| I've always chuckled at the reactions I | | | | their loan, take it or leave it.Well, funny |
| receive when people ask about bankruptcy auto | | | | thing about interest rates. The higher the |
| loans, and I suggest they be open to leasing. | | | | rate, the more interest you pay out in the |
| The looks I get are a cross between | | | | first years of your bankruptcy auto loan |
| “are you kidding?” and | | | | term….the less you pay to principle. |
| “what did you just call | | | | This simple fact means, if after 1 year of |
| me?”Leasing has undergone a change in | | | | paying on this bankruptcy auto loan the |
| popularity since its inception. In the | | | | person finds themselves unable to continue |
| beginning, everyone purchased cars | | | | making payments….the amount of money |
| outright…they could do this because a) | | | | they still owe on their vehicle is still very |
| buying a car on time was not an option, b) | | | | high because such a small percentage of their |
| because cars cost much less then than they do | | | | payments have been going towards |
| now.As options were added to cars, such as | | | | principle.Those lucky banks that had been |
| color, 2-doors or 4-doors, 5-speed or | | | | counting their money with their greasy fat |
| automatic, am radio or 8-track (oh, am I | | | | fingers, suddenly found themselves a year |
| dating myself here?), vehicle prices begin | | | | later stuck with repossessed cars that still |
| increasing. Auto loans terms came out at 12 | | | | had huge balances owed on them.How does this |
| months…moving up quickly to 24 | | | | affect you? Banks and manufacturers have |
| months…36 months…and soon it | | | | devised a way that everyone benefits from |
| became apparent that cars were costing more | | | | leasing. Someone who does not qualify for a |
| than people could afford.In stepped the | | | | prime rate, and in fact requires a bankruptcy |
| leasing option. It was a neat program at | | | | auto loan can, depending on the lender's |
| first. You would go in, negotiate a payment | | | | guidelines, lease a new or newer vehicle.The |
| with the auto dealer calculating the | | | | lender is happy because you are given a |
| suggested residual value at the end of the | | | | shorter term (generally 36 months) to pay on |
| lease. You were soon the proud renter of | | | | the vehicle. The end value is fixed |
| that vehicle.The popularity of this method | | | | (“closed-end leases” I spoke of |
| spread like wildfire….until it became | | | | earlier) and backed out of the loan amount, |
| snuffed out when the first lessees drove back | | | | so you are only paying on your 3 years of |
| in years later to drop off their cars. That | | | | use.The interest paid is based on 3 year |
| residual value, the value that their vehicle | | | | usage, not on the whole value of the car, so |
| was supposed to be worth was much higher than | | | | you pay down your principle faster. And, if |
| what it actually turned out to be…..and | | | | the worst case happens and the car gets |
| people were told they needed to come up with | | | | repossessed, the lender is in a better |
| thousands in order to drop off their | | | | position with regard to the vehicles loan |
| vehicles.As you can imagine, | | | | balance and current value.What does this mean |
| “open-ended leases” such as those | | | | to you?You can obtain a new or nearly-new |
| (where the vehicle's value would be | | | | vehicle and bankruptcy auto loan for a |
| ascertained when you came to drop off your | | | | reasonable payment, a shorter loan term, and |
| car at the end of the lease, rather than set | | | | all the benefits of things like bumper to |
| in stone as they are now in “closed-end | | | | bumper warranty…things that are not |
| leases”) became about as popular as a | | | | always available when you purchase a vehicle |
| electric shock therapy in the rain.So, | | | | through a dealership, and definitely not |
| purchasing vehicles was back in vogue. And, | | | | available when you purchase from a private |
| just like in high school economics, the | | | | party.Obtaining a bankruptcy auto loan, and |
| prices of the cars increased faster than the | | | | even a lease can get you on the right track |
| incomes of those who wanted them….and | | | | immediately.I've gone through a lot of |
| soon terms increased to 48 months.Today, a 60 | | | | information here. I encourage you to learn |
| month loan is commonplace, with people | | | | more about obtaining a bankruptcy auto loan; |
| signing up for 72 and 84 month loans without | | | | ask more, and educate yourself in the insider |
| batting an eye. So, not surprisingly, | | | | methods and strategies I and my colleagues |
| leasing was given a second look, has been | | | | teach by signing up for membership at You |
| restructured, and is now an option for people | | | | will benefit from my and others' years of |
| to get the best of both worlds.People can get | | | | educating people in various aspects of |
| a brand new (or slightly used…yes, they | | | | rebuilding your credit after a bankruptcy as |
| even lease used cars now too!) vehicle for a | | | | well as how to obtain a bankruptcy auto |
| reasonable payment.So, how does this relate | | | | loan.I'll see you there!John Preston, Auto |
| to me, you ask? I thought you had to have | | | | Loan Expert with has been in the auto |
| stellar credit in order to lease.Enter the | | | | industry for 8 years. Before that, he had a |
| world of the | | | | mortgage brokerage outside Seattle, |
| | | | Washington. He has helped literally thousands |
| bankruptcy auto loan!This was the case until | | | | of people obtain a car loan after bankruptcy. |
| about 8 years ago. Banks were finding that | | | | Being a resource for Credit Is Key has given |
| there were many people with sub-prime credit | | | | John the ability to help even more people |
| that needed car loans or a bankruptcy auto | | | | with his unique credit-rebuilding strategies, |
| loan.For years, if you had bad credit, or | | | | while being able to spend more time with his |
| required a bankruptcy auto loan, you were | | | | family. |
| charged a hefty interest rate if you wanted | | | | |