No Bank Will Finance You After a Repo? Here’s What to Do Next
Key Information
- There are a few options available if you want to get a car loan, even after your previous vehicle was repossessed.
- You may choose to apply for a traditional bank loan after a repossession, or try in-house financing at a buy here, pay here dealership like Hawthorne Auto Square.
- Getting a used car loan after repossession through in-house financing is a good way to rebuild your credit and improve your score to gain access to more opportunities in the future.
When No Bank Will Approve You: What’s Really Happening
According to the Los Angeles County Department of Consumer & Business Affairs, if you can’t afford to make car payments, you may have several options available before the vehicle is officially repossessed. It’s important to note that most banks won’t approve you for a new loan if your prior vehicle has been repossessed because you’re considered a high-risk borrower. However, if you’re still interested in getting a car loan after repossession, it’s important to know what to do next. The experts at Hawthorne Auto Square have some tips and information about how you can still get a car loan approved after a repo, even if you have bad credit.
What You Can Do Right Now to Get a Car After a Repo
Before you start looking for a new loan, there are some things you should do immediately after a repossession. Filing a Chapter 13 bankruptcy may help if you want to set up a repayment plan that allows you to catch up on the debt you owe for your current vehicle, but this doesn’t always work for everyone. The most important thing you can do right after a repo is to start rebuilding your credit and improving your credit score by paying down other debt and making sure you pay all of your bills on time.
If you really need another vehicle now, you may also consider asking someone to cosign your loan, such as a close friend or family member. Getting a cosigner increases your chances of approval, but keep in mind that the person who co-signs on your loan is also responsible for the debt. Another option is to save for a larger down payment on your next vehicle to keep the total costs lower, or consider second-chance auto financing from a reputable buy here, pay here dealership like Hawthorne Auto Square.
Second-Chance Car Financing Options
So, you need to buy a car after repossession. What financing options are available to you? Here’s what you need to know about the most common second-chance financing options and what they mean for you.
In-house financing vs. bank loans — what’s the difference?
The two main options you have for getting a car loan with a repo on your credit report are in-house financing or traditional bank loans, but what’s the difference between the two?
- Bank loans come from traditional banks or credit unions, while in-house financing is a loan offered directly from the dealership.
- Getting approved for a bank loan is much stricter and usually requires you to have good credit, while in-house financing is best if you’re looking for car loans with bad credit.
- In most cases, you’ll need to wait at least one full year before applying for a used car loan with a bank, but in-house financing typically allows you to apply for a loan right away.
- Approval time with in-house financing is usually one day, while traditional bank loans can take a few days to a week for final approval.
- When you get a bank loan, you’ll pay the bank directly, but when you get in-house financing, you’ll make payments directly to the dealership.
Benefits of in-house car financing after a repo
There are several benefits of using in-house car financing after a repo.
- Easier to get approved.
- It helps you rebuild and improve your credit.
- Flexible payment plans that fit your budget.
- Affordable used vehicles
Can I Rebuild My Credit After Repossession?
Yes, you can rebuild your credit after repossession by doing several things. First, make sure that you continue to pay all of your other bills on time. Pay down any other loans or credit cards as quickly as you can.
Try to keep all of your remaining debt balances as low as possible or get them down to $0, but leave the accounts open. Doing this shows that you still have available credit, but that you’re responsible with it in terms of your debt-to-income ratio and repayment history. You should also limit the number of new credit applications you submit to help rebuild your credit.
What Documents Do I Need to Finance a Car After a Repo?
When you apply for low or no-credit financing after a repo, you’ll need to provide the dealership with several important documents to get approved. Here’s what you’ll need to include when applying for financing after a repo.
- A current, valid driver’s license
- Proof of income (paystubs, etc.)
- Your social security number
- Proof of residence
- References, when applicable
At Hawthorne Auto Square, we accept many types of income, including disability, SSI, VA, and other forms of government assistance. The more documents you can include with your application, the easier and faster the approval process will be.
Why Choose Hawthorne Auto Square After a Repossession
There are lots of reasons to choose Hawthorne Auto Square after a repossession, including:
- Our fast pre-approval process: When you apply for our in-house financing online, you’ll get an answer about your approval within minutes.
- Our pride in outstanding customer service: At Hawthorne Auto Square, we’re proud to help customers who have no credit, bad credit, and those who have recently faced a bankruptcy or repossession.
- Our large selection of vehicles: Whether you need a sedan, a minivan, or a pickup truck, we have a wide selection of low-priced used vehicles available to choose from.
- Our rigorous inspections: Every vehicle we sell undergoes a comprehensive inspection and California emissions test (as needed), and includes a 30-day, 1,000-mile warranty.
- Our trade-in plans: If you still have a vehicle, you can trade it in with us to help go toward your loan down payment.
Serving Drivers Across the Los Angeles Area
Hawthorne Auto Square proudly serves customers from across the Los Angeles area, including:
- Carson, CA: 90745, 90746
- Inglewood, CA: 90301
- Compton, CA: 90220
- Torrance, CA: 90501
Ready to Start Fresh After a Repo? Check out Hawthorne Auto Today
If you’re interested in getting a car loan after a repo, start fresh with Hawthorne Auto Square. We offer easy, in-house financing, trade-in plans, and much more to make the process of buying a used vehicle convenient and affordable. To find out more, visit our dealership or contact us today!
Frequently Asked Questions
Can I buy a car after repossession even if my credit is ruined?
Yes, you can still buy a car after repossession, even if your credit is ruined. You can try to buy a car all-cash, get a co-signer on your loan, or apply for in-house financing from a buy here, pay here dealership like Hawthorne Auto Square for easy approval.
How does “used car loans with repo on credit history” work?
Getting a used car loan with a repo on your credit history works by applying for financing directly with the dealership instead of through a bank or credit union. These buy here, pay here dealerships finance the loans in-house, so you don’t need to worry about a low credit score or a repossession.
How large a down payment will I need if I have a repossession?
There is no set number for how large a down payment you’ll need if you have a repossession. However, traditional lenders usually require a down payment of at least 10 to 20 percent of the cost of the vehicle if you’re applying for a loan with them and have a repo on your record.
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