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How to Buy a Car after Bankruptcy in Hamilton

How to Buy a Car after Bankruptcy in Hamilton

There is a significant portion of the Canadian population has gone bankrupt. Everyone deserves a second chance and if you have recently been discharged from bankruptcy and need a new car then you are in the right spot. Bankruptcy is a serious situation so we asked our auto loans team to explain how to buy a car after bankruptcy in Hamilton.


Checking your credit report


After you have been discharged from bankruptcy, it will be on your credit report for the next 7 years. Some people see having a bankruptcy on your credit report is a major obstacle, as it was in the past. It’s not like that any more.


Some lenders believe consumers deserve a second chance and will offer auto loans to them.  These lenders are not aggressively advertising online so you will need expert help to find them.


The initial step is to re-establish your credit.


There are websites like Equifax that will give you access to your credit score and report for free, you just need to pass their identity verification process. When you have your credit report, they may not be any credit accounts since the bankruptcy.


One option to begin rebuilding is to sign up for a secured credit card from companies like CapitalOne. These credit cards work like normal cards except your credit limit is directly linked to the amount of money you deposit into a special secured account.


Finding the right car dealership


While you work on rebuilding your credit, you will need to start looking for car dealerships in your area that have experience helping individuals like you.


One way to identify these dealerships is by calling them and asking them whether they work with customers to buy a car after bankruptcy in Hamilton.


These dealerships may know lenders that provide loans to customers who were recently discharged from bankruptcy but you will not get the most competitive rates.


To secure a low-interest rate auto loan, you will need a credit score of 680 or higher, which will take time to rebuild. What the lenders may do is ask you to either provide a down payment or have someone co-sign the auto loan with you.


The amount of the down payment may be more than what you can afford, but it is something you can work towards.


If you can get a co-signer then it would give you an advantage because the co-signer would help you qualify for prime interest rates.


At this stage in the car buying process, you may feel overwhelmed, which is a perfectly natural reaction. Buying a car is a major financial decision and one you need to do carefully.


If you are serious about buying a car, your best option is to start working with a car dealership now. The dealership will know precisely what steps and in what sequence you must take to get a car loan.


It may seem like a hassle but at the end of it all, you will have a new car and be on your way to having a very high credit score. Just ensure the car you do buy is something you can readily afford and everything else will go your way.


When you’re ready for a car lease or loan, get in touch with the Hamilton auto loan experts at Northway Ford for great deals on auto finance.


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