Bankruptcy Auto Loans


WA Auto Credit Bankruptcy Loans are Better

We have more bankruptcy auto loan programs than our competition. Whether you have a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy, we can help. We have more bankruptcy auto loan programs that offer $0 down payment. We have more bankruptcy programs that will help you buy a car before your bankruptcy discharges. We are able to shop those different auto loan programs against each other to help you get your best loan possible.

How do $0 Down Bankruptcy Auto Loans work?

The $0 down programs are by far our most popular bankruptcy programs. It makes sense, right? If you just filed for bankruptcy, you probably don’t have $3,000 or $4,000 lying around. Our bankruptcy loan programs are designed to help you buy a car and start rebuilding your credit without coming up with a lot of cash for a down payment.

What are the typical requirements for bankruptcy auto loans?

Most of the $0 down programs like their customers to have some good credit in the past, preferably an auto loan that was paid as agreed for at least a year. If you had that auto loan for a long time, then put it in your bankruptcy, you will probably still qualify.

Additionally, you need to make enough money to afford your new payment. Most of the programs are requiring $2,000-$2,500/month gross income and your debt to income ratios must be acceptable.

Vehicles that Qualify for $0 Down Bankruptcy Auto Loans

This is probably the most important section. Bankruptcy auto loan programs are designed to get you a vehicle that gets you to and from work, so that you can make your car payment on time. Typically, the lender will require that the vehicle be no more than 6 or 7-years old and have less than 65,000 miles or so.

Why do lenders dictate mileage and year of vehicle?

It comes down to risk. Bankruptcy Auto Loans are risky to the lender. They do not know how well you are going to pay an installment loan after your bankruptcy. $0 down loans are very high risk because you are not invested in the vehicle and the lender is not in an equity position so if you repossessed the car, the lender would lose a lot of money.

One way to lower the risk of the loan is to require a newer, low mile vehicle. Older vehicles have a higher chance of breaking down, which could cause you to miss work or spend money on costly repairs…both of which could result in your bankruptcy auto loan defaulting. Newer vehicles have a lower chance of breaking down, so to a lender, those vehicles set you up for success.

Difficult Vehicles to Buy After Bankruptcy

If you look at two Honda Accords, identical in every way, except one is 2 years older and has 24,000 more miles on it, you will notice that the newer one is more expensive. The same is true with any car. The bankruptcy auto lenders often require newer cars with lower miles on bankruptcy auto loans, which can make it tougher to buy certain types of vehicles with an affordable price.

If you want to buy a large SUV for $10,000-$15,000 dollars, you probably will not be using the $0 down program. It is okay to buy older vehicles, but it is important to know what you are getting yourself into when looking at older vehicles. The biggest fear for a lender is that the car will break down and you decide to either not make payments anymore, or you simply cannot afford to make the payments to the bank and to the mechanic. If you have a large down payment, you are more likely to keep the vehicle because you have a vested interest. Additionally, if you have a large down payment and still repossess the car, the lender will be in a better position when the vehicle sells at auction than if you did a $0 down loan.

How much down payment is necessary when buying an older car after bankruptcy?

It all depends. How old is the car? How many miles? How expensive? Even the make and model can affect how much down payment the lender will need to put the loan together. There is no set amount, or percentage down payment required.

If you still have questions after reading this article,  Contact Us so that we can help you with your bankruptcy auto loan.


  • Gary Steege April 29, 2011 at 10:01 am

    Can I qualify if I still have about (18) months left to pay on a Chpt 13? My existing 2001 Expedition $185,000 miles – needs new engine – Don’t have 5K to replace it. Looking for used vehicle maybe $10,000?? Thank You

    • rgarri September 7, 2011 at 10:24 am

      Hi Gary,
      When you are inside of a Chapter 13 Bankruptcy, you have to jump through a couple hurdles. Depending on the state you live in, the judge or trustee needs to sign off you buying a car outside of your Chapter 13.
      The type of loan you qualify for and your down payment will determine what kind of vehicle you are looking at. Older, higher mile vehicles will typically require some money down to offset the risk the lender takes by financing an older car. If you qualify for a $0 down Chapter 13 loan, those lenders will require that the vehicle be fairly low miles and a recent model year. If you want a car, you can usually get one with a payment between $300-$400 in one of those programs. Large trucks and SUVs are usually closer to $500/month.

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