Going through bankruptcy can be a very stressful time for many people. Even when your bankruptcy case is closed, your worries aren’t over. Going through bankruptcy can make it feel impossible to get credit for a while. If a lender does want to give you credit, it seems like your only options are high interest rates and unaffordable payments. What can you do if you’re in need of an auto loan shortly after bankruptcy?
Set a Budget
If you’re in need of a new car, there are a few things you can do to avoid overpaying for a vehicle after bankruptcy. First, be realistic about your budget. Decide what you really need out of your vehicle, decide on a price you’re able to pay and stick to that budget. Remember, you want to make sure that you will be able to comfortably pay your monthly payments so you don’t end up in another stressful situation.
Make a Larger Down Payment
Next, save up as much for a down payment as possible. A larger down payment will decrease the amount of money that you need to borrow, and that means you won’t be paying as much each month or in interest over the life of your loan. If you hold off on purchasing your new vehicle for a month or two so you can save a little more for your down payment, you could save hundreds of dollars by the time you’re done paying off your auto loan!
Get a Co-Signer
If it’s an option, you may consider asking someone to be a cosigner for you on your auto loan. If you have a relative that has excellent credit and is willing to co-sign your loan, you might be able to bring your interest rate down dramatically. A co-signer essentially promises to take responsibility for your loan in the event that you’re unable to pay. If you have someone willing to co-sign on your auto loan for you, make sure that you don’t take out a loan that you’re unable to afford. That would spell bad news for both you and your co-signer.
Not all used auto dealers are created equal. Some dealerships take advantage of customers when they know that they have less than perfect credit. They will either try to push you into a loan with terrible terms or convince you that your vehicle choices are extremely limited and you should be happy with whatever car they put in front of you.
At Credit Country, we take a different approach to auto financing. That’s because we ARE the bank! Our mission is to give everyone the financing that they deserve. We don’t think that your past should stand in the way of you getting a great, reliable used car at a fair price. So, if you’ve recently declared bankruptcy but are in need of a new car, come down to our dealership, we want to work with you!