How Long After Bankruptcy Can You Buy A Car?
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Bankruptcy is a difficult process and a huge hit to your credit score, but it isn’t nearly as bad as it used to be. You might think it’s impossible to go out and make a big purchase like a car shortly after bankruptcy, but it’s not!
Even though there might be a few bumps in the road, and you’ll have to take certain steps to get started, you can certainly still purchase a car on reasonable terms. This process can be complicated and overwhelming to some. Luckily, you’ve come to the right place. CoPilot will walk you through everything you need to know regarding how long after bankruptcy you can buy a car, getting you on the road as soon as possible while saving some money to boot.
What to Do Before You Buy a Car
Although the question you’re wondering about is how long after bankruptcy you can buy a car, you might also ask yourself how long it is until you should buy a car. You see, your credit score probably did take a substantial hit when you declared bankruptcy, but it’s by no means a lost cause. In a relatively short amount of time, you can take steps to start rebuilding your credit score and make the process of buying a car a lot easier on yourself (not to mention cheaper!).
A great initial step is to take stock of your credit reports and approve their accuracy. There could be outstanding details on these reports that shouldn’t even be there that are worsening your credit score. Make sure everything is up to snuff before continuing. From there, it can be wise to use a credit repair service to help rebuild your score.
These services should understand that bankruptcy is a chance to start over and repair your finances, and their job is to help give you that opportunity. Waiting to buy the car you really want and using a cheap car in the meantime is also a great way to buy yourself more time to build credit. We know this last option isn’t ideal, but if you’re willing and able to spend a small amount of cash on a very temporary ride until your finances are looking a bit better, you can go into the next purchase with a greater credit score and a lot more wiggle room.
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How Long After Bankruptcy Can You Buy a Car, Really?
The answer to this question is a little tricky because it varies wildly depending on the particulars of your financial situation. If you happen to have enough money on hand to buy your next car and you won’t need a loan, then there’s no wait whatsoever that you have to go through to buy your next car.
In fact, your bankruptcy shouldn’t even be relevant here. In the event that you do need a loan, though, then it might be some time before it’s a good idea to buy a car. The major factor affecting how long after bankruptcy you can buy a car is the time it takes for you to get back on your feet. For some, this can be a matter of months, while for others, it could be a year or more. Following our tips for rebuilding your credit score will make the process much easier and shorter regardless of your situation, so let’s get into that now!
WHAT TO DO IF A DEALER REFUSES TO CANCEL EXTENDED WARRANTY
Car buying can occasionally be frustrating, especially if you’re purchasing your vehicle through a dealership. We’re here to tell you how to navigate a situation in which a dealer refuses to cancel your extended warranty.
How to Buy a Car after Bankruptcy
If you find yourself needing to get an auto loan to buy a car after bankruptcy, loan lenders will give you a harder time due to your recent financial troubles. However, there are many financial institutions designed to help people in these situations, and there are steps you can take independently to raise your odds of being accepted for a loan. Here are the best ways to rebuild your credit and shorten the time you must wait to buy a car after bankruptcy:
- Get a co-signer. The role of a co-signer is to be a backup source of funding in case you’re unable to pay for the loan. This way, the lender can be comfortable knowing that someone will pay them no matter what, and it greatly improves the chance of them approving you for a loan. Finding someone close to you that you can trust to be your co-signer for the loan application is a great idea if you’re able.
- Have a steady source of income. Your recent credit history might not be wonderful, but proving that you have a way to pay the bills consistently will be a huge help. You’re very unlikely to get approved for any sort of loan without this, as they’ll have little reason to believe that you’re good for your payments.
- Make a decent down payment. Making any kind of down payment on your car before purchasing will let you reap many benefits. The payment doesn’t even have to be large, but it does have to meet the lender’s standards if they require one. By putting down some money on the car upfront, you’re reducing the principal of the loan because you’ll be taking out less money total. This means lower interest payments and an easier repayment plan and shows the lender that you’re more than willing to get started paying off this car as soon as you can.
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- Go through a community bank or credit union. You have to be a member of one of these institutions in order to get help from them, but if you can swing it, they’re a great resource. They often offer programs for people who have no credit or bad credit. It’s usually worth a try to give them a call and explain your situation because you never know what they’ll wind up offering.
- Look around at all your options. Your bad credit doesn’t mean you have to take the first choice given to you for financing. Take a look at specialized lenders that specifically help people with bad credit, unique financing programs, financing options from the dealers themselves, and any other source of financing you can find before signing a contract. You may find that you can get much better loan terms than you expected!
Get a Curated List of the Best Used Cars Near You
The CoPilot car shopping app is the easiest way to buy a car. Tell us what you’re looking for and we’ll search the inventories of every dealership in your area to make you a personalized list of the best car listings in your area.
Only looking for newer models? CoPilot Compare is the search engine for nearly-new cars. Only see cars five years or newer with low mileage — CoPilot Compare is the best way to find off-lease, early trade-in, and CPO cars.
The best part? CoPilot is built using the same technology that dealerships use to buy and sell their inventories, so we have more info on each vehicle than competitors. CoPilot doesn’t work with dealerships, so there are no sponsored posts or other shady practices — just the most info on the best cars. Check out our About Us page to see how CoPilot works.
