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Financing A Newer Car After BK13 Discharge

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    Financing A Newer Car After BK13 Discharge

    My husband just had another ( mercifully) much smaller emergency car bill, so we are hopeful we will be able to ditch my 16 year old , 200K + car and obtain a much nicer newer car after the last payment is made in early 2022. How long will we have to wait to get decent interest rates? Is it like obtaining a FHA loan where you have to wait two years or more?
    One thing we have considered is buying a car with cash under a warranty once we have sold our house and hopefully gotten a decent profit (say $60k +, if we have some luck for a change! ) We are wary of used cars since we have always been able to finance a new car and drive it for 14+ years.
    Does any one have suggestions or advice?
    Thanks all!

    #2
    Have you been able to rebuild your credit during the 13 so far? In most districts you cannot incur a lot of debt and of course you shouldn't incur debt at all, but nothing says you can't have credit available and choose not to incur more than $5 worth per month and pay-in-full every month. Don't pay any attention to the advice to maintain around 8.9% utilization because you're not really able to incur debt safely until you are out of the 13.

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      #3
      I was able to purchase a new truck with 0.0% a couple of days after I got my discharge. My wife and I make decent money and I have a good history with Ford Motor Credit so that helped matters. Rates are really low right now.

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        #4
        If you never had any repossession, getting financing might be easy. Auto dealers & financing companies relies heavily on your enhance fico 8 score for automobiles

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          #5
          I won't find out until 2023 what it's like to finance a car. It's good to hear it's fairly easy if you have a decent income and no history or repossession.

          What I have thought about is what kind of car we want to get. My husband will be near retirement age and has always had a hand me down car. He would like to have an at least "new to him" car during his lifetime! After seeing my daughter just buy a car by knowing what she wanted and reading ads on websites she found it quite easily. My plan now is to get him a smaller car with the rear back up camera. When the time comes I will look for newer used cars. We also fall in the category of buying new and driving the car into the ground, though we have bought two "used" cars. My daughter's car was only used by dealership and was well taken care of and she got a great warranty.

          I think researching and planning ahead will help a lot.

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            #6
            Hey Carmella, I'm a bit of a car geek having spent much of my professional career working for the autos. The good news for you come 2023 is literally all cars roughly five years old or newer will sport a backup camera, regardless of size, model, or trim level as the NHTSA mandated all new cars much include backup cameras as of May 2018.

            Regarding the "buy new versus used" debate; given y'all habitually drive your cars into the ground, the cost per mile, when spread over a few hundreds thousand miles, will be relatively minor. Things to keep in mind:
            • New cars typically qualify for better financing rates, so even though the purchase price is higher, the net monthly debt service cost is typically narrowed.
            • While the newer car will cost more per month, in theory at least, you will have more years of service from the vehicle once the debt is paid off, so you may well be able to get say, 200,000 miles out of a new car where you may only be able to get 150,000 miles out of a used one, and that initial debt service cost can be amortized out over more miles/years of service.
            • New car warranties are bumper to bumper and zero cost; many (most? all?) used car warranties come with deductibles and mileage limits and such; ain't nuthin' like a new car warranty.
            Do you have any specific models you're thinking about for your 2023 purchase?
            Latent car nut.

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              #7
              Good points shipo We have in the past bought a new car at 0% interest which made it cheaper than a used car, plus it was the end of the model year so the car was new/never owned, but it was the older model they needed to get off the lot!

              We have been going to the same dealership and they have been good to us and the service dept has gone out of their way at times. Some of the same mechanics are there since 2002! It was a Saturn dealership at the time, when Saturn went out the owner chose to go with Mitsubishi. Both cars we have now are Mitsubishi. My husband has trouble backing up the Outlander Sport from our driveway. I have the compact Mirage which really is a "cheap" car, but serves the purpose, at first it felt like I was driving a toy. He likes the Mirage. I am not sure if we would go with a Mirage or compact or go a step up, but a sedan for him. I will probably keep my car for a while, but get a new or new to me a few years after he gets his car. I don't remember when his my car will be paid off, it might be 2024 since we got a LONG loan and rolled over my other car loan into it because my car met an untimely death. Maybe at the end of the model year 2023 we can get a good deal on a new car for my husband.

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                #8
                Carmella, I would imagine by late 2023 you would easily be able to find another Outlander for your husband for reasonable money, new, dealer demo (sold as a new car), or lightly used; in your case, I'd look for a dealer demo.

                In your case, if you're looking for a sedan, then it looks like shopping Mitsubishi is going to be a non-starter as the only sedan they now offer is the Mirage G4; however, if something like a small crossover, say the Eclipse Cross or the Outlander Sport (much smaller than the standard Outlander) are options, then you'll be in good shape. If none of those are palatable as next car choices, then you might want to start looking at offerings from other manufacturers now to get a feel for what you'd like when the time comes.
                Latent car nut.

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                  #9
                  Thanks to all who answered my original post! Probably the costliest mistake we made was not getting a second "new car payment " before filing. We are having even more problems with my 16 year old car as I write this. (I will start a new topic post later as we learn more about what is going on.)
                  Yes, our scores when we last checked were near 700 so we may have nothing to worry about in 2022 ,provided we can complete this BK13 and get to a discharge and final closing!

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                    #10
                    Barbisi I have a feeling you will get there and move on to better things!

                    Looks like my husband will want something smaller than the Outlander at this point. He's driving the old Outlander and it's ok, but next time he'd prefer smaller and when I upgrade I will go larger.

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                      #11
                      Thank you Carmella!
                      I think we may be done with Nissan Sentra (we have two at the moment!)
                      I have heard really negative comments about the Nissan brand as of late, so I believe when we are able to replace my rickety 2005 Sentra, we will find another brand (maybe Subaru?) to replace it. There is little point though,
                      in looking at new cars now when we are still mired deep in BK13.
                      Good luck when you guys get your next cars!

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