You can buy a car after bankruptcy, but you need to do the work.

Bankruptcy is a tough time in anybody’s life, and afterward, many face the question of how to handle finances moving forward. But everybody needs a car, and fortunately, buying a car after a bankruptcy is easier than you think, provided the dealership is not the first place you go.

Budget And Plan

First of all, it is important to know that you can get a new car with a bankruptcy on your record; it will just take a bit more work than when you had better credit. Before you go car shopping, you should sit down with your budget and look at where a car will fit. What payment will best fit with your income? Are you replacing this car with another car? What is the value of your trade-in? Have a full, complete picture of your finances and what you can afford, and if you have to consult with the court or your bankruptcy attorney, make a point of doing that first so they know what you are planning.

Also, remember that a used car might fit your budget better than a new one, or, potentially, you might consider a lease instead of a purchase, depending on your needs. It is likely that you may have a harder time getting a luxury car than getting a mid-range car, so leave your options open.

Know Your Scores

Nobody wants to look at a credit score after a major financial blow, but it has to happen, for a few reasons. The most basic is that you need to know what dealerships and financial institutions are going to see when you apply for loans or look at cars. But there are also details on which you need to focus.

If, for example, you have made timely car payments even through bankruptcy, that is going to be a point in your favor. Or if you reaffirmed (that is, agreed to continue paying) a car loan after your bankruptcy, that will also help. Look at your credit scores and reports the way an auto loan company would.

With a little research, even those in bankruptcy can buy a car.

Have A Down Payment

Down payments are always good to have for buying a car, but post-bankruptcy purchases need them in particular. Having a down payment, even a modest one, both helps reduce what you will owe on the car and is a presentation of good faith in your purchase. Being able to walk in with a down payment is an announcement that you are financially stable and will stay on top of your payments.

Shop Around

Another important factor is that you need to shop around. There is no shortage of fly-by-night operators and predatory lenders that target people dealing with bankruptcy, and many people assume the first loan offer they get will be the best. Do not fall for it; shop around, get multiple quotes, and look closely at every aspect of those quotes. Look for the best interest rate, in particular, so that you keep your expenses down.

Do all this before you go car shopping. With financing in hand, a down payment set to go, and a clear understanding of what you want and what your situation is, buying a car will be the simplest part of the process. Get started with the research from CarFoundMe.