Getting a Loan After a Repossession

[DistantDreamer]

Hello,

About three years ago I had a voluntary car repossession. I was working part time and going to school full time and got into an accident couldn't afford to pay the deductible and the car payment/insurance. So eventually gave back the car. It was an upside down car, so took until a few months ago to pay the remaining balance after auction per the new monthly settled price. Once it was paid off my score went from 570 to 627. I have no credit debt, but just opened a secure credit card with $500 credit to help build my credit. I have student loans I pay on time and everything else has always been paid on time.

I make 65K, and currently live at home rent free. I've had my same job for over 4 years (but full time now as of the last couple years).

I'd like to now buy a used car. Will a company such as Honda still offer me financing since I make enough money to cover it and simply request a large down payment and high interest rate? Or will it be a flat out no? I don't want the hard inquiry if there is no chance they will approve.

Or is there better luck through a bank and or a credit union?

Otherwise there are plenty of sites that say they approve everyone but imagine there lots of catches with those.

I'd like to buy say a 16k car and I could put down 7k, or more if needed. Buying it all wish cash however would take a few more months, and I'd rather have it on my credit report that I bought a car and paid it off.

Thanks in advance!

[DistantDreamer]

I found a thread on Loan Approvals and it appears people with credit lower than I and less income with repossessions are getting approved which is promising.

Still trying to see which bank is the best for my situation.

Also is is true, you can apply for as many car loans as you want in a 30-45 day period and it only counts as 1 hard inquiry? As long as you only go forward with one?

[Anonymous]

You said you currently live at home no rent, have 7k or more for down payment and you make 65k.  Is there a reason you could not save the additional funds and cash flow the car?

[pritchardhallhokie]

Yes, I think you'll be fine.  I'm assuming you are interested in financing the car rather than paying it in cash because you want the positive TL on your reports, if so that's a great idea.  I would get the loan, put down a big payment then finance a small amount.  That will do two things:  1.  give you a reporting car loan and 2. make a higher APR not so bad considering you'd only be financing a fraction of what would normally be financed for a new car.  These are all assumptions/suggestions.  Let us know how it goes.

And yes, you're correct about the multiple inquiries counting as one within I think 30 days.

[DistantDreamer]

I'm not sure I understand what you mean by, "save the additional funds and cash flow the car"?

[DistantDreamer]

Yes, I'd like to finance to boost my score, as well as being able to get it sooner than later, as well as having more money on hand in case of emergencies.

Would it be better to apply to a credit union, bank, or the dealership? I could try all three, but not one seems to be sure about the 30 day only 1 hard inquiry thing. Trying to find it written somewhere by Experian and the other two. Thanks!

[Anonymous]

you are going to have serious problems getting and securing a loan and may simply have to settle for very high rates if you do get one.

You have an income but do not have a current history other then a bad experience.

and that is going to hamper your efforts.

Scores do not drive car loans alone.  I would expect you to need at least half the vehicle value down on the loan.

Living at home and having no rent or housing obligation is NOT considered a plus in an auto loan, as you are living at the obligation of others and your living situation is actually at their pleasure.  It would be best for you to say you pay rent of $500  a month.

You may also mitigate your bad history by looking for and securing a relationship with a credit union or bank that is less conservative.

[DistantDreamer]

USMC,

That's what I had originally thought, but I found a thread on here with 1000s of people reporting there results of applying for credit, and whether for auto loans, morgage, or credit card, which banks, which interest rates, if they have a repossession, how much they make, their credit score etc...

And it appears other than high interest rates, all them are getting approved, and most make half as much as I do, and have lower credit scores, and are financing cars much more expensive that I would be, and putting down much less than I would be.

So looks like it won't be that bad at all, well then again considering if I had great credit I could get 0 APR compared to 12-18.  But luckily I would be paying if off rather quickly but at least over a year maybe two, to help improve my credit.

Thanks for you help guys!