Living in Canada can be challenging, especially when your credit isn’t good. We all need a car, this is not a “want” but an actual “need”, since Canada is such a large country and the mass transit system infrastructure is not able to meet our requirements.
Buying a car with low credit score in Canada is unfortunately very difficult.
With the average price of a new car well over $40,000, if you are having credit issues, then your best option may be a used car but even the prices of previously owned vehicles has risen dramatically this year.
Credit scoring: where do you stand
Depending on whether you are using Equifax or TransUnion, your score can range from 300-850, the higher your score, the more credit worthy you appear to be.
Generally, if your credit score is over 680, you would qualify for most credit products at very competitive terms. This category is usually referred to as “prime”.
If your credit score ranges from 620-679, then you are Alt-A, which is neither prime nor subprime. In this range, you can get a car loan but the interest rate will not be very competitive.
Should your credit score fall under 620, then you are in subprime territory, most lenders will turn down your application for an Ancaster car loan. Those that would approve your loan, would charge you a high interest rate to offset their risk.
Since the interest rate being charged for these subprime loans is high, it reduces the maximum car loan you could receive, so you would only qualify to buy a previously owned car.
Understanding why you have credit issues
You should invest some time to understand why your credit score is not where it needs to be. Have you recently come out of a consumer proposal? Or did you lose your job because of the pandemic?
There must be a reason why your credit score is low, you must understand the root cause of the problem so you can start taking action to fix it.
Get your credit report for free from TransUnion and Equifax. If you are not able to make heads or tails of these reports, you can seek out the advice of an auto financing credit expert. This is not something you want to research on your own, you need to speak with a local credit expert at your nearest car dealership.
These experts are going to show you how to safely raise your credit score. The dealership also has the ability to help you find lenders who will give you a car loan, even when you have bad credit.
If you follow the advice the dealership credit experts provide, buying a car with low credit score should be much easier. The good news is one your credit score rises, you can upgrade your current vehicle to something newer and get a lower interest rate car loan in the process.
This is how you can start buying a car with low credit score, so contact the dealership now.
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!
For any questions or concerns, please don’t hesitate to contact us here!