It is possible to get a car loan with a repossession on your credit report. It is not easy, but it is possible.
The First Six Months after Repossession
The first thing a lender is going to look at is how long it has been since the repossession and whether you have been making all of your other payments on time since the repo. It is almost impossible to get a car loan within six months of any major negative action such as a foreclosure or repo. That is actually good for you in some ways. This will give you time to get yourself on firm footing financially, and it gives you time to save the sizable down payment that you will be required to make in the future. You may want to obtain a secured credit card during that period of time. This will allow you to establish positive payment history after the repo. These cards are different from prepaid cards in that they are reported to the major credit reporting agencies, thus boosting your credit score.
Working with a Subprime Auto Lender
After making on-time payments for six to 12 months, you should find it much easier to get a car loan, so long as you understand that you will need a bad credit auto loan. This will require some research and you may need to apply online for a loan through a service like ours, as most banks and credit unions do not work with people who have credit scores in this range. You will need at least twenty percent of the total purchase price as a down payment, and you will face a higher interest rate than you would if your credit history was clear. The APR you’re quoted will depend on your actual credit score, but rates of 10-18% are common. Given such rates, it is best to finance your vehicle for the least amount of time possible. This will minimize how much you pay in total interest, effectively reducing the overall price of your new car or truck.