Going through a bankruptcy in Seattle isn’t easy. Depending on the type of bankruptcy you file, it could last a few months or as long as five years. Either way, you want to make sure your bankruptcy is discharged – not dismissed – before you get a post-bankruptcy car loan. While we’re not legal experts, we can give you tips for how to go about getting a post-bankruptcy auto loan in Seattle, and point you in the right direction for starting the car buying process.
Steps to Take to Get a Post-Bankruptcy Auto Loan in Seattle
How do you get a post-bankruptcy auto loan? Well Seattleites, the first thing you need to do is make sure your bankruptcy is discharged and that you receive a copy of your discharge papers.
It may take some time before the discharged bankruptcy shows up on your credit reports, so it’s better to be safe than sorry and have your discharge papers with you when visiting a dealership.
From there, you have four steps to take:
Check your credit score and reports – Be in the know about what’s on your credit reports, and about where your credit score currently stands. In addition, make sure the bankruptcy is listed as "complete." If it isn’t but you have a copy of your discharge papers, you shouldn’t run into any issues with a lender regarding your bankruptcy.- Research vehicles – Research the type of car you want. Consider your everyday needs, and look up prices, safety ratings, and reviews.
- Budget and save – Have a budget and stick to it. Make sure it includes the overall cost of the loan, including a down payment, fees, taxes, fuel, and basic maintenance costs.
- Rate shop – You should first try to get pre-approved with your current bank or credit union, but it’s also a good idea to rate shop and compare deals.
Auto Credit Express Tip: If you can’t wait to finance a vehicle once your bankruptcy is complete, it’s possible a lender may ask for a cosigner. It doesn’t hurt to have someone willing and ready to sign the loan with you. Plus, having a cosigner could give you a chance to qualify for a better interest rate.
What Dealership Should I Work With?
If you’re stuck on step four and aren’t sure what type of dealer you should work with in Seattle, don’t worry. We still recommend trying for a pre-approval, but if your bankruptcy was recently discharged and your credit isn’t great, the types of lenders you may have to work with are narrowed down to:
- Subprime lenders – Lenders that work indirectly through special finance dealerships and specialize in bad credit auto financing.
- Buy here pay here (BHPH) dealers – Also called tote-the-note dealerships, BHPH dealers finance their cars in-house, and are both dealerships and lenders.
Both of these lenders require a certain minimum income and a down payment in most cases. The chance to build credit, however, is where these two lenders usually differ.
Subprime lenders report loans and timely payments to the credit bureaus, whereas BHPH dealers usually don't even check your credit and may not report loans or on-time payments as a result.
This is something you need to keep in mind, especially if you’re looking to rebuild your credit after a bankruptcy. One type of lender may work better for you than the other, but it all depends on your situation.
Need Help Finding a Dealer in Seattle?
If you don’t have time to drive all over SODO, Northgate, or anywhere else in the Seattle area, don’t waste your time and gas money – we can do the searching for you.
At Auto Credit Express, we’ve been helping car buyers in Seattle and across the US get the financing they need by connecting them to local dealerships that have the right lending resources available.
To get matched with a dealer, all you need to do is complete our easy, free, and no-obligation auto loan request form. After that, we’ll get right to work connecting you to a dealership!
