Dye Autos Denver Area Truck and Automotive Blog
A good credit history is important, especially when buying a vehicle. But life happens and that often affects your credit. If you’ve had a bankruptcy, live in Denver, Wheat Ridge, or the surrounding areas, and you find yourself wondering what your options are, you’ve come to the right place. It is possible to buy a car after bankruptcy.
Most cases of bankruptcy aren’t caused by reckless spending but by financial hardship, and many are lower-income individuals who simply can’t afford to deal with unexpected major expenses such as job loss or medical bills.
At DYE Autos, we’ve worked with hundreds of customers here in the Denver – Wheat Ridge area who were credit challenged and we understand how tough it can be to buy a car after bankruptcy. Lenders do lend to people who’ve been through it.
Here are 5 tips to help you navigate your way to getting the car you need.
Your situation is not hopeless
Your situation doesn’t have to be grim. If you’ve had a good track record paying previous car loans or your financial issues stemmed from uncontrollable events, you may very well be able to finance your vehicle.
The Great Recession caused many people to lose their job and eventually make less than they did. Medical bills, divorce and other unforeseen circumstances happen. You’re not alone.
Shop around for a loan just as you would if you had perfect credit. Too many customers come to the table ill-equipped to discuss their credit score and available options…and that can get you in trouble.
While DYE Autos has a long track record of helping people buy a car after bankruptcy, there are many dealers who aren’t set up for it. Do your homework.
Look for the lowest interest rate, but be realistic
Consumers face several different negotiations when purchasing a car: the price to pay for the car, the value of the trade-in, the financing and whether to purchase additional products like extended warranties and other insurance products.
When you’re just emerging from bankruptcy, you’re likely to agree with just about anything a dealer or bank will give you.
Instead of taking the first offer you get, shop around. Many consumers have gone through what you’re going through. Get yourself the best rate possible but be realistic and know that your situation is temporary. You can build your credit back up and get a better rate in the future.
Keep your expectations low on the type of vehicle
One of the important components when you’re shopping for a car after bankruptcy is to keep your expectations in check. Don’t expect to drive away with more than you can handle. In the lender’s eyes, you’re a new driver just learning how to navigate your new credit worthiness.
Everyone wants a nice car and there are plenty of nice cars that are affordable. At DYE Autos, we work with lenders everyday and our customers get the guidance they need to find the right vehicle.
Do your homework on which dealership to work with
The lack of transparency has chipped away at consumer confidence in the auto finance market. You need to find the right kind of dealer who can handle your type of loan.
A dealer with a lack of experience and skills in working with people who need to buy a car after bankruptcy can very often cost the consumer hundreds of dollars.
Choose to work with a dealership that has a proven track record with helping people buy a car after bankruptcy. Here are the questions we want our customers to ask:
- How long have you been working with customers that have credit issues?
- How much interest will I be paying over the life of the loan?
- Is there a prepayment penalty? (a fee if you pay the loan of quicker)
- Do you have options for me so I can refinance later, after I’ve proven my credit worthiness?
These tips will get you on the road to shopping for the right car, the right loan and the right dealership.Read More
The topic our customers ask about most often is used car financing.
We know used car financing is complicated. Just remember that it’s ok to learn as you go. Here are a few tips to get you started on the right track.
1. Do I need to make a down payment?
A down payment isn’t always required for purchase, but it’s definitely a good idea.
- It will reduce the amount you’ll need to borrow.
- It improves your chances of loan approval.
- You may get better terms with a down payment.
- It will reduce your monthly payment.
Your trade-in vehicle can serve as a down payment. If you still owe on that car loan, the amount of “equity” you have can serve as your down payment. “Equity” is the difference between your trade-in’s loan payoff amount and the actual cash value of your car.
Depending whether you have a trade-in or not, and if you can swing it, any additional down payment – even a few hundred dollars – has a very positive effect in the long term.
2. Can I get approved if I have bad or damaged credit?
There are car loans for people with bad or damaged credit, but you need to be careful when shopping.
Auto loan seekers with bad or damaged credit should enter the car loan process knowing they’ll pay a higher rate than someone with better credit. But don’t let that discourage you.
At DYE Autos, we successfully provide car loan options to customers with many different credit profiles. We have over 70 years experience and we’ll help you!
3. Why does a car’s age and mileage affect my financing options?
In the world of used cars, two factors have a major effect on pricing: mileage and age.
It’s no surprise that higher-mileage cars and trucks carry more affordable price tags, however, many car loan companies may be unwilling to offer terms on older vehicles. There’s more risk involved and that equates to higher car loan interest rates.
4. How much should my payment be?
Everybody’s car buying budget is different but if you’re planning on financing a car or truck, your monthly payment is always a consideration.
As a general rule, your car payment should not exceed 20% of your take-home pay. This rule should include all financed vehicles in your household, whether you have one or ten cars in your garage.
5. How much car can I afford?
It’s never good to just guess at what car you can afford. It’s too easy to get caught up in the excitement, and then miss important details.
A better approach is to make the best choice for YOU so that you don’t end up saddled with a something you can’t afford.
At DYE Autos, we recommend that before picking a random price range that you feel comfortable with, you consider all the factors that contribute to the cost of your vehicle.
- Finance rate and loan term
- Value of your trade-in (if you have one)
- Down payment amount
- Monthly gas and repairs
- Insurance costs
Information is power. Instead of merely picking a price range, you can use an online loan calculator or better yet, give us a call and we’ll help you decide how much you can afford to spend on your next car or truck.
6. Should I get pre-qualified?
Yes, and it’s a good idea!
This fast and easy process lets you choose how much you want to borrow based on the type of vehicle you’re looking for. If you’re interested in used car financing with DYE Autos, click >>>here<<< to get pre-qualified.
One of our helpful finance specialists will contact you to discuss any available financing options, including the amount you’re qualified to finance.Read More