vehicle purchase with a bad credit score, but the lender may charge a high rate of interest

•  Borrowers with bad credit may qualify for subprime auto loans

•  You may refinance a car loan with bad credit

Recommended: Can a Cosigner Become the Primary Borrower?

When Does a Lender Issue a Car Loan Charge-Off?

A lender may issue a car loan charge off in the following situations:

•  A borrower becomes 120 days past due on making a required car loan payment

•  A lender determines that a borrower’s outstanding car loan debt is uncollectible

•  A lender learns that a borrower’s outstanding car loan debt has been discharged in bankruptcy

Getting a car loan after bankruptcy can be difficult at best. A bankruptcy is a derogatory credit event that can appear on your credit report for up to 10 years.

What Happens If Your Car Loan Is Charged-Off?

Here is what may happen if your car loan is charged off:

•  A lender may record your charged-off car loan as a credit loss for accounting purposes

•  A lender may sell your unpaid debt to a debt collector

•  You may still owe outstanding principal, interest, and fees if the lender charges off your car loan without forgiving your debt

•  A lender may report your charged-off car loan status to the credit bureaus, which can damage your credit score

•  You may lose your vehicle to repossession

•  Your lender may sue you for a deficiency judgment if the resale value of your repossessed vehicle is insufficient to cover the balance of what you owe

Recommended: Guide to Gap Waivers

Avoiding a Car Loan Charge-Off

You may avoid a car loan charge off by making required car loan payments when due. Paying off a car loan gives you full ownership of the car and may serve as evidence of your creditworthiness.

Recommended: Financing a 10-Year-Old Car: What Are My Options?

The Takeaway

A car loan charge-off occurs when your lender takes an accounting loss as a direct result of you defaulting on your car loan. An auto loan charge off can damage your credit score and may lead to other negative consequences. Buying a cheaper car or refinancing for a lower monthly payment may help you avoid a car loan charge-off.

If you’re seeking auto loan refinancing, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your car in minutes.

FAQ

What happens when a car loan is charged off?

A lender may record your charged-off car loan as a credit loss for accounting purposes and may pursue recovery options. A lender, for example, may repossess your vehicle or sell your charged-off car loan account to a debt collector.

Is a charge-off better than a repossession?

A car loan charge off is not necessarily better than a repossession. A car loan charge-off in many cases may lead to repossession, and both events may cause your credit score to plunge. There are different types of car loans. Borrowers of unsecured car loans do not face the risk of repossession, whereas car repossession may cover the full amount of what you owe if you’ve defaulted on a secured car loan.

Is it possible to avoid a charge-off?

Yes, it’s possible to avoid a charge-off by making required loan payments when due. It may also be possible to avoid a charge-off by making payments within a grace period. You may avoid a charge-off by avoiding serious delinquency on a consumer loan.

Photo credit: iStock/FG Trade Latin

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Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SOALR-Q325-092

Americans love their cars, trucks, and SUVs. Some love them so much they’ll own two vehicles at the same time — and often make payments on two auto loans as a result.

Having two auto loans can really add up, though. The average monthly payment for a new car in 2025 came in at $745, while a used car payment averaged $521, says Experian. Multiple auto loans can mean a significant household outlay. However, there may be reasons you need two vehicles (and, therefore, two auto loans).

Keep reading for more on why you may need two cars, how to get approved for a second auto loan, other types of loans to consider, and more.

Can You Have Two Car Loans at Once?

You may ask, “Can I have two car loans at once?” The short answer to this question is yes, you can. There are, however, many factors and caveats to consider. Perhaps a better question is whether you should hold two auto loans at the same time. That answer depends on your unique financial and household situation.

In certain circumstances, having multiple car loans may make good financial and lifestyle sense. These circumstances can include any of the following:

You Have Two or More Breadwinners in the Home

If both spouses or life partners have jobs that require a commute and that commute can’t be shared in a single vehicle, owning two cars may well be a necessity, not a luxury.

You Sell or Trade Vehicles for a Living

There’s no shortage of collectors in the auto trade business who, for valid business reasons, may need to carry two or more auto loans simultaneously. While some individual auto sellers are committed to cash-only deals, some may prefer loan financing with a trusted lender.

You Own More Than One Home

While this certainly qualifies as a problem many people would like to have, owning two homes may necessitate the ownership of two cars and two car loans at the same time. This is especially true for homeowners with residences in two states. In that situation, it may make sense, at least for convenience’s sake, to hold two auto loans.

You Have a Small Business That Requires Two or More Vehicles

Many small business owners — think painters, contractors, florists, bakers, and other “on the move” trades — may need two or more vehicles. Consider a landscaping company owner whose business is growing and needs more trucks to get workers to an expanding list of client sites. Financing multiple trucks and trailers is well worth it if a business is generating more profit thanks to those purchases.

Your Teenager Needs a Set of Wheels to Get Around

Many parents know the reality of having to buy an extra car to get a college-bound son or daughter to campus (and give them a way to get around once they’re there).

Recommended: Smarter Ways to Get a Car Loan

Getting Approved for a Second Auto Loan While You Already Have a Car Loan

While it can be perfectly reasonable to hold multiple car loans, getting the second one may prove harder than getting the first. That’s primarily due to lender risk. Auto lenders may be more reluctant to extend a second auto loan to an individual. That said, getting approved isn’t insurmountable.

Know the Qualifications for a Second Loan Approval

Auto lenders and banks will typically give extra scrutiny to current auto loan borrowers seeking a second car loan. The hurdles to a second loan may include the following:

•   Your credit history. Personal credit remains the primary barometer for auto lenders deciding whether or not to approve a second car loan. You’ll need to show you’re making on-time payments, you’re not overusing credit (i.e., keeping your debt-to-income ratio low), and you have a robust FICO® Score. Any score over 660 can put you in prime position for a second auto loan.

•   Your annual income. Since you already have an active auto loan that hasn’t been repaid, lenders will focus particularly on your income. Specifically, the lender usually wants to see if your income can easily cover a second auto loan. Since auto purchases also lead to additional expenses, like maintenance, repair, gasoline, insurance, and state registration fees, your annual income should be able to handle not only the car loan, but the expenses that go with auto ownership.

•   Debt-to-income ratio (DTI). Overall household debt compared with income is a big deal to auto lenders reviewing a second auto loan application. Ideally, your DTI ratio would be about 35%. More debt could lead to an auto loan rejection.

•   The second vehicle’s value. Auto lenders will also study your second car’s estimated value. In general, the less expensive the vehicle is, the better your chances of getting a second auto loan approved. The less cash you borrow, the better your odds of repaying the loan.

•   Your down payment. Additionally, it’s helpful to bring a hefty down payment on a car. Anything more than 20% of the vehicle’s estimated value is likely to help your cause with a lender.

Consider Getting a Cosigner

If getting a second car loan stretches your income (or if a lender thinks it could), it may help to get a cosigner. A car loan cosigner should be someone you trust and who has a strong credit history and good income.

Just as when you’re getting a cosigner for a refinance, this person must also be willing to share the responsibility of the loan with you. If they cosign, that means that if you can’t make a payment, they will be responsible. A cosigner can improve your chances of getting a loan because they may reduce risks for the lender.

Taking on a Personal Loan vs Traditional Auto Loan

Since the stakes are higher with a second auto loan, overextended borrowers may need to expand their vehicle financing options.

One way to do that is to weigh a traditional auto loan against a personal loan. Sometimes it can be easier to grab online personal loans, but there are risk factors involved with both personal loans and regular auto loans.

Here’s a closer look at some of the factors involved:

•  Interest rates. Personal loan interest rates are typically higher than traditional car loan rates.

•  Loan terms. Loan repayment timelines are about the same with both personal loans and traditional auto loans. Personal loans usually need to be paid back within two to seven years while a regular car loan repayment period stands at between three to seven years. Lenders of exotic car financing, however, may offer 144-month auto loans.

•  Down payments. Down payments are not required for a personal loan, but they may be required with traditional car loans.

•  Loan fees. Personal loan origination fees can be as high as 10% in some instances, whereas loan fees for regular car loans usually range between 1% and 2% of the loan amount. The finance charges on a car loan may consist of interest and fees.

•  Collateral. Personal loans for autos typically require no collateral. That’s not the case with traditional auto loans, where the vehicle itself is usually the collateral. There are multiple types of car loans, including secured auto loans and unsecured auto loans.

So, which is right for you as a second car loan: An auto loan or a personal loan? The answer depends. If you can get an auto loan and you can afford a down payment, you will likely pay less in interest and fees. However, if you are having trouble finding an auto loan or don’t have a down payment at the ready, an unsecured personal loan could be what it takes to let you get that second car.

Recommended: What Is the Most Common Auto Loan Scam?

The Takeaway

Balancing two auto loans simultaneously could be challenging, but it may be doable if you have a decent income and a history of on-time payments. Just be sure you really need to have two quality vehicles at the same time.

If you’re seeking auto loan refinancing, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your car in minutes.

FAQ

Can you get one loan if you’re buying two cars at the same time?

Yes, you can get one loan to buy two cars simultaneously, but it depends on the lender’s policies. Some may allow it if you have a strong credit score and can manage the higher loan amount. Others might require separate loans for each car.

How do you get a second car loan if you already have one?

To get a second car loan, ensure your credit score is strong and your debt-to-income ratio is manageable. Shop around for lenders, provide proof of income, and consider a larger down payment. Be prepared for a thorough credit check and potential higher interest rates.

How many car loans can one person have?

There is no set limit to the number of car loans one person can have, but lenders typically consider your debt-to-income ratio and credit score. Having multiple car loans can affect your credit and may make it harder to qualify for additional loans.

Photo credit: iStock/Jinda Noipho

SoFi's marketplace is owned and operated by SoFi Lending Corp.
Advertising Disclosures: The preliminary options presented on this site are from lenders and providers that pay SoFi compensation for marketing their products and services. This affects whether a product or service is presented on this site. SoFi does not include all products and services in the market. All rates, terms, and conditions vary by provider. See SoFi Lending Corp. licensing information below.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOALR-Q325-091