The Marketers’ Senate

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
outrightthey 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 monthsmoving up quickly to 24
months36 monthsand 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 usedyes, 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 warrantythings 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.