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Don't be embarrassed,
get approved.

Trying to get an auto loan after you have filed for bankruptcy may seem pointless.  People think, “How is a lender going to approve my auto loan after I’ve gone bankrupt?”. The truth is that there are financing options out there for people with both Chapter 7 and Chapter 13 bankruptcies. Many feel embarrassed or ashamed to ask for a new loan after going bankrupt, scared of what a lender might think.  We are here to help clarify the process of getting approved for an auto loan after a bankruptcy, so that you can move forward in the right direction.

Maybe You Are Asking:

Is it even possible for me to get a car loan after experiencing bankruptcy, or having bad credit?  What if I don't even have any credit history? If it is possible, then what's the angle? A huge number of people have undesirable credit or have complications from having had experienced bankruptcy. And every day these people are buying vehicles!  Possible?  For sure! 
Let me explain:

Providing lending options is what banks do!

When the economy is in a depressed state, there are increasing numbers of people who experience credit challenges or bankruptcy. This causes banking institutions to become less stringent in their lending practices - they have to in order to survive. Someone with a poor credit rating may or may not have the very same rate of interest on a car loan as someone with excellent credit (although lending institutions as well as dealerships have had to step up in their ability to be competitive in this regard, simply because those with a "perfect credit score" is plummeting every year).

Loans for vehicles are secured loans

What does this mean? It means that your vehicle is used as collateral, and the bank is usually much more likely to provide financing for an auto loan as a result. Though they don't readily own up to it, banking institutions know that a bad credit score doesn't mean you will not make your payments. As a matter of fact, an individual who has undergone bankruptcy and is seeking to obtain an auto loan can actually be in a better financial situation to make their monthly payments than someone with a much higher credit score! In addition they are aware that financing a car is a terrific way to raise your credit score. If you have a history of making payments on time, then lenders will want to keep you as a customer, this can even lead to other opportunities for future loans - all a consequence of having an excellent payment history.

The automobile industry is extremely aggressive.

When looking to sell a new car or truck, dealers are looking to actually sell a vehicle rather than just make an exorbitant profit on a particular vehicle. Automobile manufacturers actually pay the dealer using incentives - based on the volume of cars sold, not the amount each vehicle is sold for. What does this mean? It means as a dealers volume of sold vehicles increases, the larger their incentives grow. There are actually dealers out there who are willing to lose money on a car or sell it at cost to get these incentives. This makes getting financing easier for a vehicle. There are even car dealers who will provide the financing for your new car through the dealership, this gives someone with poor credit or who has filed bankruptcy some opportunities to acquire a loan that they might not be able to find anywhere else.

Lending Terms Decoded

for the First Time Car Buyer!

To be honest, the words that car dealerships use and banking institutions when funding car loans are very confusing.  We have put together this glossary of terms to help you better understand financing terms and language when buying your first car!

Automobile Finance and Insurance
Car Loan Legal Terms
Credit Related