Repossession can actually be a shocking and traumatic event for many consumers, especially since now you have no transportation. If you recently had your car repossessed, what is the best way to get another car?
Steps After a Repossession
Not having a car can make life much more difficult. If you are looking into getting another car after a repossession, here is how you should prepare:
Save for a Down Payment
Since you now have a repossession on your record, you will most likely be working with a subprime lender. Most subprime lenders will require a deposit of either $1,000 or 10% of the purchase price.
If you can save up more, then you should make a larger down payment. Putting a larger down payment means that you will have less interest to pay and fewer payments to make.
Pay off Your Fees
Once your car is repossessed, it is typically sold at auction to the highest bidder. If the lender auctions your car and does not get all of the loan money back, you could be held legally liable for the difference.
Before you shop, try to settle on your debts and negotiate with your creditors. As always, offer them a fraction of your debt in exchange for removing the delinquency from your record.
Know Your Score
Before you even begin to browse around for a new car, you need to know your credit scores. Thanks to a government mandate, you can get your credit report for free, once per year, from the website www.annualcreditreport.com. When you get your report, check to make sure it is accurate. If you find an error, be sure to file a dispute with the corresponding credit bureau.
The Waiting Game
Subprime lenders are used to working with buyers that have repossessions on their credit reports. If your repossession was less than a year ago, we recommend waiting it out until 1 year has passed.
Your chances of getting approved are much higher when more time has passed since your car was repossessed. You can take this time to also rebuild your credit score. If you want to learn about some ways to boost your score fast, check out our latest article here.
Not having a car can make life much more difficult. However, getting financing after a repossession is easy with CrediReady. Our nationwide network of trusted dealers and verified lenders work with buyers in all credit situations. If you haven’t already, take a moment to fill out our free no-obligation loan inquiry form to get into a new car today.