How to Buy a Car After Bankruptcy?

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Many people have this misconception that buying a car after bankruptcy is next to impossible. While it is certainly difficult to buy a car on loan after bankruptcy, it is not impossible. It is a challenging task but if you know the right way, you may be able to get a car loan even after bankruptcy.

Usually, the financial institutions will not be willing to give you auto loans just after bankruptcy discharge. It is almost as difficult as getting a credit card after bankruptcy. But a lot will depend upon factors like when you filed bankruptcy, which type of bankruptcy was filed, what were the reasons for filing for bankruptcy etc? Below are a few things which should be considered while trying to get a car loan after bankruptcy discharge.

Usually, no credit institution or bank will give you a car loan till about 18 to 24 months of your bankruptcy discharge. You should not even consider applying for any kind of loan before 24 months since it is almost sure to be denied. Therefore, the first thing you should do is to try and rebuild your credit history during that time. This will help you improve the chances of getting car loan application accepted. There are several ways to improve your credit history which include getting a secured credit card or secured loan, paying all utility bills on time, managing your personal finances etc.

Next, you will need to decide whether you want to take loan from the car dealer or an outside financial institution? While it is easier to get loans through car dealers due to their tie-ups, it is also costlier. Try and see if you can get the loan approval from an outside financial institution first. If that is not possible, only then talk to the car dealer about the loan. It is a good idea to negotiate hard with the car dealer. Since the car sales market is down, you may be able to strike a good deal for yourself. You should search online about various car dealers who are willing to give car loans. Call them up beforehand and let them know your situation. This will help you avoid time wastage.

Another option to buy a car after bankruptcy is to get a bad credit auto loan. There are various financial institutions that are willing to give such bad credit car loans to people in this situation. Please note that the interest rates are going to be very high in such loans. Search online for such creditors. Talk to as many creditors as possible and find out the suitable deal as per your need and budget. Buying a car after bankruptcy will need a lot of research and effort if you want to get the cheap loan application approved.