You can buy a car while in Chapter 13, with court approval, to provide needed transportation. If you find you need to buy a car, do the following:
1. Do a little shopping. Look around to see what you can get for a payment you can afford. I have had the Chapter 13 Trustee approve car loans in amounts from $150 per month to $450 per month. Use these payments as a rule of thumb. Remember, payments are made outside Chapter 13, directly to the lender. Many lenders do not want to work with you until you have court approval. Work through this if you can. You need to get an idea of what you can buy with a monthly payment you can afford, and you need to know if you will need a down payment. Don’t forget to bring a pay stub for you and your husband if you are married when you come in to seek permission.
2. Once you have done your shopping, gather current pay stubs for yourself (and your spouse if you are married). Then sit down and prepare a budget to see if you can afford to add a car payment to your present budget.
3. After careful review of you budget, make an appointment to come to the office to redo your budget and request court approval. Remember, the trustee requires you to supply proof of purchase within 45 days of approval. If you do not follow through with the purchase once approved, your Chapter 13 payment will be increased to absorb the additional funds in your budget.