Used car after discharge

[ssboy81]

Have anybody on here bought a new or used car after dis acharge? If so whats the avg interest rate after chapter 7? And what is it base on?

[justbroke]

Your interest rate will be tied to your current FICO score and there will be some "penalty" for the bankruptcy... but it can be done! I refinanced my 23.99% redemption loan 3 months after discharge to a 12% loan. Again, your mileage may vary (pun intended).

Interest rates are entirely based on your score. However, most auto lenders use the "enhanced auto score" from FICO. This score tends to be "higher" than your regular FICO score if you have perfect auto loan payment history. If you defaulted or were late on auto loan payments, this will affect your auto score.

No one can tell you what the average rate is. It depends on too many factors including what bank you are using, your score, the seasoning of your discharge/close, your down payment, the type of vehicle, and even the make/model.

[btbeme]

You wouldn't believe the deals my brother-in-law pounds out. He is a sales manager at a new car dealership in CA. Probably half of his clients are BK (or should be) and are looking for used vehicles. Problem is, the used car market is so strong right now that the price gap between new and used is very small. Normally, you would expect to pay a higher interest rate for a used car...but right now, he has been able to get people into new vehicles, dependent more on down payment rather than credit scores, at or close to the dealer's best rates.

It's an interesting dynamic. But cash is king, so methinks the better bet is to work toward a larger down payment and strong-arming a dealership for their best rates by inching up the up-front cash you are willing to offer.

[ssboy81]

thanks

[jetsfan2010]

cash is always king, and from present day experience, since i filed my 7 i have received 3-4 offers in the mail a week from dealerships all over trying to get me to finance a car even before the bk has discharged. I bought a car prior to going into a 7, and while I got hit pretty bad on the rate, I am gonna ride it out and pay it off in less than a year.

[october99]

I am in the midst of trading cars. Well actually I sold mine outright and now I'm buying a used one. I had a lot of trouble dealing with the different dealerships and their financing so I finally went with the Capital One blank check program. I got approved right away at 10.7% for something that is newer than 2004 and lower than 70k miles. Depending on how much they approve, it can be a tough set a parameters but doable.

I think it is really easy for dealers to talk people into new cars right now with the lower interest rates (even post-bk) and competitive prices of course, but one of the other factors is how much better gas mileage some of these new vehicles are getting. It's incredible. I don't drive much so I'm going with used for now. Once the credit improves I might trade again for something newer and better gas mileage.

Good luck and don't be afraid to just tell them what's up when you are shopping.

[LadyInTheRed]

but one of the other factors is how much better gas mileage some of these new vehicles are getting. It's incredible.

No Kidding! I bought a 2010 car with the just about the best gas mileage you can get without shelling out the bucks for a hybrid. I am already envious of the gas mileage coming out in newer gas operated models.

[sassiebaz]

It's amazing how many offers we have gotten in the mail since we filed. However, since my husband is in that line of work, he knows all too well our rate is going to be outrageous...and we have multiple BK's so that makes it even worse! We plan on waiting six months, get a secured CC and hopefully start helping our scores go up. Then cash down. We need 3 vehicles since our son will be driving soon!

[ssboy81]

Thank i may go with capital one also

[ssboy81]

October99 how did you get approved for on the loan