Financing a Car

If you take the time to reestablish a positive credit history after your California bankruptcy discharge, financing a car will be easier than you might imagine. While you may have to plan more carefully, in the long-term your vehicle financing can help to maintain your credit scores or improve them. When financing a car after your bankruptcy discharge, you should keep the following in mind:

1.       Be prepared to make a down payment. In many instances, having a down payment can make the difference between obtaining financing and having to wait for your credit scores to improve further. Making a down payment also reduces the amount you’ll pay in interest over the loan.

2.       Avoid dealer financing. This may seem counter-intuitive, as many dealerships offer to finance people who have credit issues. However, you will likely get more favorable terms on your loan if you can obtain financing through your bank or credit union.

3.       Get preapproved. If you have a good relationship with your bank or credit union, you may be able to get preapproved for your financing before you enter the dealership. By working with your bank, you can avoid having the car salesman pull your credit report during the buying process. Just don’t go overboard while searching for preapproval – multiple inquiries on your credit report will drive your score down, making it more difficult to get financing.

If you are willing to take the time to save up for an initial down payment, and are willing to explore different financing options, chances are good that you will be able to finance a car after your bankruptcy discharge. How long you have to wait after your discharge to obtain financing will vary depending upon how much time you spend rebuilding your credit after the bankruptcy is discharged. If you have a solid payment history that begins right after the discharge is granted, you may not have to wait as long as someone who does not.

Contact our California Bankruptcy Lawyers today – we can help you to understand how filing for bankruptcy may affect your ability to get vehicle financing in the future, and what you can do to maximize your chances for approval. Don’t delay – the sooner you take advantage of our free initial case evaluation, the sooner you can make the right choice when it comes to your financial stability and peace of mind.