auto finance options post Ch7 for $4K car.

[onthepath]

Hi, I was discharged back in October. A huge part of my filing involved the medical bills and amount owed after my car was totalled. I was severely injured in the car accident. I knew I would be needing another car soon. I am back at work and the vehicle I am using was intended for my teenager's first car to get around locally. I travel for work quite a bit and have had to rent a car each time. The car I'm using has 256K miles with expensive repairs needed (cat converter among other things). Plus we share it for my day job, he has a part time at night and also has school activities in the evening. Anyhow, I stumbled into a car that is 4K and seems decent enough. It's a 2010. I am assuming that auto financing wouldn't touch this being so old and being so cheap. I'd like it financed and then to pay it off with tax refund in March or so, this would avoid paying the high interest rate too long. I am pretty sure I can get financing for something more expensive in the not so distant future, but I'd rather get something cheap. Maybe look into the possibility of a newer car sometime next year when the dust settles and my scores move. I am currently in the low 600 - 610s fico. I've heard some mention a personal loan but am thinking they wouldn't touch me either. Hate to see a what appears to be a decent deal on a reliable gas saving vehicle slip by when my car could die at any moment. Any suggestions to look into would be so appreciated.

[Girlzilla88]

Please don't do it!!!    I know it is very tempting but unless you have the cash you can throw away on it or you know the person that owned it personally then I wouldn't put my money into it!     With it being december see if you can buy a super cheap trim that may be offer Down Payment Assistance or something Demo (demonstration vehicle that the price is lowered) since your CS are in the 600's I'm assuming you checked your Auto scores?!   Then you are actually sitting pretty ok you also want to check with the dealership you are interested in how many banks/lenders they work with so that can help you know how flexible they can be (you want it to be over 20/25 if possible).     If you have a Bank/CU you use/trust you can also see what kind of SMALL auto loan they can do for you and take that to the dealership but you want to try to get something NEW (that is cheap) and yes they are out there lol.    So 15k or less and see about paying 0 that day for the DP (or if you get it through your Bank/CU even better) if you do decide to do preowned PLEASE buy extended warranty and make sure as much is covered as possible as a lot of issues can pop up on older vehicles even ones that are seemingly in great shape.    But Personal Loans are harder to get for higher amounts (at least in Ga) I'm not sure about your state?!    But even if it's only 4k that is still considered a 'high amount' to a lot of lenders for personal loans.  :/

[Girlzilla88]

Side note also see if that dealership deals with people that are or were in a BK because if they can that may help you out even more even though it is already on the way side....I think that is the right expression lol

[FireMedic1]

You can try Cap1 auto navigator for a pre=approval and see what amount they will finance. Its a SP. Once you see what they offer. You can look for a dealership/car from Cap1's website that you can take the pre-approved letter to right from Cap1's website saying your already approved. May save you a ton of HP's. Has to be newer than 10 years old and not over 120,000 miles. Sign in loan. Drive off.

[Dj4Money]

 You shouldn't have the problems I am having currently with scores in the low 600's.

 You can try Cap1 but get new because you can refi it twice inside of 12 months to get out of the 20% interest zone. Can't do that with a used car really as your refi options are severly limited.

 One person already posted one month out of BK got a loan on a 2019 Jeep from Chrysler Credit/Santander with zero down @20%. OP joined a credit union and on a whim after getting a promotional email from them to apply for refinance. Got the loan down to 9%. They can do it again, say with Capital One or a major bank like BofA and cut it in half again or even more.

 Used, non CPO won't fall below 8% in most cases.

[Anonymous]

I personally don't understand telling someone who is trying to keep things frugal and buy an inexpensive car to go out and buy a new one instead.

YES any used car has potential issues, but this risk can generally be circumvented by taking the car to a mechanic to be checked out before purchase.

Extended warranties are a ripoff unless you're buying certain vehicles with serious known reliability issues. If I wanted a used Range Rover or MINI, then by all means I'd be getting one.

$4k can definitely buy a reliable car with a lot of life left in it . . just make sure to have a mechanic check it out.

To the OP, the tricky part is that cars in this price range are hard to finance. If you can get your ducks in a row and file taxes ASAP, maybe you can get the refund in February vs. March and just baby your current car another 7-8 weeks and find something you can afford for cash.  I would drive it ONLY when needed and supplement with uber/public transportation/sharing rides to keep wear/risk of failure at a minimum.

[Harriet]

Scions are great cheap cars.  If I was in your shoes I'd keep limping along w the older car while saving cash for a replacement and repairs. You'll be there soon and this will give you the freedom to find a reliable car from a private party sale versus a dealer.    


Don't jump the gun into a bad loan became of a "deal". There are many deals to be found all the time. 


Hunt and research for a good used car, Toyota, Honda and Scions will be in that range and the right one could last you 10 years for 5k.  Very reliable cars.  Also older Lexus sedan are very reliable and great values.  Usually well taken care of since they are expensive brand new.  


Best wishes. Buying a good used car is not an easy process.  

[onthepath]

Thank you all so much. I appreciate the well intentioned advice to buy a new car but that is out of the question and would be a very poor financial choice for me. I’m a single mom who doesn’t make a huge amount...just under 30K. I am fortunate to be able to provide a fairly comfortable home for my teenager children thanks to reliable child support and to not being lavish at all. My child support will be halved within the year when my oldest graduates. I have to prepare for a large hit there and savings is paramount.

Because of this I am being extremely careful. A car payment for any extended amount of time is out of the question for our family. The money I was putting towards my car payment before the accident will eventually be going into savings, right now it goes towards car rentals. I refuse to spend much longer living paycheck to paycheck. Had I had savings when I crashed I might have avoided the BK. To compound the problem, I have a 17 year who was driving when we wrecked and a 15 year old on her permit in the household. Within a month of the car being totaled by car insurance went from 100 for a full coverage policy and for a collision only on the beater. After the wreck I am now paying just under 200 for collision only on the old beater were driving. Two teens and a maxed out payout has made expensive to insure. A newer vehicle with payments would require full coverage and when I’ve looked at quotes they all had me over 350 in insurance alone. That’s more than I paid for my car payment and car insurance on both vehicles pre crash. I had hoped to finance (realizing that’s not possible now) a 4K vehicle of some sort and making payments til March then paying it off. That would still leave me enough in savings to outright replace it should the unforeseen occur again or a needed repair. I was going to do what I could like taking into be inspected. I have only ever had used cars and while they come with the risk, im not one to live beyond my means. My income is definitely not new car friendly. A warranty is also unlikely, if I can set aside a couple hundred dollars a month that I would otherwise be paying to a bank for a newer vehicle. So basically having payments long term when my household income is about to be reduced and my insurance rates are through the rough would be insanely irresponsible.

Sadly Ubering or carpooling isn’t really an option in my area. I only use my beater the bare minimum but my job requires regional travel. I’m an state caseworker so I work alone and travel throughout the area. A couple times a month I have to go out of town which has resulted in the necessity of renting a vehicle. Hence the lack of savings.

Cap1 isn’t showing me love on the auto site Maybe once their card reports a few times it will. Hopefully my luck holds out while I wait for taxes I suppose. Thanks so much for

[Anonymous]

I agree.

You can find a car for cheap that's reliable. I've never paid more than 5k for a vehicle and we actually have what I would consider to be nice cars and 1 car that I put alot into as my hobby. The trick is finding small mechanic shops that will look at the car before you purchase, find a car that's cheap to maintain ( and Honda or older Chevy), and be willing to forgo some options.

We currently have a 01 CRV that we paid 1200 for, then put about 300 into, and paid 300 to have it painted at Earl's. Looks and drives better than alot of my friends 10k plus cars. We took it to the dealer and they offered us 1700 cash not trade in, so that's already a win. Just an example.

If you can hold out until tax time, you will find that alot of people are selling their cars cheap bc they can't have multiple cars and/or don't want to take a huge loss on a trade in price.

Alot of people make the mistake of taking their cars to big shops, small shops like mine will save you alot of money sometimes. Idk what all is wrong with yours but a cat replacement at my shop is not expensive at all.

Just some thoughts!

Good luck!

[twono]

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@Anonymous wrote:
I agree.

You can find a car for cheap that's reliable. I've never paid more than 5k for a vehicle and we actually have what I would consider to be nice cars and 1 car that I put alot into as my hobby. The trick is finding small mechanic shops that will look at the car before you purchase, find a car that's cheap to maintain ( and Honda or older Chevy), and be willing to forgo some options.

We currently have a 01 CRV that we paid 1200 for, then put about 300 into, and paid 300 to have it painted at Earl's. Looks and drives better than alot of my friends 10k plus cars. We took it to the dealer and they offered us 1700 cash not trade in, so that's already a win. Just an example.

If you can hold out until tax time, you will find that alot of people are selling their cars cheap bc they can't have multiple cars and/or don't want to take a huge loss on a trade in price.

Alot of people make the mistake of taking their cars to big shops, small shops like mine will save you alot of money sometimes. Idk what all is wrong with yours but a cat replacement at my shop is not expensive at all.

Just some thoughts!

Good luck!

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I have an 02 CRV, 200k miles that i paid $2500 for 3 yrs ago.  1- owner car, Perfect interior, all wheel drive, ice cold air, sunroof, etc.... I 

bought it fom Craigslist 

Also have an 04 Honda pilot that i bought 2 yrs ago, 1 owner, 150k miles, leather, dvd player, 3rd row seat, heated mirrors, etc...paid $1800.  Craigslist as well and owner was a retired navy guy...could not have been 40 yrs  old.  Must have put his 20 yrs in and retired.

I havent had a single problem out of either vehicle.  I drive 80 miles roundtrip for work.  

Tips for craigslist finds or facebook marketplace:

-use the search function and filters

-search '1 owner' vehicles

-price range maximum $2500 or $3000 or $4000....whatever cash you have

-pay attention to the background of the pictures.  Type of home, neighborhood, other cars that may be 'high-end' sitting in the driveway, etc.

OP - you could also try a buy here pay here.  $60 wk.  Just have it checked out by a trusted mechanic prior to buying.