A client sent me a letter he got from a car dealership touting the financing he can get even though he is currently in bankruptcy.  You can find a copy of the letter here.

How does a car dealer think of a person going through bankruptcy? Desperate? A victim?  I do not see any financing terms here.  However, I would almost guarantee that this is not a good deal for anyone.  I have seen financing companies impose 8 percent interest on car loans – per month.  That’s almost 100 percent per year.  The letter suggests getting rid of your current car and getting a new one, so that you can re-establish your “good” credit.

A good credit rating, of course, just means that you will pay less to borrow money in the future.  I recommend that my clients avoid borrowing a lot of money after bankruptcy, because borrowing got them into trouble in the first place.  When there is a real need to re-establish credit, there are better ways than to buy a new car on credit.  Take a look at this article for better ideas.

So the first good reason to avoid this solicitation is because it is unlikely to be a good deal.  The second reason? This guy is in Fontana. I don’t care if you are bankrupt; I don’t want my clients to need to go to Fontana for a car.

September 4, 2014

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