How to Get a New Car After a Repossession

In 2008, the number of vehicle repossessions in the United States rose 10 percent from the year prior to 1.6 million. As a result of the decline in the economy and with more Americans defaulting on their car loans, car repossessions have been on the rise. The best advice is to avoid auto loan default in the first place; however, for people who have experienced a repossession and are working toward financial recovery, it's still possible to obtain a new auto loan.

Instructions

1

Open a savings account and begin saving money toward your car loan. Putting 20 percent down on your new car will show the financial institution that you will be responsible for this loan.

2

Obtain your credit score from Equifax, Experian and TransUnion. Contact each credit firm individually and ask them include a note to your history as to the reasoning behind your last repossession. If it was due to an illness or job loss, the next car loan may be a bit more lenient and forgiving.

3

Wait to purchase your vehicle. If you have the ability to use public transportation or to borrow a friend or family member's vehicle before purchasing a new car, do so. The longer you wait between repossession and the purchase of a new car, the lower interest rates you may have.

4

Provide verification to the car dealership that you have a stable monthly income and bank account so that they can ensure that you will make your payments in full and on time.

5

Prepare yourself for high payments and interest rates. Because of the repossession, you will be penalized by many car dealerships and loan distributors. By taking necessary steps in good faith, auto loan givers may be more forgiving to you.