Cars are one of the greatest inventions outside of sliced bread. They are almost essential for our daily lives, especially for those of us that do not live or work near a bus stop. Cars allow us the freedom to go anywhere we want when we want. The problem with cars is that they are expensive. Not only the purchase price, but maintenance on a car can be very costly. Let’s talk about both of those factors.
Purchasing a new vehicle is either very exciting or dreadful. There doesn’t seem to be any in between. For those with great credit and the funds to put down a significant down payment, buying a car is filled with elation. For those with poor credit and little extra money for a down payment, there are little options. Most people with poor credit are forced to purchase a vehicle from a “buy here, pay here” dealership. These loans have very high interest rates and relatively high payments for a vehicle that is less than reliable. I’ve seen clients with a car worth $3,000.00, but they end up paying almost $10,000.00 over the life of the loan. That’s crazy! We aren’t even talking about any maintenance associated with the car, just paying the loan.
The maintenance on a car from a “buy here, pay here” dealership is likely to cost a lot more than cars purchased from any other source. This is largely due to the fact that these types of dealerships sell lemons. These cars were purchased by them cheap and in poor condition; most of the time the dealer only fixes the car enough to make sure it starts. This often leaves the buyer with a car that needs some major repair within the first few months.
Cars are great, but there is a limit on how much a person can sacrifice for something that may last only a few months. It rarely makes since for a person that is filing bankruptcy to keep a car that they purchased from a “buy here, pay here” dealership. A person filing a Chapter 7 bankruptcy can get rid of the lemon and the awful that is attached to the vehicle. Car loans are usually very easy to get after filing if need be. If you purchased your car through a “buy here, pay here” dealership, talk to your bankruptcy attorney about your options.