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Can you get car finance after bankruptcy?

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If you are someone who has ever tried to look for a manageable car finance agreement after filing for bankruptcy, then you know just how difficult it can be. Many standard lenders will make it quite difficult for you. That’s why it is so important to search for specialist lenders experienced in dealing with offering those who have faced bankruptcy a beneficial car finance deal. If you are bankrupt then you will be considered to have ‘bad credit’ – fortunately, there are lenders that specialise in offering bad credit car finance agreements that work for anyone who has filed for bankruptcy.

The good news is that while facing bankruptcy makes finding a good finance deal more difficult, it certainly doesn’t make it impossible. It just means finding a lender that offers car finance and car lease agreement for bankrupts – often a specialist bad credit car finance company.

A black car
Photo by Samuele Errico Piccarini on Unsplash

Make no mistake, however, that being bankrupt does inhibit your options when it comes to agreeing a new car finance deal. For example, you will likely have to pay a deposit on your new vehicle – and this deposit will almost certainly be higher than for someone with a good credit record.

It is also the case that, due to the way that APRs work, your APR (annual percentage rate) will likely be higher too – this is because lenders will automatically consider you to be a greater risk for lending credit than the average customer.

The good news is that most specialist lender’s apply a two-step credit check process, meaning that a soft check (one that doesn’t appear on your record) is performed first. This approach to the process works very well for anyone applying for car finance after bankruptcy, because it gives you a much better idea of whether you will pass a full credit check before actually applying for finance. This means that the chances of a negative search appearing on your profile are reduced, boosting your credit rating and credit history. Too many searches can lead to a lowered credit score and rejected applications, so this approach to credit checks helps to keep searches to a minimum.

During your application for bankruptcy car finance, you will need to provide several items in order to provide both proof of income and identity. These include:

  • Your passport – As long as it is up to date and valid, you passport is easily the quickest and simplest way of providing a lender with proof of your identity – and it’s something that any lender will need to see as part of your application.
  • Payslips – You will also need to provide proof of income, which is where your payslips come in. Finance obviously plays a major role in deciding whether you will be found eligible for a car finance deal, so being able to provide evidence of your income through providing a payslips will give the lender a much clearer picture of your available income and what kind of loan repayments will be manageable for you.