Bad Credit - Lease ends in April

[RW3]

Hi all,

I was discharged from BK in July of 2009. My wife's credit score and mine are in the 590 range (still high risk).

We just paid off her car and have the title. But we have a newer minivan (2007) that we leased and has to be turned in the month of April 2010.

Not sure what type of options are out there for us, obviously leasing is out of the question, but we'd like to get a newer used car (perhaps 1 or 2 years old), minivan or SUV (we have 2 kids).

We've been looking a lot at carmax, but really aren't sure what kids of financing we can get for the amount we'll need to purchase the car we have in mind.

We were paying 373 a month for the lease we are turning in, and we were paying 313 a month for the car we just paid off. So we were paying almost 700 per month in car payments. I figure we could definitely afford a payment of around $350 to $450 a month.

What are my options?

[tallulah46]

I just called around to different car dealers (not the buy here pay here kind) and told them my situation and if they were bankruptcy friendly...Ford ended up being my best bet, since they seem to be more bankruptcy friendly than some of the others. I didn't want to get an auto loan online and was told as long as I had never defaulted on a previous car loan and had no repossessions then I was o'k. Ended up with a 19,000 dollar loan at 11% which I can get to a lower rate after 1 year of on time payments. My payments are around 385 per month, which is perfect for me and I have no other credit card bills, just my car and student loans. Be HONEST up front and know your fico scores and they were all really friendly and helpful....Good Luck in your car search...

[RW3]

I got a rate of 19% from Carmax with a down payment of $2300 for a $22,300 Jeep Commander. That was for a 72 month term.

We are slowly repairing our credit, so I'm sure we can refinance into a better rate in a year or two.

Any other places I should check out for auto financing that are bad credit "friendly"?

Thanks very much.

[RW3]

Capital One denied me and forwarded my application over to Roadloans.

I also applied on myautoloan.com, no word yet.

[tallulah46]

Have you tried your local Ford, Chrysler or GM dealers? Notice I'm not mentioning other makers, but that is my preference...I did try Subaru, but they up front told me to wait at least one year. Honestly, just call your nearest dealer where they have a vehicle type you are interested in and see what they can do. I wanted a slightly used Mustang and ended getting approved through 3 different dealers. You just might get a better interest rate than 19%.....Good Luck to you....

[CC79]

Just today I finalized a deal at my Chevy dealership to buy my leased car. They were very kind and worked out a deal with Capital One at 13.54% for 60 months with only 1000 down. My payment is only $325 ($9 more than my lease payment) and that includes gap insurance. I opted for another $87 a month for 12 months for a 4 year, 0 deductible warranty since it's more than 36 months old. I don't want any huge repair even though the car has only 21,000 miles and I only plan to keep it for 2 years. I can transfer the plan or get a prorated refund when I sell it. I can finance a new car through a pension loan in 2 years and sell this car to pay the loan balance.
My advice is to go to the dealership.I walked in and told the salesman my situation and he took me to the general manager who, with the loan officer, arranged everything and were extremely nice and went out of their way to help. BTW my discharge was 3 1/2 months ago.

[aces67]

I got a rate of 19% from Carmax with a down payment of $2300 for a $22,300 Jeep Commander. That was for a 72 month term.

We are slowly repairing our credit, so I'm sure we can refinance into a better rate in a year or two.

Any other places I should check out for auto financing that are bad credit "friendly"?

Thanks very much.

Just be careful with this. Yes you can refinance later for a lower rate but since your interest rate is so high to begin with your going to be upside down on your loan VERY QUICKLY which will make it hard to refinance unless you have more money to put down.