Trying to buy a car after a prior repossession is not easy. Most dealers or lenders won't even talk to you about financing until after a year has passed from the time of your repo, even dealerships that finance bad credit. So what are your options, what sort of car lots that finance can help you, and how can you turn things around? Let's look at car buying after your repo.
Effects of Auto Repossession
Below are a few of the effects a repossession on your credit can have:
- Most lenders will not lend to you till after a year has passed
- Your credit will take a hit, you will likely need a bad credit loan
- The repo will leave a black mark on your credit for seven years
- Most lenders will consider you an extra risk
Even the financing companies that LotPro works with, who offer car loans for people with repossessions themselves, will not consider lending until that year has elapsed. This can be difficult for people with a recent repo since life generally does not stop, and it also generally requires a car. Your options are generally what used cars for sale you can afford out of pocket, or a buy here pay here dealer.
We've talked about financing car lots like buy here pay here dealers before, but in the case of a recovering repo buyer, they offer extra challenges. For one they will not report good payment history to the credit bureaus, but will report if you miss a payment. This credit trap is to make you a possible lifetime customer with little hope of recovering your lost credit rating. If you go this route, keep the amount owed as low as possible.
Rebuilding Your Credit after Repossession
After a year has passed, many auto dealerships that finance bad credit will consider you for a bad credit loan even with a repo. The advantage here, as with the financing companies used through LotPro.com, is that they can help you rebuild your credit by reporting your positive timely payments. It is best to chose only used cars for sale you can afford when buying a car to reduce the risk of further repossession and also so that you can take advantage of your better credit as it improves.
If you would like to learn more about our financing offers for people with a repossession, or wish to apply, click on the banner below.