If you’re wondering how to get a car after bankruptcy, the process doesn't have to take long, but you’ll need to take some time to do thorough research as well as double check your credit and finances.
Important Steps to Take
After a bankruptcy, you might want to take some time to prepare yourself for a subprime auto loan. When you go through the car buying process, there are three steps you need to take in order to get things lined up:
- Pull your credit reports and scores – The first step you need to take is to see where your credit stands. It’s also crucial to double check your credit reports afterward to make sure the discharge is listed, and you can also look for mistakes to dispute. You’re entitled to one free copy of your credit report every 12 months from each of the three major credit bureaus – Equifax, TransUnion, and Experian. For a small fee, you can request more than one copy, if needed. If you notice any mistakes, make sure you dispute them with the respective bureaus as soon as possible to have them fixed. If your discharge isn’t listed, make sure you have a physical copy to take to a dealership. For an additional fee, you can also get your credit scores along with your reports, or you can get your scores from another trusted source.
- Do some car research – The next step is do your research. To find the right vehicle for you, you can visit sites such as The Car Connection and CarsDirect to compare makes and models. Make sure you pick a car that’ll fit you and your family’s needs, as well as your budget. There are many reliable used vehicles to choose from out there for you to consider.
- Prepare for a down payment – The final step is to calculate your budget and prepare for the down payment requirement. Using online tools, you can estimate how much you’ll need to save up for your down payment. Because you’ll probably need a subprime auto loan, you likely won’t be able to avoid this requirement. The amount varies by lender, but you’ll typically need to put down a minimum of $1,000 or 10 percent of the car’s selling price, whichever is less. If you can, putting more money down can help you save money in the long run on interest charges and decrease the time the vehicle is worth less than the loan payoff.
Be aware that you'll be paying a higher interest rate on your auto loan if you have bad credit, but you may be able to refinance your auto loan in 12 to 24 months for a better rate.
The Bottom Line
If you’ve received your discharge and are looking to finance a car after a bankruptcy, finding a dealer that can work with you can be a challenge on its own. Luckily, Auto Credit Express specializes in helping car buyers with credit issues find dealers that can help.
We match car buyers dealing with difficult credit situations – even bankruptcy – to local dealerships that are trained in special finance. Get started today by filling out our free and secure auto loan request form online.