Believe it or not, you aren't stuck with your first post-bankruptcy car until it's paid off. It is possible to trade it in to get a better interest rate. This will allow you to upgrade to a better car at a lower interest rate. Here are some tips on getting the best auto loans after bankruptcy using this method.
Your First Post-Bankruptcy Car
The interest rate on your first post-bankruptcy car is going to be higher because you will be seen as a high risk borrower. Because of this, you will want to hold off on buying your dream car. Instead, you should buy a cheap used car after bankruptcy that will meet all of your basic needs.
Because you don't plan to keep this car for the long term, it's important to keep an open mind. Choose a car that has the seating and cargo space that you need, but that doesn't have all of the bells and whistles that you want. This will help you save money, and you'll look forward to the day when you can purchase your dream car.
Ideally, this first loan should be for 36 months, and the payments should not exceed more than 15% of your income. By making all of your payments on time, you should qualify for lower interest rates after 18 months. You should also have some equity built up on your car, and will be able to use it as a trade in towards your next car.
Where to Get an Auto Loan after Bankruptcy
Whether you're buying your first post-bankruptcy car or your second, it's important to know where to get an auto loan after bankruptcy. Many traditional lenders aren't going to work with you until your credit has been reestablished. That's where online auto finance companies, such as BankruptcyAutoFinancing.com, come in.
We have a large network of lenders and dealers that work with bankruptcy clients. It doesn't matter if you filed chapter 13 or chapter 7, or whether your bankruptcy is open or discharged. We have loan options available to fit every situation.
Take the first step by filling out our easy online application. An auto loan expert will contact you with your pre-approval amount and set you up with a local dealer. Then a friendly sales person will help you pick out a car, truck or SUV that you can drive for now, and trade in down the road.
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.