Almost everyone needs a car today although there are a few exceptions, such as living and working in a major city, but for the most part adults that need to earn a living need a car. Some people have jobs that require the use of a vehicle or for others the simple task of going back and forth to work. Sometimes there are a series of unfortunate events in a person’s life that cause them to file for bankruptcy protection and then they find themselves asking about buying a car after bankruptcy. I hope this post will help anyone that is asking that embarrassing question.
If you or someone you know should find them asking that question you should know buying a car after bankruptcy is possible. There are many times where people are forced to file for bankruptcy by no fault of their and that is very unfortunate, however that is not the subject here and subject of this post is to provide some information for those that need to move on and make fresh start.
Options for Buying a Car after Bankruptcy
I don’t mean to sound like a smart a** here, but the easiest way to buy a car after bankruptcy is to pay cash. You might say that you are broke and you don’t have any cash to buy a vehicle, but whether you finance or pay cash you will need some cash to buy a car. Let’s look at this a little closer, if you need a car to run local errands and commute to a local job, buying a cheap used vehicle might be the answer. It might not be new and impressive, but it might be a good idea to find a private party that is selling a used car for a couple thousand dollars. If you could make this work for a while you will be money ahead as you will see shortly.
If your job requires you to have use of an automobile, drive clients around or you travel a long distance to work every day or if you just can’t do it then a cheap used car is not a feasible solution. So your next option is to buy a new or at least newer car that is dependable and appropriate for the ways you use your automobile. With that being the case you will need to buy a car after bankruptcy, but you will also need to finance your vehicle.
Financing and Buying a Car After Bankruptcy
There are lenders that will allow you to finance and buy a new or used automobile after your bankruptcy, but there are conditions. Obviously your credit score has taken a hit since the filing and discharge of your bankruptcy, but your credit will still have an impact on your ability to finance a car. Every condition is different because every credit report and personal situation is different. You might think it is a car dealer scam, but it’s legal.
For example, if you have a good job and your credit report shows fair credit in the past, but problems in the recent past up until the bankruptcy there is a very good chance you can finance and buy a car. However if your credit report shows nothing but derogatory information your chance of finding a lender are reduced greatly. I didn’t same impossible, I said reduced. Buying a car after bankruptcy has many variables that need to be considered before a lender will say you are approved. You may also consider Buy Here Pay Here car dealerships if you have been turned down by traditional auto dealers.
There are many lenders that specialize in the financing of car buyers after bankruptcy and these are usually called secondary lenders. These lenders are willing to take the risk on people that are buying a car after bankruptcy, but they expect to get paid for that risk. To start with they will charge a very high interest rate that may be as high as 24% and secondly they also charge a fee either to the buyer or the car dealership for processing the paperwork and other overhead expenses. This could be as much as a couple thousand dollars depending on your credit, the car being financed and your personal situation.
Now besides the rate and the fee they will also require certain stipulations. These requirements may include proof of employment, pay check stubs, copies of current utility bills, bankruptcy discharge paperwork and other possible documentation. Wait there is more. You will be required to have a down payment on the vehicle you are buying that could be anywhere from $1500 or more which will depend on your situation and the vehicle being financed. I told you buying a car after bankruptcy is possible, but I didn’t say it would be easy.
I wish I could give you a solid yes or no when it comes to buying a car after bankruptcy, but as you can see there are many different factors that come into play. If the hoops you need to jump through to buy a vehicle after a personal bankruptcy are more than you want to endure the other than the cash car your last option is a Buy Here Pay Here car dealer. If you are ready to take the next step for buying a car after bankruptcy you can click here and get approved first by one of a very large source of specialty lenders that can give you the definitive answer.