How To Buy A Car after Repossession
After repossession, you may find yourself with several issues to deal with at once. First of all, you will be without a vehicle, and will have to find other ways to get around until you’re able to get another car. Secondly, you could still owe money on a vehicle that you can no longer drive.
When you are financially capable of replacing the repossessed car, you will probably find that your credit isn’t in the best shape. And it can be difficult to get auto loan approval if your credit is damaged. But before getting too discouraged, remember that it is possible to fully recover from auto repossession, but it will take time, patience and some careful budgeting.
The Aftermath of Auto Repossession
If your car is repossessed, you will still be responsible for what you owe on the auto loan. It is likely that the car will be sold at auction, and the selling price will go towards your balance, but you will have to cover the remaining amount. For example, if your repossessed vehicle sells for $5,000, but your loan balance is $7,000, you will still owe the lender $2,000.
It is also likely that you will be charged any fees that are associated with the repo. And because financial problems may have led to the repossession, finding out that you still owe a substantial amount of money will definitely not help your situation.
This is when you have to put some real thought into what you’re going to do next.
- Stick to a strict budget and pay what you owe. While it may be a huge financial burden, if you are able to settle up with the lender, you will avoid further complications. And even though you will still be without a car and have a repo on your credit report for about seven years, you will at least be able to stop any further damage from happening.
- Consider bankruptcy as an option. Declaring bankruptcy should always be a last resort, but it may be your best solution if you still owe a lot of money after repossession. If you are unable to pay the amount that you owe the lender, your account could be sent to collections. You may even face legal action and further damage to your credit. And, yes, bankruptcy will do substantial harm to your credit rating, but you will at least get some protection and a fresh start to rebuild once you have been discharged.
After you have made it completely through the repossession, you will probably be anxious to put the event behind you and get on with life in a replacement car. And, until your credit is fully restored, you may have limited vehicle buying options. However, you may be able to get back on the road sooner than you think.
Getting an Auto Loan after Repossession
Again, your credit will be negatively impacted for at least seven years after repossession, but there is a good chance that you will need to buy a car well before those seven years are up. With this in mind, here are three options to consider.
- You can buy an inexpensive car with cash. There are plenty of private sellers out there with vehicles to sell. And while this may seem like the easiest solution to an immediate problem, buying a car with cash will do nothing to improve your credit score. Also, you could end up with an unreliable vehicle that will cost you a fortune in repair bills.
- You can finance a vehicle with a bad credit auto loan. There are lenders out there that are willing to work with bad credit car buyers. If you are approved for this type of “special financing,” you will have an opportunity to rebuild your credit by consistently making your payments on time. However, even special finance lenders normally require you to wait a year after repossession before they will consider your loan application.
- You can purchase a car from a Buy Here, Pay Here (BHPH) dealer. This may your best bet if you need a car immediately after your repo. These dealers typically do not run credit checks and only require a valid driver’s license, residency verification and proof of income. And while many BHPH dealers do not report positive payment activity to the credit bureaus, some do. If possible, try to work with a Buy Here, Pay Here dealership that will allow you to give your credit rating a boost by reporting all of your timely payments.
After repossession, buying a car with a bad credit auto loan is the best course of action for most consumers. With this option, you will get the vehicle you need and a chance to significantly improve your credit. And if you’re ready to get back on the road and on your way to a better credit rating, E-Z Pay Cars can help.
Easy Financing after Repossession
Going through repossession or any sort of financial trouble is hard, but financing a vehicle with damaged credit can be easy and hassle-free. E-Z Pay Cars can work with your situation and get you back on the road fast.
Just fill out our simple and secure online application to get started today.
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