Filing bankruptcy, in many cases, can be considered to be a fresh start to a healthier financial future. Once the process is through, it is time to rebuild and spark a positive change in your finances. For some, this may mean going back to work, finding a new home or buying a new car. It may not be easy to get these things done, as having bankruptcy on your credit can impact your ability to secure loans. For those who need a vehicle to work, securing an auto loan or modifying an existing loan can be tricky, but possible. Here are some tips to help you get back on the road.
First Things First
1. Question yourself. Is buying a vehicle a top priority? Is not having a vehicle stopping you from working? By this time having already filed bankruptcy, you should have a clear understanding of the difference between wants and needs. While it may be convenient to have your own vehicle, you should consider all transportation options available to you. This may mean public transportation, carpooling, lift services, etc. Is a vehicle an absolute necessity in your life?
2. Plan it out. If you answered yes to any of the questions above, you should now start thinking about what kind of vehicle is best suitable for you. Should you buy a new car or a used car? How much are you willing to put down? Creating a budget and analyzing your income and expenses are the best way to know what you can afford. As most new cars come with shiny new high tech features, older cars can still be reliable and are reducing in price as the years go on. Be sure to factor in future costs like gas, maintenance, car parts, insurance, etc. Take the extra time to learn how auto loans work so you can avoid getting scammed into bad loans. Plan ahead, having a vehicle is a never ending expense.
Get the Car Moving
3. Organize and rebuild. It is very important to have a good credit rating, as this is one of the main factors that affect your loan. If you have no credit history or your credit score is low, you can start by getting a secured credit card and paying the total balances each month on time or pay down as much existing debt as you can while saving. These things may be easier said than done, but getting stuck in a high interest loan with bad credit can have much more damaging consequences in the long run. It’s very important to focus on cutting out unnecessary spending and allocating any savings towards a downpayment.
4. Shop around. Once you have enough saved, gather your important documents (credit report, discharge papers, etc.) hit the dealers and see what’s out there. Remember, if a deal sounds too good to be true, it most likely is. You may be able to find a dealer that will work with post bankruptcy filers but be wary of dishonest dealerships that may try to swindle you into bad loans because of your credit history. Negotiate as much as you can and try to cut down on any extras they may try to sell you on. If you are bad at negotiating, bring a friend or family member that can get you a better deal.
Although it may seem like another upward battle after having to go bankruptcy and rebuild, it is very important to keep a positive mindset. By organizing your priorities and shopping around before spending, you can ensure a much healthier financial future for yourself.
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