How to buy a new car after bankruptcy in London
How to buy a new car after bankruptcy in London
Posted on July 7, 2022
If you are reading this, then you most likely have or are going through bankruptcy. Our London car loans team will talk about what you should do if you want to buy a new car after filing for bankruptcy.
We know this is a touchy subject, especially since nobody wants to talk about their money problems.
Bankruptcy isn't the end; it's just a financial fresh start
A long time ago, bankruptcy was seen as the end of a person's financial life, something from which they could never recover.
Now, thanks to these laws, people can get a fresh start. Anyone who thinks they can't go bankrupt is fooling themselves.
The average Canadian is only $200 away from financial trouble, so anyone could go bankrupt.
After your bankruptcy is over, your trustee will give you a document that is your official discharge. If you don't have this document, you can't legally take on any new debts.
Once you have the document that says you are no longer liable for the debt, you can start to rebuild your credit.
Why it's important to fix your credit ASAP
The bankruptcy would have freed you from having to pay back your debts, but it will remain on your credit report for up to seven years, along with the bad debts.
Any potential lender would be hesitant to give you any kind of new credit until you have shown that you can handle your money well.
In this situation, you need to sign up for secured credit products like the ones HomeTrust and Capital One Bank offers. You are guaranteed to get approved for these secured credit facilities, which will allow you to start building up your credit score.
It could take a few months for your credit score to go above 620, which is the minimum score needed for most conventional credit products.
Fine-tuning your car-buying budget
You've taken the first big step by working to improve your credit score, but there are still many more steps to take. While you're waiting for your credit score to go up, you should work on your budget.
Do you know how much money you have left over each month that you could use to pay for your new car?
A car payment can easily cost $700 a month, and this doesn't include insurance, maintenance, or gas. So, to be safe, you should try to save at least $1,100 for all of your car-related costs.
All of your debts should have been wiped out by the bankruptcy, so you should have a lot of money left over to buy a new car.
How to get a car loan in London after filing for bankruptcy
You are still not out of the woods. If you want to get a good car loan after bankruptcy, you will need help from a professional.
The best thing to do is to talk to dealerships in your area that help drivers like you get a car loan, even if they have bad credit.
These dealerships will also show you the easiest and simplest way to improve your credit score, so you never have to worry about paying high-interest rates again.
Contact Unique Chrysler for help, advice and competitive London car finance and leasing.
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