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New Car Post Ch 7 BK

New Visitor

New Car Post Ch 7 BK

Went last night to go look at some new vehicles due to our current one is a little out dated and gas waster (V8). Figured that a bank would rather approve a loan on a new vehicle than a used. We were told by the sales manager that post BK is an automatic 18%APR!! We may have to settle for either a certified pre owned or even used vehicle. No problem as long as it doesn't have high mileage and is fuel efficient. At this point I'm wondering if it doesn't matter what credit score we have 620+, we'll still end up with a high interest rate. I know if worse comes to worse, we can refi within a year or so. Any advise you could give would be great!!
Message 1 of 14
13 REPLIES
Community Leader
Valued Contributor

Re: New Car Post Ch 7 BK

A couple questions:

 

- Have you started rebuilding your credit, as in a credit card?

- Did you include Capital One in you BK? Whether you did or not, they're credit card pre-qualifier is a good place to start with a CC. It won't pull your credit report to pre-qualify, only if you apply. https://findmycard.capitalone.com/en/PageVersions/LandingPages/LP_ONE_V01.aspx

 

Capital One Car Loans is also a good place to start looking for a car loan:

https://www.capitalone.com/cars/?PFFSRCID=S-GG-1234567890K-SEM-0001&referrer_id=31722168200400144396...

 

I strongly recommend you DO NOT shop for a car loan at a dealer, they can submit you info to a dozen lenders resulting in a dozen inquiries on your credit report, further damaging your credit.

 

Have you considered a used rental car? I bought a 2013 car from Hertz Car Sales in Jan. 2015 and was very pleased with the transaction and the car. "No haggle price", the price posted is what you pay, and you pick it up as a 3 day rental. 3 days to check it all out, if you decide to not to buy  you just return & pay the rental fee, if you decide to buy they waive the rental fee. But you do need a CC with enough credit limit to rent it. They can help with financing, I had my own low interest loan from a credit union pre-arranged, 5 years post BK. Other rental companies also sell their own rental cars. Rental cars are usually very well maintained.


Fico 08: 720/721/719 TU/EX/EQ
Message 2 of 14
Regular Contributor

Re: New Car Post Ch 7 BK

I just bought a new (to me) car last month, 3 months post-discharge. Check out Capital One and see what rate they will give you. It is a soft pull to pre-approve and I was able to get up to $40K for a range of interest rates between like 2.8 to 5% (depending on vehicle and terms). I had previously done this the month I discharged (10/16) to see where I was. At that time they were willing to give me $40K but at a range between, I think, 5-9 or 10%. The pre-qualification is good for a month, It gives you an idea where you stand and if the terms are agreeable, the knowledge going into the dealer that you are all set with financing no matter what. Obviously, it's a hard pull when they actually process the loan and I did see a couple points drop in the last couple days when the loan reported. I never thought I could get into a decent vehicle at a good price this soon and am thrilled because my old car was becoming a money pit and a hazard.

I was able to find a 2014 Escape Titanium with 7600 (yes, 7600)  miles on it (came off a lease) and financed just under $20K for 72 months at 4.24%. They ran my credit at the dealer and could not even come close (the best was like 7% and most wouldn't touch me). The finance guy said I had the highest score he had ever seen in his 23 years working there for someone in my situation (721 Auto- don't recall what version) but the BK kept lenders away. I had waited a while before finally filing so my lates are older and a couple of my creditors never reported me to the bureaus so my situation is a little different.

I am a HUGE fan of Capital One. They gave me a credit card right off the bat with a $3K limit, just last night gave me a $300 increase, and in another month or two, I will be eligible for another increase with their Credit Steps program. I am pretty sure they are the only ones who will do a soft-pull prequalification too.


CH7 BK Discharged 10/16
Oct/Nov 2016: EQ 632 TU 532 EX 573
Feb 2017: EQ 695 TU 673 EX 670
March 2017 EQ 702 TU 676 EX 673
April 2017 EX 683 (TU & EQ unknown)
May 2017 EQ 695 TU 685 EX 693

Gardening since 9/7/17 Aiming for a mortgage October 2018
Message 3 of 14
Regular Contributor

Re: New Car Post Ch 7 BK

I should add that Capital One was IIB for me.


CH7 BK Discharged 10/16
Oct/Nov 2016: EQ 632 TU 532 EX 573
Feb 2017: EQ 695 TU 673 EX 670
March 2017 EQ 702 TU 676 EX 673
April 2017 EX 683 (TU & EQ unknown)
May 2017 EQ 695 TU 685 EX 693

Gardening since 9/7/17 Aiming for a mortgage October 2018
Message 4 of 14
Community Leader
Valued Contributor

Re: New Car Post Ch 7 BK

Yes, check the Capital One Auto LOan, they have a pre-qualifer page that will indicate if & what they would loan without pulling your credit, the pull credit only if you apply for a loan. And do NOT shop for a car loan at a dealer, they often send your info to a bunch of prospective lenders, resulting a bunch of new inquiries which will hurt your score.

 

Have you considered a used rental car? I bought a 2013 car from Hertz Car Sales on Jan 2015, and was very pleased with the transaction and the car. They have a "No haggle price", the price they post on the web site is the price you pay. And you pick the car up as a 3 day rental. Three days to check it all out, if you decide not to buy you just return it & pay the rental fee, if you decide to buy they waive the rental fee. They can help with financing, I had my loan all arranged ahead of time from a credit union.


Fico 08: 720/721/719 TU/EX/EQ
Message 5 of 14
Community Leader
Senior Contributor

Re: New Car Post Ch 7 BK


DG88 wrote:
Went last night to go look at some new vehicles due to our current one is a little out dated and gas waster (V8). Figured that a bank would rather approve a loan on a new vehicle than a used. We were told by the sales manager that post BK is an automatic 18%APR!! We may have to settle for either a certified pre owned or even used vehicle. No problem as long as it doesn't have high mileage and is fuel efficient. At this point I'm wondering if it doesn't matter what credit score we have 620+, we'll still end up with a high interest rate. I know if worse comes to worse, we can refi within a year or so. Any advise you could give would be great!!

Just because there is a BK doesn't mean it's an auto 18%APR.. It may be hard to find a low APR, but not impossible. Good luck!

Filed BK7: 7/2012 (start score EQ 560 / TU 529) Discharge 10/2012
730 EQ FICO 11/2017
750 TU FICO 11/2017
735 EX FICO 11/2017
$20k NFCU Platinum | $25k NFCU cashRewards Sig | $15k NavChek | $7.1k Cap1 Quicksilver | $10k Amazon Store | $19k Cap1 VentureOne | $16k Barclay Aviator | $5k Chase Freedom | $5k Chase Sapphire Preferred | $9k Costco Visa | $20k AMEX BCE
Message 6 of 14
New Visitor

Re: New Car Post Ch 7 BK

Carfinance.com financed us 6 months post dc. 38k @ 8%
USAA Amex 6k, USAA Visa 2k, NFCU Visa Signature Cash Rewards 5k, NFCU NavCheck 8.5k, Cap One Plat $500, JCP $600, Walmart $700, Kohls $700, VS $500, LB $1.4k, BOA AmeriCard 1.5k, Merchants $750, CC $1.2k, ON Visa 2k
Message 7 of 14
New Visitor

Re: New Car Post Ch 7 BK

Well we burned FMC in our BK. Im slowly establishing whatever credit I have left after the BK. My husband has more of the "established" credit pre-BK. He's done research on most of the sub-prime lenders and most of the APR's are really high. Our APR with Ford was 7.9%. If we could be closer to 10%, the better for us because we could refi after 12months. Granted we are willing to put money down to show we're serious buyers, we just need to get a "newer" vehicle. We're trying to follow the 700/24 guidelines to get started on this rebuild, unfortunately it didn't come with instructions on how to fit in an auto loan into this mix Smiley Indifferent

Message 8 of 14
Regular Contributor

Re: New Car Post Ch 7 BK

I was able to finance a brand new vehicle, @ 2.99% ($31,000+) just days after my BK 13 was discharged.  My CR showed pre-BK auto loan that was paid, closed, no lates.  That might have had something to do with it?  Also, my income is steady and pretty good.


Cap1 QS Visa $11,000 | Cap1 QS WEMC $10,000 | Citi Costco Visa $5,500 | AMEX BCE $3,000 | AMEX HH $1,000 | Chase Disney Premier $2,000 | CU Rewards MC $2,000 | PayPal 2% MC $2,000 |
Message 9 of 14
Valued Contributor

Re: New Car Post Ch 7 BK

Definitely check out Cap1 auto and the other SP places like Wells Fargo, etc

 

2 days post DC i was preapproved for $35k at ~3%-13% depending on make/model, etc.....got my wife a new car just 3 days after DC. 

 

You can do it...don't let them tell you otherwise. 

Learning from my past and rebuilding..

BK discharged 1/10/17
scores: EQ 659 | TU 630 | EX 659

QS 3.8K | WF 500 | Cabela's 3k | ACU 500 |

Message 10 of 14