New Car/Used Car

[Darkbandit]

Hi all,

I should be coming up on my discharge date within a couple of days (my mom who filed at the same time that I did got her discharge paper today), and I am in need of a new car. The reason I had to file in the first place was due to the beast of burden constantly having issues with it.

I know I am going to be upside down for trading it in and am looking for something that will get me something reasonable for maybe 450-500/month in payments, however would it be in my best interest to look for a new car or a good used car that I could find at somewhere like CarMax?

[Amy26]

You'll probably be better off with a new car because they can play around with the numbers more on new cars. Post BK when I app'd at Carmax I got some really crappy offers. But I ended up getting a brand new Ford at a Ford dealership. Financing was through Americredit at 17.9%.

[helpmeout]

You won't be trading in the car with the loan that has been discharged in your bk, correct? Once you are discharged, you no longer owe the money. All you would be doing is increasing the cost of the vehicle you buy.

Personally, I got a used car when my car was totaled in an accident. I couldn't afford a new one. And I didn't have to take the big decrease in valuation once I drove a brand new car off of the lot. Shop around and see what is out there.

[Amy26]

Oh good point helpmeout... I didn't realize that the car he was trading in was probably a non reaffirmed car. You can do what I did and just voluntarily surrender the car back to the lender and then just get another without a trade in.

[Kuya]

You can do a used car or new car . . but sometimes used car is harder to get, when you have poor credit. Especially if you are trading in a car that has a balance due on it.

About 6 months before I filed BK13, I needed to get a car because my current car died. My Credit Score was already in the dumps . . for missing payments and falling behind on bills.

I wanted to find a cheap used car to get a loan on. I figured that I can afford about $150/month and that if I can find a $3,000 - $5,000 car, I should be in my budget of what I can afford for payments. WRONG.

Banks would not touch me. When you have poor credit, a bank wants equity on any loan they give you. Banks know that if you fail to pay for the loan, and they must repo your car . . a used car holds very little value at the auction. They will not be able to recover their money.

I was denied over and over for a used car purchase. However, I was approved at 7% to buy a brand new car. I hated buying a new car with a big payment . .but what else can I do? without a car, I can't get to work. We do not have public transportation here.

Even when your credit is bad, they would rather have you buy a new car at $500 to $600 a month and blow your budget . . . because there is more equity in the new car, if they have to come take it back.

If you have a trade in where you owe money, it gets even worse. For example: If you want to buy a $7,000 used car, and you are trading in a car that you owe $3,500 on . . . the Dealer will try to finance the whole amount $10,500 to the bank . . on a car that books a value of about $7,000. Banks will run very far away from this situation. For someone with poor credit . . this is a dangerous place for a bank to get involved.

Usually, but not always, you have an easier time getting a loan for a new car, when you have poor credit.

[dumpinmydebt]

Sometimes it is harder to get a used car. When we had crappy credit, we had to get a car that was 2 years old or newer, with low miles.