Auto Finance After Bankruptcy – 3 Easy Tips For Getting Back on the Road
Getting auto finance after bankruptcy can be a bit of challenge nowadays and as the economy struggles even more, it will probably become harder. But there are little things you can do to improve your chances of getting finance and after reading this article, you’ll have three workable tips for getting started. These three tips I am about to reveal are tried and tested; all that’s needed is your input, so let’s get started…
Tip #1: Bad Credit Doesn’t Equal Exploitation
I am not going to mislead you on this, if you’ve been declared a bankrupt, getting decent finance is pretty hard. But it doesn’t mean you should jump on any offer that comes your way; especially if there are extremely high interest rates involved.
Lenders will argue that they need to protect their money by charging you high interest, but where is the ceiling? Auto dealers are notorious for this practice of charging sometimes four times the lending rate to people coming out of bankruptcy.
The solution is to search for the best rate that matches your wallet. There are lots of subprime lenders who will work with you to get you financed without charging an arm and a leg.
Tip #2: Increase Your Contribution To The Purchase
Not many people do this but when looking for auto financing, it helps a great deal to have some sort of deposit or down payment. The greater this amount, the more favorable the lender will look upon you.
Now I know that this suggestion is a bit counter-intuitive, after all, one is looking for financing. The reality is however that bankrupts are seen as a huge credit risk and so anything that you can do to help your chances should be considered. Often, the amount you find doesn’t have to be a whole lot – think 5 – 10% of the loan amount.
Tip #3: Avoid The Dealers
Auto dealers are a bankrupts worse enemy. As you can imagine if a dealer has car sitting on his lot, he will do anything to sell it – his business doesn’t do very well if he isn’t selling cars. Due to this pressing problem, dealers target people with poor credit and offer them all kinds of crazy deals to entice them to purchase.
Quite often, the dealer will offer financing deals at some of the most explosive interest rates possible. On top of this, they try to lock you in with very long loan terms. This can leave you after 2 or 3 years with what you call an upside down auto loan.
Getting auto finance after bankruptcy is very doable. People do it everyday and now that you’ve read this article you can do it too. Start with an online search for a great deal. If you are lucky, your search could start and end there since there are lots of great deals to be had online.