880 Walkers Line, Burlington, ON, L7N 2G2, Canada

Buying a car after bankruptcy in Cambridge

Buying a car after bankruptcy in Cambridge

Going bankrupt can be a challenging time for anyone but it will provide you with a new lease on life, everyone deserves a fresh start.

Our Cambridge auto loans team will give you some practical advice on how to get a car and save some money in the process.

Buying a car: needs vs wants

One of the requirements that a bankrupt person must go through is classes on financial management and understanding the difference between needs and wants.

While a car may seem like a want, it is for most Canadians a need. Harsh winters, no or little public transit, and a need to cover great distances just to work or go to school are reasons why we need a car in Canada

Identifying the lenders who work with bankrupt borrowers

The big 5 banks will not work with people who were recently discharged from bankruptcy, their focus is primarily on borrowers with high credit scores usually 700 or higher.

You will not be able to deal directly with Cambridge auto loan providers if you were just discharged from bankruptcy.

The only tangible way to access these lenders is by contacting dealerships in your area that focus on this type of financing.

These lenders have a very niche product and rely on their dealer network to find prospective customers to provide auto loans.

While these dealerships do work with credit-challenged borrowers, there are no guarantees because each application is unique.

Since you were just discharged from bankruptcy, you do not have a bad credit score but there will be a note in your credit report about the bankruptcy for the next 7 years.

What the lender will want to know is whether you have enough income to meet all of your current obligations plus whatever the proposed car loan will be.

The lender will need to see payslips and income tax documents. You should also bring your bankruptcy discharge certificates so you can prove you are no longer insolvent.

All of these steps may seem like a lot of work but the dealership is going to be with you every step of the way. Since you were recently bankrupt, you need to prepare yourself for a high-interest rate.

To offset the risk, lenders are going to charge a high-interest rate on this car loan. While at first, you may be frustrated about this, your dealership has a plan to make your life easier.

What you can do is take the loan and make all of your payments on time for 1-2 years. Over time, your credit score is going to improve, and eventually, you will qualify for a prime interest rate auto loan. When you reach that point you can ask the dealership to help you refinance the loan.

As you can see, there is light at the end of the bankruptcy tunnel. Your first stop should be your local dealership to explain your situation and get some lenders lined up, the sooner you do follow our tips the happier you are going to be over the long term.

We will use all our skill and experience to deliver the lowest possible Cambridge auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.

Categories: Auto Loan

Tags: ,