Many people file bankruptcy as a last resort when debts become manageable. The problem is, life doesn’t come to a stop just
because your credit score has taken a major hit. If you’ve found yourself in this situation, you may be asking, “Can I still buy a
car after filing bankruptcy?” It’s a good question and the answer is- in most cases- yes. There will be some penalties and hazards
for you to navigate. But you can still buy a car in most cases, here’s how.
Cash or Credit
If you filed for bankruptcy and still have an income, you should have been able to sock away some extra cash by freeing up the money you were previously paying to lenders. If this is the case, you should be able to make a larger down payment on a new or used car. If you haven’t been saving more after filing bankruptcy- start.There really isn’t any excuse. If after filing bankruptcy you find you have some extra money on your hands, paying your purchase off entirely is definitely the most cost-effective option.
If you don’t have the money to buy your new car outright, you may be able to get a loan. Filing bankruptcy is not the end of the world, and some lenders will still extend a line of credit to you. You will probably be expected to make larger a larger percentage on the total loan since you will be considered a higher risk.
Don’t be dismayed if you find yourself paying more for loans. This is your chance to repair your credit. Frankly, you should be thankful if a lender is willing to work with you. Using a loan to pay off a necessary item like transportation is a good investment especially since you’re working toward a better credit score.
SubPrime Dealership Financing
Even if there aren’t any lenders out there who will work with you after bankruptcy, there’s a good chance you’ll be able to find a car dealership who will. Many automobile dealers will offer sub-prime loans to folks who are down on their luck. You’ve probably seen them advertised on local television. These loans come with high interest rates. But compared to not having transportation it’s not so bad. Remember, the name of the game is rebuilding your credit score.
If possible, it’s best to wait until your bankruptcy is discharged, or your case is dismissed before buying your next car or truck. This will give you the best chance of securing a loan. Remember, once a lender has turned you down- they will be unlikely to approve you for a loan until your situation changes. Apply strategically, and apply only when your chances of approval are at their best.