If you file for bankruptcy, buying a car is not off the table for you. Many companies will still give you a car loan even if you have a troubled financial history. You can also seek secured car loans, which require you to offer something as collateral if you default on the loan.
However, there is a catch: these loans often come with very high interest rates. Here are some tips on how to buy a car in a financially responsible way after bankruptcy:
- Stay within your means. Don’t buy a car you can’t afford — this could lead to more problems repaying your loans. Look for inexpensive, used cars that will meet your needs as you rebuild your finances.
- Increase your down payment. If you can afford it, paying more up front will lessen the amount you'll need to take on in loans. This will make it easier to get a loan in the first place and decrease the amount of interest you pay overall.
- Rebuild your credit. Bankruptcy is a chance to start fresh. Make your loan payments on time and your credit score will begin to improve.
- Refinance. After six to twelve months, you can refinance your car to get a lower interest rate.
Additionally, we offer clients a course to help you increase your credit score, even after you've filed bankruptcy. In as little as one year, you could improve your current score to a 720 or A rating. While it typically costs $1000 for this course, our new bankruptcy clients get access to this powerful resource for FREE.
Castle Law Office has been handling bankruptcies for Kansas City clients from more than 14 years. If you need the fresh start bankruptcy can provide, call us today at 816-842-6200 to speak with an attorney. Or click here to email us and schedule your free consultation.