Do I have the right to purchase a vehicle following Chapter 7 bankruptcy? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our goal is to help you make better financial choices by offering interactive financial calculators and tools that provide objective and original content. This allows you to conduct research and compare data for free to help you make informed financial decisions. Bankrate has agreements with issuers including, but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money The deals that are displayed on this website are provided by companies who pay us. This compensation can affect the way and where products appear on this website, for example for instance, the order in which they be listed within the categories of listing, except where prohibited by law. This applies to our mortgage, home equity, and other products for home loans. This compensation, however, does not influence the information we publish, or the reviews that appear on this website. We do not cover the vast array of companies or financial offers that may be available to you. Share: Maskot/Getty Images
2 min read Published March 31, 2022
Writer: Jerry Brown Written by Contributing writer Jerry Brown is a contributing writer for Bankrate. Jerry writes about home equity, personal loans and automobile loans and debt management. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since the end of 2021. They are passionate about helping readers gain confidence to take control of their finances through providing clear, well-researched information that breaks down otherwise complicated topics into bite-sized pieces. The Bankrate promises
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If you have questions about money. Bankrate can help. Our experts have been helping you master your money for over four decades. We continually strive to give our customers the right advice and tools required to be successful throughout their financial journey. Bankrate follows a strict policy, therefore you can be confident that our information is trustworthy and accurate. Our award-winning editors and reporters provide honest and trustworthy information to assist you in making the right financial decisions. Our content produced by our editorial team is objective, factual and is not influenced by our advertisers. We’re honest about the ways we’re capable of bringing high-quality information, competitive rates and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We receive compensation for the promotion of sponsored goods andservices or when you click on certain links posted on our website. So, this compensation can influence the manner, place and when products are displayed within the categories of listing and categories, unless it is prohibited by law for our mortgage home equity, mortgage and other home lending products. Other factors, like our own rules for our website and whether or not a product is available within your area or at your own personal credit score may also influence how and where products appear on this website. Although we try to offer the most diverse selection of products, Bankrate does not include details about each credit or financial product or service. When you file for Chapter 7 bankruptcy, it may be on your credit report for up to 10 years from the filing date. Through this time it is possible that you will require a car. It is, however, more difficult, you can get a car loan following bankruptcy. To offset the higher risk that comes with bankruptcy, a lender might be able to charge you a higher interest rate or require more of a down amount. Should I buy a car after bankruptcy? The answer to this question is contingent on your financial situation and the transportation requirements. The affordability of any car you purchase should be well within your budget. Ensure that it is by , not just the cost of the car. Current transportation If you already have reliable transportation, it could be a good idea to wait purchasing a car. Your interest rate will likely be less than ideal in the event that bankruptcy remains appearing on your credit record. Using cash: Avoiding an auto loan prior to the bankruptcy being removed from your credit report could be the best option. With cash, you can skip the loan entirely. 3 ways to finance a car with an auto loan following bankruptcy If you are trying to finance your car using an auto loan after bankruptcy, you might have more difficulty in getting a lender and some may resist working with you. Once you have found an lender willing to allow you to borrow money, you probably will not be eligible for the . 1. Pay-here and Buy-here dealerships an online search you could encounter buy-here, pay-here dealerships that do not require credit checks. Although these dealerships will assist you in the event that you have had bankruptcy, you may end with a bill that is higher than what the car’s value. Before using this option make sure you do your research and inquire about hidden costs. 2. Credit unions If your credit union is one of them , you could try applying for an auto loan at a credit union. Since credit unions are not-for-profit owned by members, you may have better chances of securing financing. In addition, you may have the chance to get a lower interest rate. 3. Co-signer If these options don’t work, a different option could be to get someone with good or excellent credit, to be a cosigner on an automobile loan on your behalf. Before going this route, explain to the person . If you fail to pay your loan the co-signer would be held accountable for the loan payments which could adversely impact their credit. When to purchase a car depends on your financial situation. While the right time to buy your car varies depending on your financial situation and your personal situation, it is the time when you’ll get the best deal and interest rate. Waiting till your credit rating is improved to purchase a vehicle could lower the interest rate that a lender gives you. If you’re not waiting and are in need of transportation right now, you should look for the most affordable deal. Because of the pandemic certain car makers were forced to shut down their factories for months and saw sales and inventory fall. If you’re in need car, you may want to to circumvent the lack of new cars. Be sure to conduct your research and don’t purchase a vehicle you can’t afford. The bottom line While you are able to buy a car following bankruptcy, you should expect to pay an additional interest rate in the event you take out an loan. Although you wait for your credit rating to increase may lower your rates however, it’s not always feasible. Research all of your lending options before you take out the loan. Take advantage of available incentives from dealers and avoid dealers that have hidden fees. Learn more:
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Written by a contributing writer Jerry Brown is a contributing writer for Bankrate. Jerry writes about home equity, personal loans and auto loans as well as debt-management. Written by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate from late 2021. They are committed to helping readers gain confidence to take control of their finances by providing concise, well-researched and well-written details that cut complex topics into manageable bites.
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