New/used car purch. post-discharge

Discussion in 'Credit Talk' started by nightowlky, Sep 8, 2003.

  1. nightowlky

    nightowlky Well-Known Member

    Hello, all.

    I reckon this is a rather common situation but I haven't seen a lot posted about it. If you bought a new/used vehicle right after your bankruptcy was discharged, what car did you buy, how much down, what was the interest rate?

    I'm about to be in that boat and I have *NO* idea what to expect. I will have little to no money to put down and I know the interest will be high but I can't drive a beater. Anyone been there and care to share?

    I've read here and elsewhere that Ford is rather receptive to the recently discharged but how recent is that? 1 month? 6 months? A year? Ford has a sweet rebate on Taurus/Focus at the moment ($3000.)

    Just looking for actual personal experience here so no thread-crappers...I may, in all likelihood, need a new/used (but newer) car as I drive a fair amount and cannot rely on a beater. I would be able to afford $400/mo. but will not go over $300/mo. and plan to refinance as soon as I can as well as paying more on the principal through the year.


  2. nightowlky

    nightowlky Well-Known Member

    Thanks, keepmine.

    A good thread but looks like the poster had decent credit beforehand. I'm more looking for a compilation of various success stories.
  3. GoreyGirl

    GoreyGirl Well-Known Member

    IMHO, the monthly payments you are looking at are way too high, especially post-BK. There are great, reliable cars on the market now that are maybe 2 years old with around 30000 miles on them, still under factory warranty and are priced very reasonably.

    You can keep your total amount owed pretty low, have decent monthly payments and still get a reliable car. Remember that other then the fancy very expensive autos, most cars deteriorate in value very rapidly. Not worth throwing away all that money every month on something which will be worth nowhere near what it originally sold for.

    I've been looking at a lot of car ads lately and the deals out there are great, especially as the 2004 models are coming out, making older cars even better bargains then before.

    Just my two cents.
  4. nightowlky

    nightowlky Well-Known Member

    Right...but can those cars be purchased with little ($500) or no money down? That's why I was posting this thread...looking for actual numbers from people who've bought a car right after discharge.
  5. GoreyGirl

    GoreyGirl Well-Known Member

    One dealership was going to take my trade (worth about $500). Another wanted $1000. As always, it does pay to shop around. Just make sure they don't trick you into doing hard pulls on your credit, like one dealer did to me.

    Good Luck!
  6. mcdavis4

    mcdavis4 Well-Known Member

    To make sure you do not pay too much for whatever car (new or used) you decide on be sure to research it.

    My favorites sites are:

    These sites will be able to tell you what a car is selling for or worth and any problems they are known to have.

    Good Luck,
  7. nightowlky

    nightowlky Well-Known Member

    Thanks...I know all about those. Plus, I sold cars for a month earlier this year ;)
  8. SoParkDiva

    SoParkDiva Well-Known Member

    I didn't have a BK but I had horrible credit a few years ago. My credit troubles started in college 9 years ago when I had no concept of what credit was. When I decided to buy a car my FICO was mid 400's. I shopped around at all the dealerships and I was turned down or offered outrageous interest rates.

    I finally settled on a new car, list price around $15,000. The bank offered me 21% interest and my payments were low $400+ monthly. I will end up paying $10,000 in interest when I am done paying for this car next year. Now I am a prime customer and I won't have to jump through hoops to get a new car.

    I will also have my financing already arranged through a bank before I go car shopping. That is the only way to avoid the nonsense car salesmen pull.
  9. GoreyGirl

    GoreyGirl Well-Known Member

    I haven't checked lately, but Carfax was offering a month's worth of unlimited VIN lookups for one single price. Don't know how reliable their info is, though.
  10. mcdavis4

    mcdavis4 Well-Known Member

    If you "know" all about these then you "know" about the Town Hall. You should be able to get good info their. Also, you should have taken some experience from your month of selling cars. During that time I would imagine that you came in contact with someone in the same situation as yourself.

  11. DanS

    DanS Well-Known Member

    Re: New/used car purch. post-discha

    Anything is possible, but it sounds like you have too many demands given the recent BK.

    I got a loan from Chase at 12% on a 2000 Accord in April of '03, 18 months after my Ch7 discharge. My FICO was in the low 600 to high 500 range.

    I wanted to put down $500, wound up putting down $2500. I financed $9000 and although it was more down than I really wanted to do, I'm glad I got the loan and started a relationship w/Chase, my first prime account.

    I had to let go of a lot of things - new cars would not work, overall amount financed was too high but I could only go back to a 2000 car. The car itself was not as marked up as other cars, because it was a manual and had no power door locks/windows (Accord DX). So I paid under book value (retail) for it and that helped me to be able to finance it.

    If you must finance with $500 down, I'd say you need to let just about everything else go - right now. Whatever you can get and can live with for a year, then do so and then look for a better deal a year from now.

    Finally, a different approach to the problem. Try approaching a credit union and see what they'll do for you. If you have a little bit of time, open an account and borrow against that account, building up credit for a few months.
  12. nightowlky

    nightowlky Well-Known Member

    Re: Re: New/used car purch. post-discharge

    I did run across a woman who was in the middle of a divorce/bankruptcy and she could afford the monthlies on a newer car but she needed a co-signer and her father would not do that.

    I've not heard of "Town Hall", though. Would you please elaborate?
  13. nightowlky

    nightowlky Well-Known Member

    Re: Re: New/used car purch. post-discha

    Yes, my life is going to be hell for a while. ;-)

    I can go as much as $1000 down by next month but I don't know for how long I can keep my car. the meeting of the creditors is 9/23. How long after that (or after discharge) do I have before I'm required to turn over the car? I could conceivably live w/o a car for a few weeks but it will be hard as heck...

    I am eligible to join a Credit Union thru work which I will do next week when I get paid next and see what my options are there.

    I'm still trying to work on my dad to let me borrow (or buy from him) a car that he has but he's reluctant to do so. I will keep working that angle, though, as it will be my best choice, financially.


  14. DanS

    DanS Well-Known Member

    Re: Re: New/used car purch. post-di

    It is possible to re-commit to any existing loan, typically secured loans like a car loan. Are you sure you can't keep the car?

    Also, if you're not discharged yet, I don't think anyone will do business with you. I could be wrong, but that's the impression I got from every letter that came in after I filed the BK but before it was discharged.
  15. nightowlky

    nightowlky Well-Known Member

    Re: Re: Re: New/used car purch. post-di


    My car's loan was due (callable) back in Jan/Feb. The only reason a balance exists now is that I deferred several payments and there are late fees/interest, too. I'm sure they'll want the balance paid in full or the car back.

    I've been doing more thinking today (waking up to reality a bit, you could say), and thought, well, if I could put $1000 down and my car's balance is, say, $5000, that's 20% and I *might* be able to get a loan on my own? I'll find out in a couple weeks after I join a credit union and talk to them.
  16. SoParkDiva

    SoParkDiva Well-Known Member

    Re: Re: Re: New/used car purch. post-discha

    Is this the car you are driving currently? I thought your car was protected when you file bankruptcy? I don't think you have to turn it in.

    Also $1000 down might not be enough. I had to put a substantial amount down on my car.
  17. jlynn

    jlynn Well-Known Member

    Re: Re: Re: Re: New/used car purch. post-discha

    He owes money on the car.
  18. mbelden

    mbelden Member

    Re: Re: Re: Re: New/used car purch. post-di

    Pardon my stupidity but why was your car "due" back in Jan./Feb.? Is it a leased vehicle? And why did you not return it then? Or why hasn't the original creditor taken possession of the vehicle?

    When you file bankruptcy all of your property is frozen and techically controlled by your trustee. The original creditor cannot take your vehicle unless he asks your trustee for relief from your automatic stay protection. If this were to happen you would know about it. If the creditor just waits out the bankruptcy he is free to collect the car at any time after you have received your discharge. Many creditors don't waste their time taking possession of autos if you are making voluntary payments on time. This is when you continue to make your monthly payments, but no longer are legally bound to the loan. Your other option is to reaffirm the loan which is typically not recommended (where you resign the loan agreement and it is not included in your bankruptcy). Or of course you can voluntarily give back the car ;-)

    As for getting a car loan, you can get a loan before your discharge if your trustee approves it. You can also get a car loan after discharge but be very aware that your interest rate will not be pretty. You are much better off waiting 6 months before you apply for a car loan, but some people can't wait (or don't want to). Talk to a credit union, talk to local dealerships finance managers and see what these people can offer you. Bring a copy of your credit report and do NOT let them pull your credit unless they are 99% sure you will get approved. Ford Motor Credit is very BK friendly so definately check them out.

    As for the whole new vs. used, I think that is personal opinion. I know people who got brand new cars right after discharge and people who opted to drive an older car for awhile. Make your own decision and do what is best for you.
  19. nightowlky

    nightowlky Well-Known Member

    Re: New/used car purch. post-di


    I financed my car for 6 yrs beginning March 1997. That means the last payment was due in Feb. 2003. However, because I deferred several payments, there is still a balance owed despite the fact that the term of the loan is over. At least this is what a CSR from the finance company was telling me. So, my guess is they want the full balance paid (or maybe I can negotiate that down?) or they will take the car.

    I will be opening an account with a Credit Union next week and will ask to speak with a loan officer and explain my situation and also explain I could put down 20% of a $5000 loan to pay off the finance company and, essentially, refinance my car thru the C.U. and keep it.

    My other best alternative is pouring it on my dad to allow me to use his car and maybe even get on his insurance policy, too, to save money.



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