Car Dealerships That Accept Bankruptcies

Get Car Financing
Even with poor credit.

By

Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


, - May 8, 2019

If you’re going through a Chapter 7 or Chapter 13 bankruptcy, or recently had one discharged, where do you go to get auto financing? The good news is you have options, but where you can go depends on the type of bankruptcy you filed and where you’re at in the process.

Buy Here Pay Here Dealerships

Buy here pay here (BHPH) dealers don’t rely on third-party lenders and offer in-house financing, which means you can buy a car and take out an auto loan at the same place.

Unless they state otherwise, these dealerships don’t run credit checks, which means they don’t mind that there’s a bankruptcy listed on your credit reports. However, if you have an open bankruptcy, you still need the court’s approval to finance a vehicle.

BHPH dealers base approvals on income and down payment, but do raise the interest rate to offset not looking at your credit. As long as you have the cash, and the court’s approval if your bankruptcy is open, you shouldn’t run into any issues getting financed. Be aware, however, that your car choice is limited to what’s on the lot, so don’t expect your dream vehicle.

Special Finance Dealerships

Another type of dealership that offers bankruptcy auto loans are special finance dealers. These dealerships work with subprime lenders, and are experts at offering financing to credit-challenged consumers dealing with issues like bankruptcy.

Subprime lenders typically like to see that a Chapter 7 bankruptcy has been discharged before considering an applicant. On the other hand, many subprime lenders consider applications from buyers in an open Chapter 13 as long as they have the court’s approval.

These lenders check your credit score and reports, but also consider factors such as income, employment, down payment, and residency status.

What makes getting financed through a subprime lender great is that you have the ability to improve your credit over time – as long as you keep up with the monthly payments. Plus, you may be able to qualify for a lower interest rate with a subprime lender compared to a BHPH dealer, which saves you money in the long run.

Ready to Find a Dealer?

Dealing with bankruptcy is tough, and it isn’t easy finding a lender that can work with you if you have one on your credit reports and your credit score has dropped.

If you need help finding a dealership that can work with your bankruptcy, look no further. CarsDirect is teamed up with dealers all across the country that specialize in getting people with less than perfect credit financed. Fill out our car loan request form today, and we'll get right to work connecting you to a local dealership.

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


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