Many people that having a prior bankruptcy and the resulting poor credit will prevent them from financing an automobile purchase. That is not necessarily true. While it can be a challenge to find a lender willing to work with you, with a little effort and planning, it is possible to get a car loan after bankruptcy.
If you know that you will be looking to finance purchase a car with a bankruptcy in your history, it can help to reestablish some credit prior to approaching a lender. One way to do this is by having a credit card. Obtain either a secured or unsecured credit card and use it for a while paying your balance on-time monthly.
The good payment history from a credit card can help your credit score increase. It also shows the auto lender that you are a serious and responsible borrower. These things reflect positively on you on a loan application and increase the chance you will be offered financing for your auto purchase.
Even when you have taken the time to start building good credit, a past bankruptcy is likely to result in financing offers with higher interest rates than those offered to borrowers with excellent credit. Higher interest rates mean higher payments. Know the exact monthly payment amount you can comfortably afford and do not waver from it while shopping.
Lenders may also require a down payment before they will extend credit for your auto purchase. It helps to plan for this scenario. Start saving now for a down payment. Maximizing the down payment will also reduce the loan required, lowering your monthly payments in the process.
Don’t let a bankruptcy on your credit history discourage you from vehicle shopping if you need a new car. Proper planning and realistic expectations will help you get a car loan after bankruptcy.
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S.A.S.S. Auto Group is located in Guelph, Ontario and also serves Kitchener, Waterloo, Cambridge, Milton, Brantford, Hamilton, Fergus, Elora, Puslinch and surrounding areas.
50 Malcolm Road A, Guelph, Ontario N1K 1A9
Tel. No.: 519.822.2277 519.822.CARS (2277)