Car lease with a co-signer: what each person owes
A co-signer on a car lease promises to cover the lease if you don't pay, in full, including late fees, and the account can show up on their credit report.
What a co-signer takes on
Full exposure, limited control.
In full. If the main signer can't pay, the co-signer is on the hook.
The FTC says the co-signer may also owe late fees and collection costs.
Excess mileage, wear and damage, a disposition fee and early termination charges can be part of what's owed.
The lease can appear on their credit record, and late payments hurt both of you.
At Mercedes-Benz Financial Services, for example, a guarantor can't request a payoff quote.
The lender rarely just takes a name off. It usually means ending or replacing the lease.
From FTC guidance on co-signing. The Mercedes-Benz Financial Services example is from its FAQ, as of September 2026.
Key takeaways
Lenders set this up either as a co-lessee, who signs the lease as a second lessee, or as a guarantor, who guarantees your side of it; either way, the second person can be asked to pay what's owed. Getting a co-signer off a lease later is hard and usually means ending or replacing the lease.
What a co-signer owes on a car lease
The FTC is blunt about it: co-signers take on equal responsibility for the contract, and if the main signer can't pay, the co-signer is on the hook. Its guidance on co-signing adds that the co-signer may also owe late fees and collection costs, and that unless state law says otherwise, the creditor can come after the co-signer without first trying to collect from the borrower.
On a lease, "what's owed" goes beyond the monthly payments. It can also include:
excess mileage charges at turn-in;
charges for wear and damage beyond normal use;
a disposition fee, if the lease has one;
early termination charges, which the FTC warns can be substantial.
The lease can appear on the co-signer's credit record, and late payments hurt both of you. And because lenders look at your existing debts when you apply for credit, a co-signed lease can count against the co-signer's own borrowing while it runs.
Co-signer, co-lessee or guarantor
Lenders use different labels, and the label mostly decides what the second person can do on the account rather than how much they could owe. Mercedes-Benz Financial Services, for example, lists four roles on its accounts: primary account holder, co-buyer, co-lessee and guarantor. As of September 2026, its FAQ says a guarantor can't change Auto Pay, the billing or garaging address, or statement settings online, and can't request a payoff quote.
That's the uncomfortable part of co-signing: full exposure, limited control. If you're the co-signer, ask how you'll see statements and payment history, and agree with the person leasing on what happens if a payment is going to be late.
Removing a co-signer from a car lease
The lender approved the lease based on both people, so it rarely just takes a name off. The realistic routes are:
Buy out the lease and finance the purchase in the main driver's name alone, if they now qualify on their own. See buying out your lease.
Trade the car in or sell it, where the lender allows it, and start a new lease or loan without the co-signer. See getting out of a car lease early.
Transfer the lease to a new qualified lessee, if the lender allows transfers. Not every lender does: Mercedes-Benz Financial Services, for one, says it only accommodates transfers for the families of deceased customers and where Connecticut law requires them (as of September 2026). See transferring a car lease.
Wait for the lease to end, then return or replace the car.
Because the way out is narrow, settle it before anyone signs. Ask whether the lender will write a co-signer release into the agreement: the FTC says a lender might add one if asked, but a release needs both the lender and the main signer to agree, and lenders are unlikely to grant one later because it adds to their risk. Then pick a term you can both live with.
Taking a co-signer off a lease
Four realistic routes. The lender rarely just removes a name.
Buy out the lease
Finance the purchase in the main driver's name alone.
Works ifthe main driver now qualifies on their own
Trade or sell the car
Then start a new lease or loan without the co-signer.
Works ifthe lender allows it
Transfer the lease
A new qualified lessee takes it over.
Works ifthe lender allows transfers. Not every lender does
Wait for the end
Let the lease end, then return or replace the car.
Before you signpick a term you can both live with
Settle it before anyone signs. Ask whether the lender will write a co-signer release into the agreement.
Alternatives to a co-signer
First-time and graduate programs. Some are built so you don't need one: Audi's college graduate program says no co-signer is required, and Toyota Financial Services says students and recent graduates who meet its criteria won't need a co-buyer (as of September 2026). See your first car lease.
A less expensive car whose payment fits the lender's income limits on your own.
More time. A few months of on-time payments and lower card balances can change the lender's answer; see getting a car lease with bad credit.
Buying a used car instead, if a lease only works with someone else on the hook.
In California
A required warning. California counts a lease of a car for personal use as a consumer credit contract for this purpose. A lender that gets the signature of someone who isn't receiving the car must give that person a Notice to Cosigner before they become liable. There's a version written for leases, and it has to be provided in English and several other languages. If you're asked to co-sign and haven't seen it, ask for it.
EV incentive fine print. For California's MyFirstEV incentive, eligibility turns on whether the person who will be on the registration or title has ever been on one for an EV before. If a co-signer with a past EV will be on the registration, check before you count on the incentive. See leasing an EV in California.
Before anyone signs
For the person leasing:
Can you make every payment without the co-signer's help, with insurance and California tax included?
What happens to the co-signer if you lose your job, move or want out early?
For the co-signer:
Read the Notice to Cosigner and the lease itself, not just the signature page.
Ask whether you'll be a co-lessee or a guarantor, and what access you'll have to the account.
Ask about the lender's transfer policy, so you know how you could come off the lease.
Think about whether you'll need your own credit for a car, home or business loan during the lease.
How 021 helps
When you're ready, you can send a credit application through 021; approval, including whether a co-signer is needed, is always the lender's decision. Before anyone agrees to anything, you get one written quote with the payment, drive-off, term, miles, taxes, fees and 021's fee, so you and your co-signer both know exactly what's being signed.
If you are asked to co-sign
Before anyone signs.
In California the lender must give a co-signer a Notice to Cosigner before they become liable.
- Read the Notice to CosignerIf you haven't seen it, ask for it
- Read the lease itselfNot just the signature page
- Ask your roleCo-lessee or guarantor, and what access you'll have to the account
- Ask about transfersSo you know how you could come off the lease
- Ask for a release in writingThe FTC says a lender might add one if asked
- Think about your own creditA car, home or business loan you may need during the lease
Common questions
Can you have a co-signer on a car lease?
Does co-signing a car lease affect your credit?
Can a co-signer be removed from a car lease?
What's the difference between a co-lessee and a guarantor?
Who pays lease-end charges if there's a co-signer?
021 Auto Leasing is a licensed California autobroker (license #82402). All new cars arranged for sale are subject to price and availability from the selling franchised new car dealer.