Buying a car with BAD credit

[Forthebirds]

It looks like we may have to file Ch 13...long story for another time, but my question is, how difficult is it to get an auto loan with trashed credit? My credit is out of the question as most debt is in my name and one is in collections (stopped paying in Oct). DH has 1 CC to his name and student loans which are paid up. His CC was last paid in Oct or Nov. One of our cars is 10 years old and is acting up. If we could do Ch 7 we could live with this for a couple more years, but things look different with a possible 13 on the horizon. Thanks!

Eta: sorry, just found a long thread on the same topic in the 13 folder. Didn't see it when I searched. Disregard!

[ccmisery]

I am in the same boat, lawyer told me to get a new car and keep it under $490 or something like that.

If you go here:

http://www.myfico.com/HelpCenter/Autos/Purchasing_New_Car.aspx

You can estimate what your payments will be based on your score, I know mine is trashed because I fell behind on my credit card payments. If your pre 90 days you are borderline, 6 months you can assume your credit score is probably beneath a 500.

You might have more luck having both of your credit scores run when making a purchase? I heard about some of these places that give loans to people with bad credit, but I heard the interest rates are over 20% and actually damages your credit report further.

Based on my rough estimates with no money down average cost of a car I could afford would be $18K or so new, lower would be better. If you either a 7 or 13, it will be a while before you can even get a loan unless you get a provision in your bankruptcy to have one during the duration, talk to a lawyer it is common.

[paulsk]

ccmisery, were you able to the loan? I remember you tried last month. I am going to give it another shot this week.

[AngelinaCat]

We are attempting to secure a loan through our CU for 7K to purchase a used truck for our G-Daughter. The original truck we were looking at is now gone, but we are continuing to look. She needs a good, reliable truck for her produce business she is attempting to get into.

We will keep you posted as to how it goes....





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[Forthebirds]

Decided against the car for now...will file Ch 7 after all. We will still need a newer car in the near future, so thanks for the info!

[keepmine]

Post bk, try the blank check program from Capitol 1.

[ccmisery]

ccmisery, were you able to the loan? I remember you tried last month. I am going to give it another shot this week.

Not yet, still debating a purchase. Looking at cars under $20,000 since most estimates place those in the max purchase monthly payment. Have to decide soon.

[pinkpeanut01]

I can't tell if you still want experiences or not, but I'll share mine in case you or someone else can benefit from it. We ended up needing a replacement car with totally trashed credit. I wasn't working, so it was all on him and his income. My husband's score at the time was something like 540, and he hadn't paid on credit cards and had a charged off vehicle loan. We were still able to get financing through Santander. We are surrendering that car now that we are discharged. (Toyota Financial has approved us post-bk.) I am so happy to be getting rid of Santander just so I can sleep at night, as there are so many horror stories out there about them. But yes, DH was able to buy a car with financing from Santander despite the number lates on his credit and having been at a new job for only 1 week after a few months on unemployment. Interest rate was 10% on a $7500 loan. The finance manager at the dealership was able to arrange it for us with better terms than we had found online on our own. Good luck.

[ccmisery]

I can't tell if you still want experiences or not, but I'll share mine in case you or someone else can benefit from it. We ended up needing a replacement car with totally trashed credit. I wasn't working, so it was all on him and his income. My husband's score at the time was something like 540, and he hadn't paid on credit cards and had a charged off vehicle loan. We were still able to get financing through Santander. We are surrendering that car now that we are discharged. (Toyota Financial has approved us post-bk.) I am so happy to be getting rid of Santander just so I can sleep at night, as there are so many horror stories out there about them. But yes, DH was able to buy a car with financing from Santander despite the number lates on his credit and having been at a new job for only 1 week after a few months on unemployment. Interest rate was 10% on a $7500 loan. The finance manager at the dealership was able to arrange it for us with better terms than we had found online on our own. Good luck.

What was the interest rate with Santander? I am hoping to avoid any of the bad credit score lenders, I heard too many horror stories.

[ccmisery]

Amazingly I purchased a new car the other day, got 9.99% APR with a 520 Fico, through Ford Credit. I have no idea how I ended up getting this rate? The dealer tried several other lenders, none would even approve me without a even bigger down payment, Satander was one of them. It probably helped that I have another leased car with Ford Credit and am up to date on my payments. I was able to keep the payments under $496/month which is the max. you are allowed to claim per ownership costs, you get twice that for two cars so both of my cars are under that amount.

If anyone is is interested, I found this for Ownership costs, lawyer told me about it.

http://www.justice.gov/ust/eo/bapcpa/20101101/bci_data/IRS_Trans_Exp_Stds_SO.htm

I looked at used cars but could not get financing and the APR's were higher even if I could. I just hope that everything else goes smooth during the filing and I have no issues with this purchase and filing, I still have not finalized whether I will be a 7 or 13?

[paulsk]

ccmisery, Congratulations. I got a loan with VW Credit and ended up getting 7.75, I have not missed any payments yet, and that helped. I was nervous getting a new car because of what the trustee would think, but i had no choice in the end, no bank would lend me money for a used car. Sad but true. I would have settled for a 3 year old car.

[AngelinaCat]

I promised I would update our situation. Here is a link to the thread that 'Hub started on this subject:

http://www.bkforum.com/showthread.php?79510-Rebuilding-Credit-Why&p=595265&highlight=#post595265

[ccmisery]

ccmisery, Congratulations. I got a loan with VW Credit and ended up getting 7.75, I have not missed any payments yet, and that helped. I was nervous getting a new car because of what the trustee would think, but i had no choice in the end, no bank would lend me money for a used car. Sad but true. I would have settled for a 3 year old car.

That's a good rate you got, I had to put down $4K in order to get it though. Everything I read said that I would be in the 15 to 25% range for APR. I did not check with too many dealers, just one I dealt with before on my current leased car. The only thing with Ford Credit is, you have to reaffirm the loan(s) otherwise they will repo your car even if your current on the payments.

I honestly don't think I would even be able to get a used car, because financing tends to be higher on used vs new. I don't know what the trustee will think? I was just told to keep my payment under $496/month and do not buy a luxury brand. I did not get a base model either, so in the end it worked out just hope there are no issues during the process.

[AngelinaCat]

We have been approved for the loan from the CU, by the way. We just have chosen not to utilize it at this time.

[Floridagail]

Ford Motor Credit will not let you pay and ride thru, when you file bankrptcy, Hubby just got the letter from Ford, He have 60 days to sign reaffirm or they will assume we want to surrender the car. We are current on our payments and assumed we would just keep paying. Our attorney recommended we retain on filing, but not reaffirm. So we will be letting the car go.