Getting by without a car can be tough in any environment, and Las Vegas is no exception. In fact, SmartAsset makes “you need a car” number three on its list of important information for people considering a move to the city. That’s partly because the city is oddly shaped and spread out, meaning that getting around on foot is tougher than it is in many metro areas. Las Vegas does offer public transportation, primarily in the form of city buses. But, bus routes are limited, won’t always line up with your commute or other destinations, and can take much longer than covering the same ground by car.
With that in mind, it makes a lot of sense that people considering bankruptcy are often concerned about their ability to finance a car after bankruptcy. Even those who have working vehicles recognize that there are no guarantees, warranties typically don’t cover everything, and there is always a possibility that they’ll need to replace a vehicle on short notice. Changing life circumstances, such as a new job, can also create the need to obtain a vehicle.
Of course, securing a loan for a car is more difficult when your credit history is shaky, and that includes a recent bankruptcy. But, that doesn’t mean you won’t be able to buy a car after bankruptcy. You’ll just have to do your homework and weigh your options. Here are 4 ways you may be able to purchase a car after bankruptcy:
You may assume that if you’ve recently filed bankruptcy, you won’t be able to buy a car with cash. But, that isn’t necessarily true. With the debt that was weighing you down discharged and new financial habits, you may find that you have enough cash on hand to buy an older car to tide you over until you’re ready to upgrade
Get a cosigner
If your credit history isn’t strong enough to secure financing on your own–whether because of a bankruptcy or due to other black marks such as collection accounts and a history of late payments–a cosigner with a solid credit score may be the answer. Just make sure you’re on the same page and both understand exactly what you’re getting into. In most cases, your loan will appear as an open obligation on your cosigner’s credit report, meaning that it could impact his or her access to other credit.
Any late payments will ding your friend or relative’s credit history as well as your own, and he or she will be on the hook for full payment if you default on the loan. In short, don’t go this route unless you’re very confident that you can afford to pay for the vehicle in full and on time.
Work with a high-risk or post-bankruptcy lender
There are finance companies and even dealerships that specialize in high-risk financing or have special programs for those who have filed bankruptcy or have other credit challenges. If you truly need a vehicle and can’t find a better alternative, this type of lender may offer a solution for you. But, be cautious. Remember that these lenders balance out their increased risk with higher interest rates and often longer-term loans. Both can put you back in financial trouble, so assess your options and the cost of financing carefully, and don’t buy more car than you need.
Delay, if you can
Sometimes, acquiring a new vehicle means the difference between keeping your job and not, and waiting isn’t an option. But, if you can wait a little longer–for instance, if your current car isn’t perfect but you can make it last another six months–you may find that the passage of time opens up your options. You’ll have time to set aside more for a down payment, which can make it easier to get a loan with borderline credit. And, if you make the right moves, your credit score could increase quickly. According to one study, 43% of bankruptcy filers have scores of 640 or higher within one year after bankruptcy. A small percentage increase their scores to above 700 in just one year.
Consult with an Attorney Before Buying a Car After Bankruptcy
The bottom line is that there are options available for most people to purchase cars even shortly after bankruptcy. It’s also important to recognize that delinquent debt and a history of late payments can also be a serious obstacle to securing a car loan. In other words, many who have trouble securing vehicle financing after bankruptcy or who need a cosigner or have to work with a high-risk lender would have been in the same position prior to filing bankruptcy. The big differences are that most have more funds available for this type of purchase after bankruptcy, and are in a position to begin rebuilding credit.
That said, everyone’s situation is a little bit different. If you are considering bankruptcy and have specific concerns about your ability to purchase a vehicle after bankruptcy or any other issue, an experienced Las Vegas bankruptcy attorney can be your best resource. At Freedom Law Firm, we offer free consultations to ensure that you have the information you need to make the right decision for you and your family. You can schedule yours right now by calling 702-903-1459 or filling out the contact form on this page.