Does a co signer of an auto loan need to provide insurance?

Answer 1

No, but consider the following.

If the vehicle is uninsured and gets wrecked in an accident, the co-signer will still be responsible for paying the balance of the loan- a loan for a wrecked car. This is a serious risk when a car buyer needs a co-signer for the loan. The need of a co-signer signals that the primary borrower has not established a responsible credit record, or may not earn enough to afford the car loan. The lender considers that buyer too much of a risk and so requires a co-signer. Statistics show that a person with no established history of paying their bills, or a negative credit history, may be lax about maintaining car insurance as well. Co-signing is a risky business.

The co-signer should make certain the car payments are being made on time and that the vehicle is adequately insured.