I surrendered my beloved Mazda after our Chapter 7 closed in November, and then went three months with no car. I didn’t think I’d mind sharing a vehicle with Tony, and it worked reasonably well, but we live in a very rural area and I really missed having my independence. After going through bankruptcy and cleaning everything up I didn’t want to incur additional debt, but I finally realized that was my best option, both in terms of rebuilding my credit and getting a dependable vehicle. So I saved my pennies for a decent down payment, and headed off to Carmax. I thought about waiting another month or so, but I wanted to have them pull my credit before our impending foreclosure. My FAKO score is about 640, up from 570 in mid-bankruptcy, so I estimated my interest rate would be 18%-24%. After test-driving half a dozen cars, I settled on a gently-used 2008 Acura for $2k under KBB, crossed my fingers and toes, and gave the in-house financing a try.
Lo and behold, I got three credit offers, all with terms of 72 months: CapitalOne offered 10.25% with a $2,000 down payment, Banco Santander offered 17.5% with the same amount down, and Wells Fargo offered 17.5% with a whopping $7,000 down. Wells Fargo can fucking bite me.
Needless to say, I selected the first offer from CapitalOne. The interest rate isn’t good, but it’s not terrible for 3 months post-bankruptcy. I think it helps that my credit was very good before the bankruptcy. I found it interesting that none of the lenders offered terms shorter than 72 months. My payment is fairly low though, and the loan is simple-interest and has no penalty for paying early, so I should be able to double up on payments and get it taken care of in 3-4 years instead of six. Or, maybe in 6-12 months I can refinance it at a lower rate.
The Carmax credit process is interesting. They take your application info once, then shotgun it through a bunch of different lenders at one time, online. You can apply by phone, but if you go in person you can see all the offers coming in, one at a time, on the computer monitor. Then you can compare options and pick the one you want. It was way more straightforward than a regular car dealer, and the whole thing took about ten minutes from start to finish.
The Carmax salesperson told me that the lenders seem to be clamping down on credit a little, but that they successfully sell to people post-bankruptcy all the time. I have to add…Carmax is the bomb. No pressure, no haggling, no back-office shenanigans. I told them up front that I had a recent bankruptcy and they still treated me as well as if I were paying cash. I also loved having three credit offers to choose from, even though they were all subprime. I would do business with Carmax again for sure.