If you filed bankruptcy in the last few years and need to purchase a car to get you back and forth to work, then you face a hurdle in trying to obtain financing. While financing a car is a challenge with a bad credit score, thanks to "buy here pay here" used car dealerships, it is no longer impossible for you to buy a vehicle on credit.
Here are some tips to help you get the best deal when buying your next car from a buy here pay here automotive dealership:
Research the Value of the Vehicle You are Interested in Purchasing
If you find a car that you are interested in purchasing, take the time to conduct some research so that you know what the current market value is for the vehicle. This research will help you to negotiate a price and identify vehicles that are over-priced.
Be Absolutely Sure that You Can Make the Monthly Payments
When you finance your vehicle through a traditional auto lender, they will often work with you if you need to make a payment late. This is often not the case for a buy here pay here dealership. Before you sign on the dotted line to accept your car loan, you need to make absolutely sure that you will be able to pay each and every payment on time month after month. If you miss a payment, then the dealership will repossess your car and further damage your credit rating.
Understand the Interest Rate You will Pay for Financing
By law, the auto dealership is required to disclose to you the interest rate that you will be paying on your car loan. If the sales person tells you that you can later refinance to a lower interest rate, then you should be very skeptical. Unless your bankruptcy has almost aged off of your credit report, refinancing for a lower rate will be nearly impossible for you to actually accomplish.
Consider Alternative Inexpensive Vehicles from Private Sellers
Finally, since you will pay a higher interest rate if you finance a car post-bankruptcy due to your low credit score and a higher risk of defaulting on your loan, consider saving up a couple of car payments or use your down payment money to purchase an inexpensive car from a private seller. You can use this cheaper car to get back and forth to work while you save up to buy a nicer vehicle and build your credit score back up to obtain a lower interest rate if you choose to finance at a later date. Contact a dealership, such as 1 Touchdown City Pre Owned, for more information.