Post-bankruptcy car buying tips for Canadians

Post-bankruptcy car buying tips for Canadians

Posted on June 15, 2022

Bankruptcy could happen to anyone since the average Canadian owes $1.76 for every $1 they earn. If you miss a few paydays, you're already in trouble, and if you miss a few more, your credit score will go down.

Before you know it, you'll be meeting with a bankruptcy trustee.

Something all bankruptcies have in common is that no one saw it coming. When you are bankrupt, you can't take on any new debt and have to live on cash only.

This makes it hard to rent an apartment or get a job that requires a credit score. The fact that you went bankrupt will be known to everyone.

But the good news is that you got through it and now have a better grasp on personal finances.

But now that you need to buy a car, it might seem hard to find lenders who will give you another chance.

Taking small steps to rebuild your credit is the best way to do it

Our economy runs on credit, and you will need to rebuild your credit score. Start by signing up with Home Trust or Capital One for a secured credit card.

You're sure to get one of these secured cards, but you'll need to put money into your account as collateral. Even though this is a "secured" credit card,

Making a budget for your new vehicle

During the bankruptcy process, you would have learned how to make a budget. How much can you spend on a car payment each month?

People often make the mistake of falling in love with a car before they know how much they can spend on it. Once a person gets attached to a car on an emotional level, it can be hard to find a cheaper replacement.

You should set aside 35% of your total income to pay off your debts. Since you don't have a lot of debt, you shouldn't have too much trouble making room in your budget.

Just make sure to include the costs of keeping your car in good shape.

How to find lenders that give second chances to hard-working borrowers

There are lenders out there that provide second chances; they do not advertise on mainstream media.

These lenders have to be very selective about who they do business with, or they could take on too much debt and end up going out of business.

Look for car dealerships in your area that say "all credit accepted," "second chance credit," or something similar. These dealerships will know which lenders are going to give you a reasonable offer.

The dealership can get you a loan right now, but they can also show you how to fix your credit so that in a year or less, you can get a loan with ultra-low interest rates.

After bankruptcy, you'll be able to start over, and the first big step is being able to buy a car. Just make sure to choose a car you like, because there aren't many on the market.

Contact Unique Chrysler for help, advice and competitive St. Catharines car finance and leasing.

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