If you need to buy a car after bankruptcy, you are probably aware that most lenders will not be willing to finance you for any major purchases such as a car or home. That is only natural since lenders are concerned whether they can get back their loans from someone who decided to discharged all their consumer debts in court. If you are prepared to go the extra mile to ensure success with buying a car after bankruptcy, try the following suggestions that can increase your chances of getting bad credit car loan acceptance.
While bankruptcy is recorded on your credit report for up to 10 years, you can still try to raise your overall credit score. There is no way any car loan lender is willing to offer you financing if you have very bad credit after your bankruptcy is fully discharged. Start by rebuilding your credit today since this will take some time because almost all lenders and car dealerships will do a credit check on buyers and borrowers.
Lenders That Give Car Loans After Bankruptcy
Forget the 0% APR new car loans, since you need excellent credit to qualify. Instead, look for online lenders specializing in car financing for bad credit borrowers. You can apply at these financing companies even if you have filed bankruptcy previously or have a damaged credit history. It is better than wasting your time at the banks hoping they will approve your car loan application.
It is very important to choose a car you can afford, otherwise you will have problems with the auto loan payments and this will further damage your credit score. If new cars are too expensive and will stretch your finances thinly, consider used cars for sale by owners on auction sites such as Ebay Motors or Craigslist. Applying for a smaller car loan amount increases your chances of getting accepted by lenders who may be concerned about your previous bankruptcy records. Alternatively, take out a bad credit motorcycle loan.
Post Bankruptcy Car Loans
Do you realize that we are not suggesting you to use the in-house financing at car lots to get a car loan after bankruptcy? That is because you will be paying more for bad credit auto loans at buy here pay here car lots. If you have not compared car loan quotes previously, you probably do not realize how expensive in-house car financing can be when compared to the online lenders.
Many people who applied for bankruptcy did not realize the difficult of trying to get loans in future. When they finally find out that normal banks are not going to lend them any money or even give second chance checking accounts, they start to get desperate because of credit checks. If a car dealership offers them a car loan after bankruptcy, they will sign up without a second thought.
Car dealership financing for bad credit are designed to charge high risk interest rates in return for giving you a post bankruptcy car loan. You can bet your entire fortune that these professionals will always win and profit from you. At buy here pay here car lots for people with bad credit, you will end up letting these dealers profit twice from you on the car price and financing.
Pre-Approved Car Financing For Bad Credit
The best way to negotiate a cheaper car price is to have a pre-approved car loan check in your pocket when you go for a test drive. The sales people will know you are a serious buyer and more willing to compromise since they will not want you to walk out and give away business to their competitor down the street.
Another advantage with a pre-approved car financing is that you can ask the dealership if they can make a better offer. You can always choose not to use the pre-approved check in the end and this is how to get cheaper in-house car loans at dealerships.
So, it is possible to buy a car after bankruptcy but you need to realize the ownership costs will be much higher due to the high interest rates for bad credit borrowers. To offset these costs, we highly recommend you to choose a cheaper or used car or truck. Remember to compare post bankruptcy car loan quotes from online bad credit car lenders before you visit the dealerships. Having a pre-approved car loan for bad credit offers you a lot more bargaining power when you are facing the car salespeople.
If you are willing to spend a few more years to rebuild your credit and postpone the car purchase, you can get a much cheaper car loan from banks. That will be less risky on your finances but if you need to buy a car immediately after bankruptcy discharge, a bad credit car loan is the only option albeit an expensive decision.