Many people assume that when they go through bankruptcy, they will never be able to buy another car. The truth is that financing a car after bankruptcy can be one of the best ways to rebuild your credit, if you keep a couple of simple points in mind.
Be Realistic About Your Next Car
Although that shiny new car in the showroom may be tempting, you won’t be able to rebuild your credit if you can’t afford the payments. When buying a car after bankruptcy you are going to have higher interest rates, making that expensive new car even more difficult to afford. Instead choose a more basic car, or a used car, which will easily fit into your budget.
Another thing to consider about auto loans after bankruptcy is that most dealerships will require a significant down payment of 10-20%. Choosing a more basic or used car will mean less money down and smaller monthly payments.
Because of this, buying a used car could be the perfect solution. A reliable used car can hold its value while promising years of solid service. You may want to request a CARFAX report, to find out about any major damage, and help you avoid costly hidden problems.
Rebuilding Your Credit
Not all auto loans after bankruptcy are created equal. Many Buy Here Pay Here (BHPH) car lots fail to report your timely loan payments to the big credit bureaus. This does nothing to help rebuild your credit.
BHPH car lots can also be very unforgiving and offer little to no grace period for repaying your loan. Some install GPS devices in the cars which allow them to repo the car if you are even a day late with your payment.
Here at BankruptcyAutoFinancing.com we only work with finance companies that help you rebuild your credit. We can help place you with a subprime lender who understands your situation, and will get your credit back on the road to recovery.
Remember, we are not lawyers and cannot give legal advice. The situations discussed are only our experiences over the years and may vary with each customer.