How to Buy a Car After Bankruptcy
Bankruptcy can happen to the best of us. Anyone can fall behind on bills after losing a job or suffering from a major illness or injury. Many people also fall prey to the lure of easy credit or let their spending habits get away from them, racking up high credit card charges over time.
Bankruptcy provides the fresh start that most people need to get their financial future back on track. However, if you file bankruptcy, it can take some time before you can be approved for new credit, which can make it difficult to buy a new car. Here are a few things you can do to make the process a little easier.
Work on Building Your Credit
You can begin rebuilding your credit immediately after your bankruptcy is finalized. Pay all your bills on time, avoid delinquencies, and keep your overall debts low. By taking these simple steps, your credit score will slowly inch back up, and you’ll soon qualify for the credit you need.
Save As Much As You Can and Pay Cash
You don’t have to buy everything on credit, though credit does make big purchases easier. Start saving and you may be able to buy the car you need without financing. However, even if you can’t save that much – and most of us can’t – you can still save a lot to put toward a down payment. The bigger your down payment, the more lenient lenders will be with you despite your bad credit. You may even be able to get better loan terms.
Shop a Buy Here Pay Here Dealership
Dealerships that offer Buy Here Pay Here in Rhode Island provide financing for those who have no credit or poor credit. You may be surprised to learn that you can easily qualify for auto financing, even with a recent bankruptcy.
In some cases, you may pay a slightly higher interest rate, but the tradeoff may be worth it since you are unlikely to get approved for other types of financing. You can use the loan to help you rebuild your credit and can always refinance later if you think it’s worth it.
Bankruptcy is not a death sentence for your credit. If you take these steps, you can easily qualify for the financing you need when you are ready to buy your next car.