A vehicle repossession can be a big setback in life, but you may be able to recover from it over a period of time. Many lenders are willing to approve individuals with damaged credit, and your chances could be improved by following specific steps. Begin the process of getting back on the road by learning as much information as possible about buying a car after a repossession.
Pay Your Balance and Fees
Even though your car may have been repossessed, you are still liable for any outstanding balance on your former vehicle. Pay off the difference between what you owed and what your repossessed car sold for to prevent any additional damage to your credit. Be sure to pay any repossession fees, as well, for the same reason.
Save for a Down Payment
A large down payment could improve your chances of being approved for a loan, as it lessens the risk that lenders have to take on. Lenders may also view you as a committed buyer if you already have a sizeable down payment in-hand. Furthermore, this payment will lower the amount of interest charges you pay over the course of the loan.
Wait as Long as Possible
Being approved for a car loan after a repossession is often only possible if you wait until at least one year has passed. In addition, the longer you wait, the less of an impact a repossession will have on your credit score. The time between the repossession and when you apply for a loan will also give you an opportunity to save for a down payment and to improve your credit.
Review Your Credit Report
Receive copies of your credit report from Experian, Equifax, and TransUnion to see an overview of your credit, and you may even want to get your credit score. Having your credit reports in-hand will allow you to check them for potential inaccuracies. It will also give you information that you can use to better understand your credit situation and help you improve it in the future.
Keep Your Credit Cards
Although it may seem like a good idea to close your credit card account if you have bad credit, this may not be the best action to take. While it might seem counterproductive, having a line of credit available to you and using it responsibly has the capability of improving your credit situation. Your credit score often factors in how much credit you use and if you make on-time payments.
Consider In-House Financing
If you desperately need a vehicle after your car was repossessed, consider in-house financing. These Buy Here Pay Here or Tote the Note dealers typically do not check your credit, and they may allow you to finance an automobile if you meet their qualifications. However, you will probably have to pay higher interest rates at these types of dealerships.
Apply Online with Us
When you are ready to buy a car after repossession, apply online with us. Auto Credit Express will match you with a dealership that will give you the best shot at being approved for an auto loan. We have assisted many individuals that have had their vehicle repossessed, and we may be able to do the same for you.