1. Clarify your priorities: While it can be tempting to try to buy a new car, the priority should be reliable transportation you can easily afford. Therefore, consider a reliable used car.
2. Identifying the right deal: You need something that can handle the mileage. Also, I wouldn’t consider going much cheaper. You can save yourself a lot of expense and hassle if you buy the right $10,000 car and drive it for six years than if you buy two $5,000 cars and drive each for three years.
Just to be explicit, if you buy a $10,000 car and get a standard four-year loan at a rate of 10 percent to 15 percent, that comes to a monthly car payment of $250 to $280.
3. Re-establish your credit: Prior to looking for a financing deal on a car, you MUST have a secured or unsecured credit card and some payment history. Banks provide unsecured cards with limits determined by your credit score. A good payment history makes your credit score go way up.
4. Be diligent while searching: Make a list of every dealer, then contact each one and ask to speak with the finance department. Let them know if you are a homeowner, you pay your mortgage on time and you have your bankruptcy discharge notification, then ask them if they will finance you. If they say yes, ask them what rates are typical for someone in your particular situation. Don’t let them look at your credit until you get a straight answer. You don’t want any inquiries into your credit until you are confident you can obtain a loan.
