denied for car loans 5 years post BK

[Jmharvey]

My husband and I filed chapter 7 in 2010. Since our Discharge we have been working to restablish credit, 2.5 years ago we purchased a used car with a prime lender with an interest rate of 8.99% about a year or so later we bought my car with an interest rate of 6.25% both loans weren't the easiest to get it did take negotiating with banks. both car loans are paid on time every month never missed a payment at all. my husband wants to trade his car in for a newer/used car we still owe on his car so would need to roll some into the new loan which is part of why we are leaning toward used. we went to a dealer yesterday and the bank they used came back with 12% APR which seems totally crazy when I have 2 car payments that are paid on time that are lower APR's. we both have good paying jobs, and live well below our means. my husband did use Lexington law for about 6 months this past year to clean up his report of negatives and we thought we would be good to get a loan after that but are totally frustrated that we can get a loan 5 years later. anyone experience this before? I know some people who have gotten new cars 1 year post BK that make far less then we do. I just don't get it.

[LadyInTheRed]

I suspect the high interest rate is due to the fact that you will roll part of the old loan into the new loan. The loan will be underwater from the beginning. I suggest your husband continue to drive his current car until he can trade it in or sell it for at least what he still owes on it.

[bcohen]

I second the advice that you resist the temptation to "upgrade" your cars needlessly, taking on unnecessary debt in the process. Until/unless the car needs repairs that exceed 100% of its current Blue Book value, or is no longer large enough for your needs, you should keep driving it! It is best to keep a car until it no longer runs, and is beyond economic repair.

[Drazil65]

I third this advice, also know that as hard as you worked t clean up your credit and get financially right, rolling an old loan into a new one is one of the worst financial mistakes you can make. Consider it a blessing that the interest rate came back so high and you took a set back to reconsider, you dodged a bullet!

[anderson238]

Yep, Been there, rolling over, and over and over.... one loan was $10K more than the car was worth, but HEY they were willing to give me nice low interest rate loans for 96 months...
keep this car for as long as you can, save up some money.... Have you opened any CC since 2010? they are the devil, but 35% of your credit build.... keep them low and pay them off each month.
If you had previous Auto loan issues before the BK, this could be affecting you too, as the auto score for cars is different. good luck!

[Cash4ever]

7 years post bankruptcy and having a hard time getting an auto loan. We filed Chapter 7 in Aug 2009 and were discharged in Nov 2009. In Apr 2010 we bought a 2007 Chevy Suburban and had no trouble getting a loan (interest was very reasonable). We decided to not open any credit lines or use credit cards. We paid the vehicle loan off early about a yr or so ago. Fast forward to present....we are ready to replace my car and we are being penalized because we don't really have any credit/debit. I have one small ($600 limit card i use for business). It sucks that the banks want you to be in DEBT before they want to loan you money. We were planning on putting down $3,500 cash down on a 2014 MB GL450.....one lender said they needed $20,000 down! We make $140k a yr and only have rent payment, we cash flow everything else. We are BEYOND frustrated with the whole process.