Buying a car and co-signer questions

[eener]

We are in desperate need of a new car. We already have awful credit because we defaulted on everything except our mortgage a little under 2 years ago. The only way we can get a loan is by paying way too much for the car and having a 22% or higher rate (paying 6k more than the car is worth, when you include our trade) with a $400 a month car paymet for 7 years on a car worth 11k. We've talked to several car dealerships and it's just not possible to get anything that we can afford.

We have 1 person with excellent credit that would most likely co-sign...but we don't want them to know about the bankruptcy. That's not even possible is it? I know that when we file the bank will be contacted and we will have to reaffirm. Will the co-signer all be contacted? Will they also have to reaffirm the debt? I know that their credit will not be affected at all unless we don't make a payment.

Does anyone else know how to get a car? Has anyone had any luck with awful, awful credit and getting a car loan? I need advice because my car is not going to make it 3 more months without putting about 2k into it.

Thanks in advance!

[eener]

My husband thinks we should just buy a new car, but I don't see how we would get approved or afford the payment on a 20k + car with a 22% interest rate.

[Pandora]

have you filed bk already? If so - have you been discharged? If no discharge but filed - did you include the car?

If you havent filed yet and are considering filing - do not get someone else to co-sign for you - you will just ruin their credit as well as make them responsible for the car should you 1. not make the payment, or 2. not be allowed to keep the car. Honesty is the best policy, so be upfront and then let THEM decide if they want to be on the hook for you.

Do you have a lawyer? What does he/she say about this situation?

ETA: what is the payment you think you can afford a month?

[eener]

We have not filed and do not have a lawyer yet. I do want to be honest, it's my husband that doesn't want the would be co-signer to know of our credit situation.

We are also slightly over the means test, so we need a car payment to be able to file chapter 7.

Is there a chance that we wouldn't be allowed to reaffirm? We could easily afford a $250-300 payment but we want a reliable car. I wasn't so upset about the interest rate, it was what we were paying for the cars. One dealership offered the car at $13,900 (already overpaying but we were willing to), then gave us 2k for our trade - but we were financing 15k with 22% interest. So it was like we paid $17,000 for a car worth 11k! The $13,900 online was a cash only price and the dealership was charged a closing fee from the bank for $1800. We would want to pay off the car early (since we will be in a better situation after BK and we will be giving up our house) so the bottom line is more important to me than the payment.

We've always paid cash for cars until now. We've always been financially secure until I got sick 3 years ago. We've never financed a car and we've always bought private party.

[Pandora]

I do want to be honest, it's my husband that doesn't want the would be co-signer to know of our credit situation.

Tell hubby that even asking for a co-signer is already a red flag waving; if your credit was good / paid bills on time - banks wouldnt require a co-signer - so it wont be a surprise to the person co-signing that something isnt right.

are you looking at a new car vs. a used one still under warranty? If so, then keep looking around. Also, why you may think you can afford $250-300 a month for a car payment - BK papers may say otherwise, so if you havent run the means test yet - do so - that way you have some idea of what you really have available vs. what you think you have. Also, make sure you run whatever year/make/model by your ins. company to see what the rate would be, being aware that if you're in a credit profiling state, it will probably go up once you file BK.

Never reaffirm if possible; if you have a retain and pay option, that would be better.

[frogger]

We are in desperate need of a new car.

Perhaps in need of a car, but not in desperate need of a "new" car.

Buy only what you can afford. Don't drag anyone else into your financial problems...

[eener]

Perhaps in need of a car, but not in desperate need of a "new" car.

Buy only what you can afford. Don't drag anyone else into your financial problems...

When I said new car, I ment new to me. I can't imagine buying a new car, it goes against everything I've ever known, lol! I've never paid more than $8500 for a vehicle and I've always paid cash going private party. We have always been very frugal and got into a financial mess because of medical issues. When the medical issues started and I couldn't work we lived off of credit cards (and paid medical bills with them). We are looking for a van with under 75k miles.

I don't want to drag anyone into our financial problems. It just looks like we can't get a loan without a co-signer and we need a new (to us) car. If we are actually able to get financing ourselves our payments will be around $400 a month for 6 years, if we get a cosigner it will be $200 or less for 5 years.

I don't want to mess with anyones credit. I didn't realize that I might not be allowed to keep the car.

[Pandora]

is there any way you can put aside the $300 projected car payment for the next 3 months - and then fix your current vehicle? That would give you $900 to put into it (at a minimum if you didnt add anything to it).

What year is your current car? Value? Etc

[eener]

is there any way you can put aside the $300 projected car payment for the next 3 months - and then fix your current vehicle? That would give you $900 to put into it (at a minimum if you didnt add anything to it).

What year is your current car? Value? Etc

Our current vehicle is a 2002 with 170k miles. Trade in it's worth 2k in excellent condition - it's not worth putting more money into it (we've put over $1500 into it over the last year already). It also needs new tires and the cheapest set is over $600. I'm also pregnant with twins and we need a van.

We are in a really bad place and I'm afraid the car will break down at any time. It's the one bad vehicle we've ever purchased. We paid $5500 for it in 2008 and have put about 3k into it.

[eener]

A lot of our issues is my husbands pride and the fact that his family (who we would go to for co-signing) is very judgemental about credit issues. When I first got sick we tried to sell our house, but we bought right before the market dropped (I was also in real estate, so even after I could go back to work there was not much work).

Does anyone have any tips or advice on getting financing? Are there any banks that we can go through without going to a shady car dealership? I don't even know how to finance a car with good credit, let alone awful credit.

[eener]

We bought a car yesterday...with no co-signer! We got an 08 minivan with 47k miles. We paid $13,995 and KBB private party value is $16,500 - we also got 2k for our trade! Our mechanic said the van is in perfect condition and the carfax was super clean, we bought it from a great dealership. Our payments are $350 per month for 60 months - we got approved through Wells Fargo and our interest rate is only 17.9% - I was expecting it to be much higher.

The first dealership we went to was a small, sketchy dealer who made us feel completely taken advantage of. This dealership worked with us and made it an easy, stress free transaction. I thought the only way we would be able to get a car loan was if we got an awful car with an outrageous interest rate (without a co-signer). I'm so thankful that we were able to get this loan ourselves!

I'm updating in case anyone else is having difficulties. I had no idea how to even deal with a car dealership since we had always paid cash for our cars! I still hate that we have such a high payment but we plan to pay this loan off ASAP! Now we just need to get that chapter 7 rolling!

[jetsfan2010]

Glad it all worked out

[sunshinepa]

Good for you. Now move on with the BK by consulting some attorneys if you are truly going to file. Get headed to that fresh start!