Bankruptcy is extremely stressful and in such situation, if you need to buy a car, it is could be terrifying. However, you need not worry. The proposition may seem impossible but you can buy a car even after bankruptcy. There are several lenders and dealership who can help you to buy a car. In order to buy a car after bankruptcy, there are certain things that have to be considered.
Take a look at your credit scores and credit reports
Your credit scores or reports may not be pretty but it is better to have a look at them before the car financing company goes through it. You may both be looking at different aspects of the reports since the lender will have a customized report in hand. But you would get a fair idea of your standing when you see them. You must pay attention to what the report is saying about your previous car loans as those are checked by the car loan company primarily. It would make a positive impact if your previous car loan payments were made on time.
Save more for a down payment
Car loan approval takes less time if the lender is less worried. To make that happen, you need to have more money to offer for the down payment. You would now have some extra cash flow since the bankruptcy has wiped out your debt. With less money to pay for a loan and with your car as collateral, it will become easier to get a car loan.
Look out for affordable options
Collect all the information you can find related to your finances and spend a day to get pre approved bad credit car loan. You must also limit your daily shopping to avoid the impact of multiple inquiries on your credit scores. Try to get a loan pre-approved before you visit the dealer. This is the best leverage you can get. You must also know that for recent bankruptcies, the rate of interest on the loan is higher and the same varies with new and old cars.
Choose your loan provider sensibly
Buying a car after bankruptcy may be a little difficult. It is also suggested not to go for the car lease or loan offered by the “buy here, pay here” sort of dealers. That should be your last option as this could increase the interest rate, making it difficult to pay. Moreover, selection of cars may not be that great with them. Some cars they offer do not even work properly. You do not want to end up with a large car payment along with repair bills. You must also be vigilant about any kind of auto financing contract. Always go for the loan that you can comfortably pay as filing for bankruptcy is not an option anymore.
Pay on time
The best thing about taking a car loan after bankruptcy is that it can improve your credit score provided you pay the installments on time. People who bought cars after bankruptcy had better scores than who did not as per research.
Keep a close check on your credit scores when you are considering to buy a car after bankruptcy. Pay your bills on time for about six months to one year, you will have better credit scores. You can then apply for car loan refinance to a lower rate of interest.
Another place where you can go to buy a car at a cheap rate is police auction. Cars at police auctions are sold at fraction of a price. Look for cars that they have and whether they work for you or not. This will help you buy a car after bankruptcy. Choose one after complete inspection. You want something that is worth the price you pay.
Buying a car after bankruptcy also calls for buying insurance. It is to ensure safety for all. If your car is damaged in an accident, the insurance company will pay for it. However, auto insurance fraud is something nobody should attempt to do. It can impact very badly on an individual.