| |
Leasing after a Bankruptcy; obtaining a bankruptcy auto loan does not have to be as difficult as the
By John Preston
I've always chuckled at the reactions I receive when
people ask about bankruptcy auto loans, and I
suggest they be open to leasing. The looks I get are a
cross between ¡°are you kidding?¡± and ¡°what did you
just call me?¡±
Leasing has undergone a change in popularity since its
inception. In the beginning, everyone purchased cars
outright¡they could do this because a) buying a car on
time was not an option, b) because cars cost much less
then than they do now.
As options were added to cars, such as color, 2-doors
or 4-doors, 5-speed or automatic, am radio or 8-track
(oh, am I dating myself here?), vehicle prices begin
increasing. Auto loans terms came out at 12
months¡moving up quickly to 24 months¡36
months¡and soon it became apparent that cars were
costing more than people could afford.
In stepped the leasing option. It was a neat program
at first. You would go in, negotiate a payment with the
auto dealer calculating the suggested residual value at
the end of the lease. You were soon the proud renter
of that vehicle.
The popularity of this method spread like wildfire¡.until
it became snuffed out when the first lessees drove
back in years later to drop off their cars. That residual
value, the value that their vehicle was supposed to be
worth was much higher than what it actually turned
out to be¡..and people were told they needed to come
up with thousands in order to drop off their vehicles.
As you can imagine, ¡°open-ended leases¡± such as
those (where the vehicle's value would be ascertained
when you came to drop off your car at the end of the
lease, rather than set in stone as they are now in
¡°closed-end leases¡±) became about as popular as a
electric shock therapy in the rain.
So, purchasing vehicles was back in vogue. And, just
like in high school economics, the prices of the cars
increased faster than the incomes of those who
wanted them¡.and soon terms increased to 48
months.
Today, a 60 month loan is commonplace, with people
signing up for 72 and 84 month loans without batting
an eye. So, not surprisingly, leasing was given a
second look, has been restructured, and is now an
option for people to get the best of both worlds.
People can get a brand new (or slightly used¡yes,
they even lease used cars now too!) vehicle for a
reasonable payment.
So, how does this relate to me, you ask? I thought
you had to have stellar credit in order to lease.
Enter the world of the
bankruptcy auto
loan!
This was the case until about 8 years ago. Banks were
finding that there were many people with sub-prime
credit that needed car loans or a bankruptcy auto loan.
For years, if you had bad credit, or required a
bankruptcy auto loan, you were charged a hefty
interest rate if you wanted their loan, take it or leave
it.
Well, funny thing about interest rates. The higher the
rate, the more interest you pay out in the first years of
your bankruptcy auto loan term¡.the less you pay to
principle. This simple fact means, if after 1 year of
paying on this bankruptcy auto loan the person finds
themselves unable to continue making payments¡.the
amount of money they still owe on their vehicle is still
very high because such a small percentage of their
payments have been going towards principle.
Those lucky banks that had been counting their money
with their greasy fat fingers, suddenly found
themselves a year later stuck with repossessed cars
that still had huge balances owed on them.
How does this affect you? Banks and manufacturers
have devised a way that everyone benefits from
leasing. Someone who does not qualify for a prime
rate, and in fact requires a bankruptcy auto loan can,
depending on the lender's guidelines, lease a new or
newer vehicle.
The lender is happy because you are given a shorter
term (generally 36 months) to pay on the vehicle. The
end value is fixed (¡°closed-end leases¡± I spoke of
earlier) and backed out of the loan amount, so you are
only paying on your 3 years of use.
The interest paid is based on 3 year usage, not on the
whole value of the car, so you pay down your principle
faster. And, if the worst case happens and the car
gets repossessed, the lender is in a better position
with regard to the vehicles loan balance and current
value.
What does this mean to you?
You can obtain a new or nearly-new vehicle and
bankruptcy auto loan for a reasonable payment, a
shorter loan term, and all the benefits of things like
bumper to bumper warranty¡things that are not
always available when you purchase a vehicle through
a dealership, and definitely not available when you
purchase from a private party.
Obtaining a bankruptcy auto loan, and even a lease
can get you on the right track immediately.
I've gone through a lot of information here. I
encourage you to learn more about obtaining a
bankruptcy auto loan; ask more, and educate yourself
in the insider methods and strategies I and my
colleagues teach by signing up for membership at
www.creditiskey.com. You will benefit from my and
others' years of educating people in various aspects of
rebuilding your credit after a bankruptcy as well as
how to obtain a bankruptcy auto loan.
I'll see you there!
John Preston
I've always chuckled at the reactions I receive when
people ask about bankruptcy auto loans, and I
suggest they be open to leasing. The looks I get are a
cross between ¡°are you kidding?¡± and ¡°what did you
just call me?¡±
Leasing has undergone a change in popularity since its
inception. In the beginning, everyone purchased cars
outright¡they could do this because a) buying a car on
time was not an option, b) because cars cost much less
then than they do now.
As options were added to cars, such as color, 2-doors
or 4-doors, 5-speed or automatic, am radio or 8-track
(oh, am I dating myself here?), vehicle prices begin
increasing. Auto loans terms came out at 12
months¡moving up quickly to 24 months¡36
months¡and soon it became apparent that cars were
costing more than people could afford.
In stepped the leasing option. It was a neat program
at first. You would go in, negotiate a payment with the
auto dealer calculating the suggested residual value at
the end of the lease. You were soon the proud renter
of that vehicle.
The popularity of this method spread like wildfire¡.until
it became snuffed out when the first lessees drove
back in years later to drop off their cars. That residual
value, the value that their vehicle was supposed to be
worth was much higher than what it actually turned
out to be¡..and people were told they needed to come
up with thousands in order to drop off their vehicles.
As you can imagine, ¡°open-ended leases¡± such as
those (where the vehicle's value would be ascertained
when you came to drop off your car at the end of the
lease, rather than set in stone as they are now in
¡°closed-end leases¡±) became about as popular as a
electric shock therapy in the rain.
So, purchasing vehicles was back in vogue. And, just
like in high school economics, the prices of the cars
increased faster than the incomes of those who
wanted them¡.and soon terms increased to 48
months.
Today, a 60 month loan is commonplace, with people
signing up for 72 and 84 month loans without batting
an eye. So, not surprisingly, leasing was given a
second look, has been restructured, and is now an
option for people to get the best of both worlds.
People can get a brand new (or slightly used¡yes,
they even lease used cars now too!) vehicle for a
reasonable payment.
So, how does this relate to me, you ask? I thought
you had to have stellar credit in order to lease.
Enter the world of the
bankruptcy auto
loan!
This was the case until about 8 years ago. Banks were
finding that there were many people with sub-prime
credit that needed car loans or a bankruptcy auto loan.
For years, if you had bad credit, or required a
bankruptcy auto loan, you were charged a hefty
interest rate if you wanted their loan, take it or leave
it.
Well, funny thing about interest rates. The higher the
rate, the more interest you pay out in the first years of
your bankruptcy auto loan term¡.the less you pay to
principle. This simple fact means, if after 1 year of
paying on this bankruptcy auto loan the person finds
themselves unable to continue making payments¡.the
amount of money they still owe on their vehicle is still
very high because such a small percentage of their
payments have been going towards principle.
Those lucky banks that had been counting their money
with their greasy fat fingers, suddenly found
themselves a year later stuck with repossessed cars
that still had huge balances owed on them.
How does this affect you? Banks and manufacturers
have devised a way that everyone benefits from
leasing. Someone who does not qualify for a prime
rate, and in fact requires a bankruptcy auto loan can,
depending on the lender's guidelines, lease a new or
newer vehicle.
The lender is happy because you are given a shorter
term (generally 36 months) to pay on the vehicle. The
end value is fixed (¡°closed-end leases¡± I spoke of
earlier) and backed out of the loan amount, so you are
only paying on your 3 years of use.
The interest paid is based on 3 year usage, not on the
whole value of the car, so you pay down your principle
faster. And, if the worst case happens and the car
gets repossessed, the lender is in a better position
with regard to the vehicles loan balance and current
value.
What does this mean to you?
You can obtain a new or nearly-new vehicle and
bankruptcy auto loan for a reasonable payment, a
shorter loan term, and all the benefits of things like
bumper to bumper warranty¡things that are not
always available when you purchase a vehicle through
a dealership, and definitely not available when you
purchase from a private party.
Obtaining a bankruptcy auto loan, and even a lease
can get you on the right track immediately.
I've gone through a lot of information here. I
encourage you to learn more about obtaining a
bankruptcy auto loan; ask more, and educate yourself
in the insider methods and strategies I and my
colleagues teach by signing up for membership at
www.creditiskey.com. You will benefit from my and
others' years of educating people in various aspects of
rebuilding your credit after a bankruptcy as well as
how to obtain a bankruptcy auto loan.
I'll see you there!
John Preston
Join the Credit Is Key membership website and receive a FREE e-course to use
our proven strategies to rebuild your credit and click now to find out how you can obtain a
bankruptcy auto loan.
About the Author
John Preston, Auto Loan Expert with www.creditiskey.org, has been in the auto industry for 8 years. Before that, he had a mortgage brokerage outside Seattle, Washington. He has helped literally thousands of people obtain a car loan after bankruptcy. Being a resource for Credit Is Key has given John the ability to help even more people with his unique credit-rebuilding strategies, while being able to spend more time with his family.
Article Source: http://www.simplysearch4it.com/article/20550.html
| If you wish to add the above article to your website or newsletters then please include the "Article Source: http://www.simplysearch4it.com/article/20550.html" as shown above and make it hyperlinked. |
| |
|
