An auto repossession can make lenders feel uneasy, but you can typically get approved for a car loan after a year has passed. Because you'll likely need financing through a bad credit lender, the max car loan you can get after repossession depends on several factors, such as your income and credit profile.

Auto Loans for Repossessions

Having your car repossessed can make it seem like you won't be able to qualify for another auto loan. In fact, a repo stays on your credit reports for up to seven years from the original delinquency date, but its impact on your credit score lessens over time.

You can get a car loan with a repossession on your credit, but you'll likely need to get financed through a subprime lender. These lenders are willing to work with car buyers dealing with credit challenges, but even they generally state that any repossession must be over a year old before they'll consider an applicant – and you can forget about getting financed if you have multiple repossessions on your credit reports. The only exception for most of these lenders is if the repo was included in a bankruptcy.

The bottom line is that it's difficult to get approved for an auto loan after repossession unless it's at least a year old. If a year hasn't passed, we suggest that you take some time to prepare for a future loan. You can do this by requesting your credit reports to make sure all information is accurate, working to improve your credit, saving up for a down payment, and getting familiar with the typical requirements of subprime lenders.

If you can't wait a year, another way to get auto financing is through a buy here pay here dealership. These car lots do in-house financing, which means they don’t use third-party lenders. They usually don't check your credit and simply rely on your income to qualify you.

Max Car Loan after Repossession

Getting an auto loan following a repossession typically means you'll need subprime financing. The bad credit car loan process works a little differently. To get approved, you have to find a dealership with subprime lending connections and discuss your situation with their special finance department.

Once you fill out an application, they'll transmit it to their subprime lending partners. If approved, the lender sets the maximum monthly payment, as well as the other terms of the loan, such as the interest rate and down payment requirement. So, the max car loan you can get after repossession depends on many different factors including the lender’s programs.

The biggest three factors that determine the loan amount you can get are your income, credit profile, and debt to income (DTI) ratio:

  • Income: Subprime lenders typically require a minimum monthly income of $1,500 to $2,000 before taxes. Of course, the more you make, the bigger the auto loan you typically can qualify for.
  • Credit Profile: Your credit score is used to determine which loan program or tier you qualify for, and where you land on the lender's scale influences the loan terms you're able to get.
  • DTI Ratio: This calculation is found by taking the sum of your monthly bills and dividing by your pre-tax monthly income. The DTI ratio gives lenders a better sense for the amount of disposable income you have to cover a car loan.

Bad Credit Repo Car Dealerships

In most cases, you can get a car loan following a repossession after a year has passed. Additionally, the max car loan you can get depends on many factors. We suggest you take a close look at your budget and focus on choosing a vehicle that you can comfortably afford so you can use the car loan to rebuild your credit.

If you need help finding a dealership that can work through credit issues such as repossession, Auto Credit Express wants to help. We work with special finance dealerships all across the country and have helped thousands of people with bad credit find financing. Start the process by submitting our online auto loan request form today.