Is it better to buy a car or rent a car after bankruptcy?
If you want to be approved on the best terms when buying a car, you need to know the credit guidelines for car lenders before you can apply for a credit.
It will save you time and frustration – but more importantly, it will help you avoid credit queries that may lower your FICO credit score by up to 12 points per query.
Step 1 Making a lease or purchase decision is a credit guide that determines the lender.
You first ask if they lend to the bankrupt. If so, under what conditions?
That's right. You must prove in advance that you are bankrupt. Do not hide it. We have to face the fact that some dealers just will not work with those who have gone bankrupt. So our job is to find those.
Some lenders will be leased only to the bankrupt. Others only provide purchase financing.
Please ask the dealer's CFO what structure your manufacturer likes
] Here's a quick tip: If your bankruptcy does not appear in your Lenders report that your lender pulls – then, in the lender's eyes, you do not go bankrupt
The only lender
– Second choice: Banks (not financial companies) [19459003
99% of the cars I have rented for many years are with my own lenders.
– Third choice: Credit Cooperatives
The deal comes from a conversation with Amy, the financial manager of the local Land Rover dealer in Indianapolis. I told her my financing advice to her, but I like financing through car manufacturers
I told her my current FICO score. She immediately said that with my score, she can do better through local banks.
The next day, I signed a lease agreement with the local bank. Open to her advice literally saved me a few hundred dollars a month in that car
So be flexible … but be careful. It seems that most car dealerships refer to all of their funding sources as banks.
The following is a list of some of the most commonly used subprime finance companies:
] 1. HSBC Cars
2. Capital One
4. WFS FINANCIAL
You want to pass the sub finance company – unless you've exhausted all the other options. Subprime lenders should be your last resort.
Only use credit cooperatives if they report to all three national credit reporting agencies. How do you know if a credit union reports to all three credit reporting agencies?
Simple – you ask. Ask the branch manager of the credit union if they report.
Three of the worst luxury prisoners to rent or buy after bankruptcy are: BMW
The three worst of the mainstream prisoners are:
2. KIA / Subaru
What Makes These Worst?
Once these lenders see you have gone bankrupt, they are less likely to work with you. However, if they are willing to work with you, they will want you to have at least a few years during this time.
Now I tell you how bad the six lenders above are – and sometimes they may offer you good deals. For example, if one of the above is the largest distributor in your area, they may be able to provide you with special deals, and small resellers can not.
Of course, things change over time to capture car loans. They are single-mindedly changing their credit guidelines to meet their financial goals. So, at least researching these dealers is always a good idea – just do not make your hopes too high.
Okay, so you did your research and narrowed your choices one or two Step 19: Auto Dealers (Just Like Me and Amy)
When you enter a dealer with your FICO score, the dealer will know that you are a more informed consumer and can not use it. Just know that the FICO credit score used by car dealers is different from what we see consumers. The dealer's rating is called the FICO Automotive Industry Score. The good news … If you pay all previous car loans as agreed, these FICO scores may be higher than your normal FICO score
Some auto dealerships told me that if your FICO score is high You can purchase your score from myFICO.com
Step 3 is to interview the remaining car dealerships
First of all Ask them these questions:
– Which credit reporting institution do you use to make a loan decision?
– What is
– What credit rating do I need to get the best interest rate?
– Does your lender prefer to provide leasing or purchase financing to the insolvent debtor?
– What incentives are now leased or purchased
At this point it is important to keep an open lease or purchase. Evaluate your choices and incentives. Remember, you are buying financing. In other words, the most important factor is that the lender is willing to lend you money.
I personally see the rental and purchase decisions in three ways:
1. If you are recently recovering from bankruptcy, the only important thing is that if you can be approved by a lender to pay the interest rate, report it to all three national credit reporting agencies. So you should only consider lenders bankrupt
. Once your credit score begins to increase, you can begin to select the car, depending on the credit reporting agency that the lender uses to determine if you qualify. Obviously you should choose to use your highest FICO credit score to make a loan decision on the lender
3. When your score is high enough, or two years after your bankruptcy … or if your bankruptcy does not appear on the lender's credit report, you can choose just about any car you like. But make sure you still do your research and use your credit score to help you compare rates, terms, and incentives