February 2, 2006

Hi Tony,

In May of 2004 I lost my job and I was unable to find work until April of 2005. As you can imagine . . . my credit took a big hit during the time I was out of work.

Not only that but my wife and I had our 3rd child in December of 2004, and had to move into a bigger house (which we rent for $1200 a month).

In August of 2005 we decided to file for bankruptcy and we included 2 vehicles on the bankruptcy. All in all we discharged nearly $30k in car loans.

Now I don't have a car. I'm using a car I borrowed from my friend and he needs it back. I've been looking over your website and I've tried all your links to find an auto lender that would work with me but I've come up dry so far. I have the following strikes against me:

• A bankruptcy which was finally discharged in December
• Less than 1 year on the job
• Less than 1 year in my current residence
• 4 dependents including my wife
• A credit score of about 504 with a couple of current discrepancies

From a buyers stand point I can't get even mediocre financing and I need a car right away.

I spoke with a guy who works with cases like mine at Brad Barker Honda in Decatur, IL. He's already trying to nail me with a payment, speaking in terms of percentages of my income.

I told him I didn't think they would try to screw me so soon . . . but he assured me the "lenders would protect me" and he would give me all the paperwork necessary to ensure I would get the best price on a car.

I told him we'll see.

I need a car fast, but I am still going to do a 2 or 3 visit approach so I can research the vehicle I'm looking at (I'm 1 hour away from the dealership.)

Do you have any tips you can give me?

Thanks for all your hard work,

Dejuan

Answer:

Hi Dejuan,

The first thing I would advise you to do is to NOT go near this guy at Brad Barker Honda. It is such bull crap for him to say "the lenders would protect you!"

In fact stay away from all Special Finance guys at new car dealers. Trust me when I tell you they do not have your best interests at heart. I used to be a Special Finance Manager . . . I know what I'm talking about!

Why don't you check out some "Buy Here - Pay Here" used car dealers? Most of them will let you make payments without worrying too much about your credit rating. You may not be able to get as new or as nice a car as you would like, but I'm sure you can find something that will be serviceable for 2 or 3 years.

Ideally, what you should really do is to try to save up $1,500 to $2,000 and look for something decent that you can just pay cash for. Again - it won't be a new car but there are plenty of decent cars out there that you can buy for $2,000. I've purchased many cars in that price range that served me well.

This way you don't have to worry about payments or somebody repossessing your car if you can't make a payment. Plus, all you need is liability insurance to be legal.

If you don't change your mindset from getting a car loan through a car dealer you are never going to get your head above water. You must change your way of thinking about this car stuff, and work at getting your financial situation more stable.

You don't have to get a car loan to have a reliable vehicle.

Good luck . . .

All my very best . . .

Tony Iorio