So you’d like to buy a car, but you’ve just filed for bankruptcy—where do you begin? Believe it or not, you have several different options. In today’s economy, more people have declared bankruptcy, so more solutions have been developed. Chances are you have a connection to at least one person who has filed for bankruptcy. So throughout this whole process it is important to remember, you are not alone; though it may seem more difficult, people do live full lives after recent bankruptcy. Now, on to your first investment: buying a car. First, make your decision to buy a new or used car. Think about what you are looking for in a vehicle and your budget—most importantly, your budget. Now is not the time to splurge on a new fancy car if you are not yet financially stable.
Next is the process of financing your car. Though a bankruptcy is commonly believed to be a deal-breaking blemish to financing your car, there are still many options. If you are able to get a co-signer with good credit, getting a loan will be no problem. Getting a loan can also be a valuable step in rebuilding your own credit. If you do not want to take out a loan or are unable to get someone to co-sign for you, use your recent bankruptcy to your advantage. After filing for certain types of bankruptcy, you cannot re-file for another 6-10 years so the bank or dealership feels more secure that they will be definitely getting their money from you. When working with a dealership directly, remember to negotiate. Go into the process with figures in your head and stick to them; do not let yourself get talked into something you cannot afford just because it sounds appealing at the moment.
While looking into cars, if going to a dealership, there are often established programs for people with credit issues or recent bankruptcies. First, call around to your local dealerships and inquire about their “Special Financing Department”. This department deals with cases looking to finance cars beyond standard situations. Additionally, some dealerships offer credit rebuilding programs. These programs not only work with you in financing your car, but also help build your credit substantially.
When looking to buy a car after a recent bankruptcy, it is important to remember that you have options and to explore those options before deciding to buy your car. While you should not have your credit checked at every place you go (each check lowers your credit score), never feel the need to settle just because you have declared bankruptcy. Just like those with perfect credit, there are many dealerships and independent sellers experienced with bankruptcies and will work with you.