Repossession Loan Programs

Is It Possible To Get
An Auto Loan After A Repo?

Some car buying questions from Tamara in Detroit about
repossession loan programs and the approval process.

Hi Justin,

I had a car that was repossessed, but I eventually paid it off. Would I be able to get another auto loan or am I stuck? What kind of interest rate can I expect if it is possible to get approved? Lastly, if it is possible to get a loan, where would I apply?

Thanks,
Tamara

Answer:

Hi Tamara,

It is definitely possible to buy a car after a repossession, but there are some things you'll need to be aware of and you'll need to work with a dealership that specializes in these types of loans.

Dealerships that specialize in this area will have lenders with repossession loan programs, some with more favorable terms and some with less favorable terms.

Common Repossession
Loan Program Terms

Money Down
One thing to keep in mind is that cash is king when buying a car after a repossession. This does not mean you have to have a huge down payment, but it will help to give you more options as to what you can buy.

In addition, the more money you can put down the less risk the lender takes on, so they will be more likely to approve you and to approve you with better rates.

I've been able to get people approved for auto loans with as little as $300 down, but I had to pick the car for the customer, because we only had one that fit for the approval.

How Long Has It Been?
The more time that has gone by, the better. Lenders that will give better approvals will want your repossession to be at least two years old, but in your case you've actually settled the debt, so this may not apply to you. Just be sure to bring proof that the account has been settled.

Even if you hadn't paid it off and your repo was yesterday, you could still get approved. I've been able to get approvals for customers that let their old car go back the same day they bought their new one.

Interest Rates
This is a bit more difficult to narrow down as there is more to determining this than meets the eye. All in all, I'd say that the average rates for a repossession loan program are going to fall in the 16-24% range. Again, there are a lot of factors (some covered above) that determine this.

Where to Apply
for a Repossession Loan

As mentioned above, you'll need to work with a dealership that specializes in bad credit auto loans, because lenders don't generally lend directly to the customer in most cases involving prior repossessed vehicles.

I recommend using Instant Car Loan. They will accept your application and forward it to a dealership in your local area that specializes in bad credit auto loans.

If there are no dealers in your area to help, don't worry, your credit won't be pulled. They are a subsidiary of CarsDirect (very big), so it's more than likely they will have a partner dealer in your area. You can apply here: Bad Credit Car Loans!

Hope this helped and you're able to find a repossession loan program that works for you. Please don't hesitate to get back in touch with me if you have more questions...Justin

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