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Regular Contributor
Posts: 196
Registered: ‎04-15-2011
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Auto Loan after Bankruptcy

I am asking a question on behalf of a friend again. He has a car that he owns more on than it's worth. He is also having engine issues with that car and it's costing him a lot of money. If he includes that car in the BK Chapter 7 and gets rid of it, would he be able to get an auto loan right after the BK if he cosigns with someone who has excellent credit?

EQ - 724 FICO - ScoreWatch (6/2015) | TU - 732 FICO - Lender Pull (6/2015) | EX - ??
Amazon Store Card - $5000 | Amex BCE - $2k | Barclaycard Ring - $2.5k | Capital One - $1000 | Capital One Quicksilver - $3000 | Capital One Venture - $10,000 | Capital One VentureOne - $7500 | Chase Freedom - $3.5k | Citi Diamond Preferred - $1000 | Discover It - $1900 | Macy's - $1700 | Lowes - $12000
Regular Contributor
Posts: 162
Registered: ‎05-14-2009
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Re: Auto Loan after Bankruptcy

car dealerships get lists of people who have filed fo bk. once your friend files, they will be filling up his mailbox to buy another car. i also have a friend who was referred to a particular dealer for a new auto loan since she included hers in bk. (last month) your friend probably won't need a cosigner. i on the other hand chose not to get another auto loan after my bk. i did however take out a small personal loan to pay cash for a vehicle.this was only after my vehicle (paid for) was stolen. hope that info helps.


Starting Score: EQ 505 jul09
Current Score: EQ 702 TU 693 EX 692 apr12
Goal Score: 700+


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Regular Contributor
Posts: 196
Registered: ‎04-15-2011
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Re: Auto Loan after Bankruptcy

Thanks for the info, how likely would he be to be able to get a loan a few days after his discharge on a loan through lets say Ford without a cosigner?

EQ - 724 FICO - ScoreWatch (6/2015) | TU - 732 FICO - Lender Pull (6/2015) | EX - ??
Amazon Store Card - $5000 | Amex BCE - $2k | Barclaycard Ring - $2.5k | Capital One - $1000 | Capital One Quicksilver - $3000 | Capital One Venture - $10,000 | Capital One VentureOne - $7500 | Chase Freedom - $3.5k | Citi Diamond Preferred - $1000 | Discover It - $1900 | Macy's - $1700 | Lowes - $12000
Valued Member
Posts: 32
Registered: ‎05-14-2012
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Re: Auto Loan after Bankruptcy

My husband and I had a Chapter 7 BK discharged in July 2010 and were able to purchase a vehicle from Carmax using Wells Fargo Dealer Services in August 2010.  I think our interest rate was around 13%.  Then in January 2011 my car was totalled and we purchased another vehicle from Carmax using Santander Consumer at 13.5% and refied in January 2012 with Capital One for 9%.  I think it's definitely possible.  We had the best luck at Carmax.  Other dealers wanted to restrict us on which vehicles we could purchase and one wanted us in some kind of special program that we weren't interested in. 

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Super Contributor
Posts: 6,867
Registered: ‎03-06-2010
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Re: Auto Loan after Bankruptcy

[ Edited ]

 


Viper786 wrote:

Thanks for the info, how likely would he be to be able to get a loan a few days after his discharge on a loan through lets say Ford without a cosigner?



I was discharged from Ch 7 BK Jan 2009 and needed a vehicle. Rather than go out and get one with a high interest rate on a large loan, I bought a "decent beater" for $7K. I put down $3500 and financed the rest at a high rate (because I had just been discharged a few days before purchase). The rate was 18% Smiley Sad. But I paid it off in 8 months because the actual payment was low. I drove that suv for 2 yrs and traded it in on my current (used) much nicer, newer vehicle in Jan 2011. My interest rate is 7.14% which is much better than what you can get straight out of BK. I had to pay my dues for having the BK, but who wants to pay a high rate on a large amount for a long time?

 

My point is: once you have come through a BK, don't be eager to borrow large sums on a vehicle at a high rate. Re-establish yourself with smaller sums first. After all, when you are re-establishing your credit there is no additional benefit given to you by FICO to having a high paymentIt's the consistency and timeliness of payments that count, not the size of the payment.  This is where patience can do a world of good when you (or your friend) are post- BK

Contributor
Posts: 208
Registered: ‎05-28-2012
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Re: Auto Loan after Bankruptcy

It is defintely possible to get financing post BK. I was approved via Cap1 Blank Check program for 12% 4 months after discharge.

Credit Karma - 636 8-12-12 USAA
Credit Rebuilding Mode - Cap 1 Plat(500CL) SHOW MC(300CL)
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Posts: 3
Registered: ‎06-09-2012
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Re: Auto Loan after Bankruptcy

What was your folk's fico scores for those of you who were able to get a loan? I'm in a similar situation and need a car. My Fico score is 683. My discharge was in May of 2012. I know for some major dealerships like Honda and others, a 683 will get you their promotional rate(0-2.9%). Do big dealerships turn you down just because of the bankruptcy?

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Posts: 73
Registered: ‎05-21-2012
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Re: Auto Loan after Bankruptcy

I filed BK7 in 8/2006, discharged 12/2006. Bought a new truck June of 2007 (12 more payments left!!). I got an astronomically high interest rate through Capital One Auto. From what I understand, it's a lot easier going now to obtain a car loan than it was when I did. I do not know what my score was at the time. I know it was awful but luckily, I also had two paid off car loans on my CR's already with no lates. Getting my truck helped me keep re-establish credit along with getting 3 CC's.

Starting Score: Jan 2011: 517; March 2012: 620
Current Score: Ex 681 FairIsaac V2; TU 690 Classic04; Eq 642 Beacon5.0-All lender pull 8/13/12
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Contributor
Posts: 208
Registered: ‎05-28-2012
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Re: Auto Loan after Bankruptcy

Things have seemed to loosen up now compared to a few years ago.

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Registered: ‎12-29-2013
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Re: Auto Loan after Bankruptcy

[ Edited ]

I understand that this is an old thread but it still apples no matter how old the post in this subject area.

 

After being finally discharged (Ch 7) this past August (2013), I figured that I would tale a shot in November (2013) to get a new or "Very Good" used car. 

 

The local dealer that I dealt with while going through my turmoil actually worked with me months before filing, with the understanding that I was about to file a BK 7, not many places will do this, but I gave my word that I would reaffirm the moment I filed. Since I was straight up, I was brought to their "Buy Here, Pay Here" location, and picked out a car of my choice - after trading in my vehicle that had too much equity that had to be relieved, I was given a loan, and kept my word.

 

Fast forward just months later, and having established a rapport with the dealership, I called the gentleman that worked with me at the dealership....he was MORE than happy to help me out. We sat down with the finance manager, and the three of us began talking. The suggestion was that I should start with an inexpensive, but newer certified used economy car. I turned and said "no" - I wanted a truck. Mind you, I still owed a few thousand on the car they financed me months before. 

 

We went out into the lot - and there she was - the truck I wanted - certified used, with 29,000 miles and only a year and a half used. Clean, big, and EXPENSIVE.

 

The price was exactly the KBB - we're talking $24,000, plus the difference owed on the other car. So we were looking at close to a 30K loan after taxes, payoff, extended wrap around warranty, and NO MONEY DOWN!

 

The initial payment that was brought back to me was ridiculous, and it didn't include the extended warranty, which is an absolute MUST HAVE! The offer had an interest rate close to 14% and they were giving me six years to repayment. 

 

In the end, with negotiating and the finance guy hitting everyone in the world to finance - I was approved at the price I wanted, and an interest rate under 7% by Wells Fargo.

 

So if you are told something else, by "Finance Experts" - and you like I have a middle-class income - well, then they just don't know what they are talking about. I simplified my payments and pay half the due payment every two weeks - this will have me pay off the vehicle in much less time while not straining my checkbook.

Ex, Eq, TU - Mid 600's
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