How to Buy a Vehicle After a Bankruptcy

Some people lose their assets in a bankruptcy proceeding, wherein lenders take possession of their automobiles to repay their debts. Since reliable transportation is a necessity, you may find yourself in the market for a new or used car after a bankruptcy. If you don't have cash to pay for a car outright, you might consider financing a car. While a bankruptcy hurts your personal credit file, it's possible to finance or buy a car after bankruptcy. In fact, buying a car can help your score.

Instructions

1

Rebuild your credit file with a new line of credit. Acquire a secured credit card immediately after your discharge to start rebuilding your credit score. Seek a card from your bank or another financial institution in your local area. Get information on the card, such as the annual fee, monthly fee and the minimum security deposit. Also, make sure the bank regularly reports account information to the credit bureaus.

2

Keep up with your remaining debts. You can exclude student loans and mortgage loans from a bankruptcy proceeding. Retaining these debts and paying them on time each month benefits your credit score and helps you build a better credit history.

3

Start saving money. Down payments are not required for car loan. But if buying a vehicle after bankruptcy, having a down payment can help you qualify for the loan, and it also lowers the loan balance. Typical down payments are 10 to 20 percent of the sale price.

4

Use a co-signer for the vehicle loan. Pick someone with a good credit history, and ask him to co-sign your new auto loan.