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Can I purchase a car in the event of a Chapter 7 bankruptcy? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our goal is to help you make better financial decisions by providing you with interactive financial calculators and tools that provide objective and original content, by enabling users to conduct research and compare information for free to help you make sound financial decisions. Bankrate has agreements with issuers such as, but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn money The products that appear on this website are provided by companies that compensate us. This compensation could affect how and where products appear on the site, such as for instance, the order in which they be listed within the categories of listing in the event that they are not permitted by law for our loan products, such as mortgages and home equity and other products for home loans. But this compensation does not influence the content we publish or the reviews that appear on this website. We do not include the universe of companies or financial offers that may be open to you. SHARE Maskot/Getty Images
2 min read Published March 31, 2022
Jerry Brown Written Jerry Brown Written by Contributing writer Jerry Brown is a contributing writer for Bankrate. Jerry writes about personal loans, auto loans as well as managing debt. Written by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since late 2021. They are dedicated to helping readers gain confidence to take control of their finances with clear, well-researched facts that break down complicated subjects into digestible pieces. The Bankrate promise
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At Bankrate we are committed to helping you make better financial choices. While we are committed to strict editorial integrity ,
This article may include references to products from our partners. Here's a brief explanation of how we make money . The Bankrate promise
Founded in 1976, Bankrate has a proven track experience of helping customers make informed financial decisions.
We've maintained this reputation for over 40 years by simplifying the process of financial decision-making
process, and gives people confidence about what actions to take next. process and gives people confidence in the next step.
so you can trust you can trust us to put your needs first. Our content is created in the hands of and edited by
They ensure that what we write ensures that everything we publish is accurate, objective and trustworthy. Our loans journalists and editors are focused on the things that consumers care about the most -- the various kinds of loans available, the best rates, the top lenders, how to pay off debt and much more. So you can feel confident when making your decision to invest your money. Editorial integrity
Bankrate has a strict policy , so you can trust that we put your interests first. Our award-winning editors, reporters and editors create honest and accurate content to help you make the right financial choices. Our main principles are that we appreciate your trust. Our goal is to offer readers truthful and impartial information. We have standards for editorial content in place to ensure that happens. Our editors and reporters rigorously check the accuracy of editorial content to ensure the information you're reading is true. We have a strict separation with our advertising partners and the editorial team. Our editorial team doesn't receive direct compensation from our advertisers. Editorial Independence Bankrate's team of editors writes for YOU - the reader. Our aim is to provide you the most accurate advice to aid you in making informed personal financial decisions. We follow strict guidelines for ensuring that editorial content isn't affected by advertisements. Our editorial team is not paid any compensation directly from advertisers and our content is verified to guarantee its accuracy. So whether you're reading an article or reviewing, you can trust that you're getting reliable and dependable information. How we make money
If you have questions about money. Bankrate has the answers. Our experts have been helping you master your money for over four decades. We are constantly striving to provide our readers with the professional advice and tools needed to make it through life's financial journey. Bankrate adheres to a strict code of conduct , which means you can be sure that our content is honest and precise. Our award-winning editors and journalists provide honest and trustworthy content to help you make the best financial choices. Our content produced by our editorial staff is factual, accurate, and not influenced through our sponsors. We're open about how we are able to bring quality content, competitive rates and useful tools for you , by describing how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products andservices or through you clicking certain links posted on our site. This compensation could impact how, where and when products are displayed within the categories of listing, except where prohibited by law for our mortgage home equity, mortgage and other home loan products. Other factors, such as our own website rules and whether the product is available in your area or at your personal credit score can also impact the manner in which products appear on this site. We strive to offer a wide range offers, Bankrate does not include details about every financial or credit product or service. If you file for Chapter 7 bankruptcy, it will be on your credit report for as long as 10 years from the date of the filing. In this time, you might have to purchase a vehicle. And while it is more challenging, you can take out a car loan after bankruptcy. In order to compensate for the greater risk, a lender could be able to charge you a higher interest rate or demand an additional down payment. Do I need to buy a car following bankruptcy? The answer depends on your financial circumstances and transportation needs. The affordability of any car you buy must be within your budget. Be sure to check the price , not just the price on the tag. Transportation If you already have reliable transportation, it could be best to hold off purchasing a car. The interest rate you pay for it will be lower than you would like with bankruptcy still appearing on your credit record. Using cash: Avoiding an auto loan before bankruptcy is removed from your record could be the best choice. By using cash, you can skip the loan completely. Three methods to finance a car with an auto loan after bankruptcy When trying to finance your car using an auto loan after bankruptcy, you might have more difficulty in finding an lender Some will be reluctant to work with you. If you do find an lender willing to allow you to borrow money, it is likely that you aren't eligible for the . 1. Buy-here, pay-here dealerships During the course of your research, you might come across buy-here or pay-here dealerships that do not need credit checks. Even though these dealerships can assist you in the event that you have had bankruptcy, you could end with a bill that is higher than what the car's value. Before you make a decision, do your research and inquire about hidden fees. 2. Credit unions If a , you could try applying to get an auto loan at a credit union. Since credit unions are not-for-profit, member-owned organizations and are member-owned, you could have better chance of getting financing. In addition, you may be able to secure a lower interest rate. 3. Co-signer If these options don't work, another option would be to get someone with good to excellent credit rating to sign an auto loan to you. Before going this route inform the person . If you fail to pay your loan the co-signer will be responsible for the payments, and it could negatively impact their credit. When to purchase a car depends on your financial situation. Although the best time to purchase your car varies depending on your financial circumstances and your personal situation, it is the time when you will get the most favorable deal and the best interest rate. If you wait to see if your credit is improved to buy a car may reduce the interest rate a lender gives you. However, if you aren't waiting and need transportation now, search for the most affordable deal. Due to the epidemic certain car makers were forced to close their plants for months, and saw inventory and sales decrease. If you're in need an automobile, you might need to take advantage of the shortage of new cars. But do your due diligence and avoid buying a car that you cannot afford. In the end, while you may be able to purchase a vehicle in bankruptcy, you must be prepared to pay an additional interest rate in the event you take out the loan. Although the waiting time for your credit to rise can lower your rates but it's not always possible. Examine all of your loan options before taking out the loan. Benefit from dealer incentives and try to avoid dealerships that charge additional fees. Learn more:
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Written by a contributing writer Jerry Brown is a contributing writer for Bankrate. Jerry writes about home equity, personal loans and auto loans and debt management. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since the end of 2021. They are passionate about helping readers gain the confidence to control their finances with clear, well-researched details that cut otherwise complicated topics into digestible pieces.
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