Make no mistake, buying a car after bankruptcy is no easy task. One of the consequences of going bankrupt is that you will have a harder time getting a loan, and when you do, it will be at a higher rate than the average Joe on the street.

But don´t get me wrong, you can buy and finance a car even if you have poor credit as a result of filling for bankruptcy.  In the current economic environment of very slow car sales, this will work in your favor if you end up financing at the dealer.

I will be outlining some of the challenges and questions you should be asking yourself before going out an buying a new car.  I will also give you a few tips to increase your chances of getting the right loan for the car you want.

Filling for bankruptcy is not the end of the world, and sometimes is consequence of unfortunate situations, but you can surely understand why lenders are reluctant to lend to you.

There are lenders that specialize in lending to borrowers with a bankruptcy filling in their record. But before you approach a lender for a loan, you should have already started repairing your credit.

Along with online lenders and specialty local lenders, you can also negotiate with the car dealership where you plan on buying the car.

Since different lenders have different requirements, shopping for you auto loan online can be extremely convenient. Some lenders might require than the bankruptcy be discharged or that you have no incidents (repossessions) within the previous year. Obviously you also have to meet certain age and income requirements.

Here are some of the thing you should consider doing before buying a car:

• Try increasing you credit score - Take out a collateralize credit card for example and make some timely payments. You should also verify that the information is being reported to one of the major credit agency. If possible, also try to get a small, unsecured loan from a local bank.
  
• Try having a loan pre-approved before negotiating with the dealership. This will be helpful in getting the best price possible for the car.
• Consider getting a co-signer for the loan.  Remember that the co-signer will be held responsible for the loan should you fail to make payment.
  
• Negotiate the price of the car FIRST than negotiate the loan deal. Chances are the dealer pulled your credit report already. If he is still talking to you its because he can close on a loan.
  

Before you make your final decision on your car loan, you should also consult the Better Business Bureau for any complaints against the lender.

One other option you might consider for your car loan is joining a credit union.  Credit unions offer their members above average deals on car loans.  You can qualify for these loans if your bankruptcy is over one year old and you are incident free since the filling.

Consider searching online to find a credit union where you live.  You will be asked to fill out a form with questions to match you with a credit union.

Although buying a car after bankruptcy might be very important for you to regain your footing, don´t settle for a loan that has an excessive interest rate, or any kind of abusive clause, such as excessive late payment and pre-payment penalties.

Don´t limit yourself to looking solely at the monthly payment amount, compare the life of the loan. Depending on the age of the car, you don´t want the life of the loan to extend beyond the life of the car.

Finally, you should consider if buying a car after bankruptcy is the right thing to do. Can you wait a little longer? Can you settle for a much lower priced used car?

Consider these questions one last time before starting the search for your car and loan.

Before I recommend some related reading, I would also suggest you join the life after bankruptcy website. It contains a lot of useful information for people starting over after bankruptcy.

Other reading you might want to do:

• Where to sell your junk Car
• Adverse credit remortgages
• Bad credit Remortgages
• Stopping foreclosure on your home
  
• Getting a bad credit home loan