/Can I Buy a Car If I’ve Filed Bankruptcy?
Can I Buy a Car If I’ve Filed Bankruptcy?

Can I Buy a Car If I’ve Filed Bankruptcy?


Bankruptcy is often seen as a financial setback, and for good reason. It can have significant consequences on your credit score, making it challenging to secure loans or finance for various purposes, including buying a car. However, the good news is that it’s not impossible to purchase a car after filing for bankruptcy. In this article, we will explore the possibilities and provide guidance on how to navigate the car-buying process after bankruptcy. We’ll also introduce you to dealerships that specialize in serving customers with a bankruptcy history.

The Impact of Bankruptcy on Car Buying

Bankruptcy, whether Chapter 7 or Chapter 13, can affect your ability to obtain a car loan or lease. The primary reason is the damage it inflicts on your credit score. A bankruptcy record can stay on your credit report for up to ten years, significantly lowering your credit score. However, a low credit score doesn’t necessarily mean you won’t be able to buy a car; it just makes the process more challenging.

Securing a Car Loan After Bankruptcy

While the path to obtaining a car loan after bankruptcy may be less straightforward, it is certainly not impossible. Here are some steps you can take to increase your chances:

  1. Rebuild Your Credit: Start by taking steps to rebuild your credit. Obtain a copy of your credit report, review it for accuracy, and work on correcting any errors. You can also apply for a secured credit card or a credit-builder loan to help rebuild your credit history.
  2. Save for a Down Payment: A larger down payment can demonstrate your commitment to the car purchase and make lenders more willing to work with you. Saving for a down payment also reduces the amount you need to finance, making you a less risky borrower.
  3. Explore Subprime Lenders: Traditional banks and credit unions may be hesitant to approve a loan for someone with a bankruptcy history. Subprime lenders, on the other hand, specialize in working with individuals who have less-than-perfect credit. These lenders may charge higher interest rates, but they can be a lifeline for those seeking car financing after bankruptcy.
  4. Consider a Co-Signer: If you’re struggling to secure a loan on your own, you can ask a friend or family member with good credit to co-sign the loan. This essentially means they’re taking on the responsibility of the loan alongside you, increasing your chances of approval.

Dealers That Specialize In Bankruptcy

If you’ve filed for bankruptcy and are looking for a car, you might be relieved to learn that there are dealerships that specialize in serving customers with a bankruptcy history. These dealerships understand the unique challenges that bankruptcy can pose and have programs in place to assist customers in obtaining a vehicle. While they may charge slightly higher interest rates, they are often more willing to work with you, making the car-buying process smoother.

Here are some tips for finding dealerships that specialize in serving customers with a bankruptcy history:

  1. Online Research: Start by conducting online research to find local dealerships that offer financing options for individuals with a bankruptcy history. Many dealerships now have websites that provide information about their services and financing programs.
  2. Ask for Recommendations: Reach out to friends, family, or colleagues who may have gone through a bankruptcy and purchased a car afterward. They can provide valuable recommendations and insights into their own experiences with dealerships that cater to bankruptcy customers.
  3. Visit Dealerships in Person: Once you’ve identified potential dealerships, visit them in person. This will allow you to get a feel for their customer service and assess the quality of their inventory. Be prepared to discuss your bankruptcy situation and ask about their financing options.
  4. Read Reviews: Online reviews and ratings can provide valuable information about a dealership’s reputation and how they treat customers with a bankruptcy history. Look for dealerships with positive reviews from customers who have had similar experiences.

The Benefits of Dealerships That Specialize In Bankruptcy

Dealerships that specialize in serving customers with a bankruptcy history offer several advantages. These include:

  1. Expertise: These dealerships have experience working with customers in similar financial situations, so they understand the challenges and can provide guidance tailored to your needs.
  2. Financing Options: They often have relationships with lenders who are willing to work with customers who have filed for bankruptcy, increasing your chances of approval.
  3. Inventory Selection: These dealerships typically have a range of vehicles to choose from, giving you more options when selecting a car that suits your needs and budget.
  4. Transparency: Reputable Dealers That Specialize In Bankruptcy are typically transparent about their loan terms and interest rates, ensuring that you have a clear understanding of the financing arrangement.
  5. Rebuilding Credit: Making regular, on-time payments on your car loan can help rebuild your credit score, which is essential for your financial recovery after bankruptcy.


Filing for bankruptcy doesn’t mean you have to put your life on hold, and it certainly doesn’t mean you can’t buy a car. While it may be more challenging, there are steps you can take to secure a car loan after bankruptcy. Dealerships that specialize in serving customers with a bankruptcy history can be valuable partners in this process. With patience, financial responsibility, and the right resources, you can successfully purchase a car and move forward on your path to financial recovery.