Bankruptcy and Vehicle Financing

asafonov

I have considered a used car, but I don't want a situation where I'm making car payments AND having repair costs. A warranty is one reason I want a new car.

You probably considered this, but: while Mazda's 4/50k B2B warranty is better than the basic 3/36k one that, say, Honda and Chevrolet offer, if you have a 60 month loan, it still stretches past the car's warranty.

As I said before, I CAN afford the payments at 19%. I just want to make sure there isn't anything better than that rate available to me. Unfortunately, it doesn't seem like there is.

If you have to pay 19% or so at this time, why not improve your credit score by paying off a much smaller loan on a used car? The problems with refinancing are: (1) on used cars, rates are higher than on the new ones, and (2) you will be refinancing at the rates current 2 years from now, which may be higher that today's rates.

bobst

Allfire, don't borrow money at 19%.

If you can't get a good loan rate because of your credit rating, then buy a cheap car for cash.

allfiredup

Good news! I've been working with another dealer via email and he sent me a email stating that I'd been approved at 11.99%. Being the skeptic that I am, I called Ford Credit (I guess they do own Mazda) and they verified that I had in fact been approved.

Much more palatable than 19%! I'm happy to say the least.

rroyce10

..... 11.9%....? .. thats a about the going rate with someone in your shoes .. you also might consider going a shorter term .. I bet ya 60 months might get ya 8.9% ...

... 19%.?? .. maybe if you're Tookie Williams .. ooop's, he won't be needing any credit after last night .. never mind.



Terry.

allfiredup

I won't even touch that last comment.

I talked to the dealer and the credit company about a 60 month term, but they said it was the same 11.99% rate. If that's the case, I'll just pay an extra $45 toward the principal every month and pay it off in 60 months.

devond

I am having the hardest time obtaining financing. I know my credit isn't good... About 1.5 years ago I was in a car accident and found out that a lot of my medical bills weren't covered. I was more concerned about getting/paying for the med. procedures at the time then about my credit cards falling behind. When they fell behind I couldn't get them back to current and they ended up charging off (after I tried to negotiate the payments and what not - I was trying to be responsible!) It's not that I just didn't WANT to pay them, I couldn't at the time. I have since paid them off and closed them but they still went to collection. ANYWAYS, I am trying to obtain financing for a car now and everyone is turning me down! I make pretty decent money for a 23 year old (about $7,000/month) and have minimal expenses (about $700/month). I have enough money saved for a small downpayment but I was looking at a $15,000 car and the financing guy told me I needed $10,000 down. If i had $10,000 I would just pay cash for a $10,000 car DUH! Does anyone have any ideas?? I am using my fiances car now and I just want my own car and I want the chance to prove that I AM credit worthy and I do want to pay my bills on time! (fyi, I have paid my cell phone bill and utility bills on time for the past year if that can count as alt. credit). If anyone can help me or if anyone can do anything for me, I am obviously willing to take a double digit interst rate for the chance to own my own car on my own without my father having to co-sign which is not an option. Oh also, I had a Mazda American loan in 2003-2005 (22 mos) which was paid on time every payment. PLEASE HELP!

jb_turner

Save your money for 2 months or purchase a Civic.

cadillacmike

Why do you think that loans suck??? My two car loans are both below 5% - I can't even invoke the SSCRA to lower them to 6% because they are already below that :surprise:
Only the top 0.1% of americans can afford to buy a house with all cash - and they won't do it, because of the fed mortgage interest deduction, loans don't suck, ludicrous high rate loans suck :mad:

cadillacmike

If you are netting $6,300.00 per month, then in two months, you'll have $12,600, so what's the problem?

Unless those figures weren't accurate.....

bobst

"ludicrous high rate loans suck"

Not for the bank, and not for people who have savings in a bank.

cadillacmike

Are you a banker??? Having savings in a bank doesn't mean you'll get a higher rate on your deposits either.

6ftladycop

I tried to find an answer to this, but could not. I hope you guys have one. I have always had good credit. I leased a vehicle 2 years ago during this time of having good credit. A year ago I was told that my child has autism and this has caused me a great deal of financial issues which became so hard for me that I filed a chapter 13 because I wanted to at lease pay my debtors back some of their money.

What will happen to my lease agreement now that I have done this? Its been a year and I have been paying everybody back, but I never put the leased vehicle under the chapter 13. When my lease agreement is up 1 year from now, will they allow me to lease another vehicle knowing that during my agreement, I filed chapter 13 and will they eventually be wanting their car back during the time I have it now?

Since I know my credit has been effected, what can I expect the dealerships to tell me when I come to the end of my lease agreement? I worry that they will take the car and I will not have anyway to get myself or my autistic daughter to various necessary places because of her condition.

If any of you have some suggestions or if you have gone through this before, please let me know. :sick:

I was living from paycheck to paycheck

joel0622

If you are actively in a 13 when the lease terms you will have a hard time leasing another vehicle. To my knowledge none of the captives will put some one on the books while they are in a 13. You best case scenario will be to buy out the lease you have through a special finance company at high rate of interest.

6ftladycop

Can I buy out the vehicle through a financing company before the lease terminates or do I have to wait until that exact day. Also someone ask me just now does this apply to folks with bad credit as well even if you did not file bankruptcy?

joel0622

You can buy your lease out at any time. Its just a matter of finding a lender who is willing to take the risk.

The reason they don't like to do it is because historically people in Chapt 13's stayed in them for about 6 months, said to hell with this, and filed for Chapter 7.

With the new bankruptcy laws I don't know if it is still possible.

I think that you are probably going to end up shopping on note lots for awhile unless you or the dealer can find a lender sympathetic to your situation. But even if they say yes you are going have a interest rate in the 20-25% range.

Allot of note lots charge no interest on there accounts. I don't want to tell you how to spend your money but I know what I would do. I would save a $1000 and head to a nice note lot.

Karen_S

A national newspaper is looking to speak to consumers who have had a tougher time getting a car loan recently. Please respond no later than Feb. 15 with your daytime contact information to Chintan Talati at ctalati@edmunds.com.

Karen_S

A reporter from a large daily newspaper hopes to speak with consumers who have had difficulty obtaining credit for a vehicle purchase. If you’ve had difficulty, please respond to ctalati@edmunds.com with your daytime contact information no later than Friday, April 18, 2008.

Karen_S

A reporter wants to interview people who have been turned down for a loan, surprised by high interest rates or otherwise run into the effects of the tightened credit market while shopping for a car. If this describes your situation, please respond to jfallon@edmunds.com with your daytime contact information no later than Wednesday, April 23, 2008.

donnah

Update on my comments:

Last November I was able to purchase a 2007 Hyundai Azera Limited, after approval by the trustee. My monthly car payment was $100 less/month. I was able to finance the vehicle for 1.9% with no problem. I just ran my credit report and my average credit rating is 660. The bankruptcy is in the process of being discharged. So anyone else out there that had to file Ch. 13, know that you can work with your attorney and trustee when there is a reasonable need for you to make a vehicle change during the bankruptcy period. All in all, it worked out great for me, and for some reason my credit rating is pretty good right now.

Karen_S

A reporter with a large national newspaper is interested in talking with consumers about their experience during this economic downturn and if they might have lost or had their car repossessed. If oyu are in this situation,, please contact Chintan Talati at ctalati@edmunds.com no later than Friday, May 9.

rogg2148

Is it possible to lease a vehicle while in bankruptcy? I need to get a car, but no lenders will work with me because I still have about 3 more years to go.

Kirstie_H

The issue is that you usually have to have a higher credit score in order to lease a vehicle than you do to buy a vehicle.

rogg2148

What about having a co-signer with good credit?

dtownfb

Do you really think someone woull co-sign a loan for you while you are still in bankruptcy? Scratch that question, here's another for you: Do you really think it is responsible to ask someone to co-sign for you while you are still in bankruptcy?

How about buying a used car? There are plenty of cheap used cars out there that will last 3 years.

isellhondas

A co-signer won't help you.

As long as your name is on that application your BK will stop a loan from happening.

rexwagon

In the currnt credit enviorment is it possible to get a car loan with a recent bankruptcy discharge? I am interested in purchasing a 2005ish Volvo XC90 or Toyota Sequioa. I have a trade in worth $3-4k and have $3k to put down. Hoping to find a 3rd row suv for around $15k.

joel0622

In the currnt credit enviorment is it possible to get a car loan with a recent bankruptcy discharge?

Yes, especially with the down payment you have.

oldfarmer50

Do any of you sales people expect to see an increase in the number of people with a Bankruptcy history being able to purchase a new car using the regular mfg. rebates and the cash for clunker rebates combined to make a substantial down payment.

What percentage of the purchase price would there have to be to make such a thing possible?

joel0622

Most banks especially the special finance banks don't consider rebates money down any more. Allot of them will adjust the cost the amount of the rebate. Ford credit changed there scoring system also to not weigh rebates very heavy.

volvomax

Lenders right now are very leery of giving a loan to anyone w/ a BK.
Unless people in question put up a lot of cash and are taking relatively small loans I just don't see it happening.

zyaaaaa

I'm hesitant to post here... seems like a tough crowd. But I have a few questions nonetheless so I'll take my chances.

I filed individual Ch7 a couple of years ago and have been working to rebuild my credit. My wife had both car loans in her name at the time (and still does) so they were not impacted. We are looking to lower our payments by trading in both cars for leases in the next year, and to then use that money to pay off other debts that remain. Here are my questions.

Do I stand a chance of getting approved in a joint application with her? Her credit qualifies for Tier 1 for the manufacturer lenders we are considering. My credit is in the low 6s and the only negative ever was the Ch 7. I have prior auto loan history that was paid as agreed/closed (supposedly helps with auto-enhanced scores).

Would it make sense to try to put both names on both loans to help build credit faster?

Would doing this drop us from the tier 1 rates?

I'm really looking for input from individuals with similar experience or dealer/finance experience. Thanks for you time.