Buying a car with good credit can be challenging, but a car loan with low credit score can seem nearly impossible. Lenders are concerned about issuing non-performing loans and have tightened up their underwriting;
The good news is you can get approved for a car loan with low credit score in Canada, but you will need to follow our suggestions.
It is a car seller’s market
The car market is in uncharted territories; there are now more buyers looking to purchase a car than vehicles to meet that demand. This is not a situation unique to Canada; this demand is felt all over the world.
The high demand for a car means everyone has to pay more, but even offering higher prices does not guarantee you will get the precise car you want with good credit, let alone bad credit.
Go for a used car
Your best option if you have bad credit is to try and purchase a used car. Traditionally, the interest rates on used cars are higher than new cars, so you will be paying more right from the onset.
The upside to buying a used car is being able to get the vehicle right away, and you can find a bargain, but you will need to roll up your sleeves.
While your first instinct may be to buy a used car from a private seller, we strongly advise against doing that.
When you buy from a private seller, there is no guarantee the vehicle is going to be “as advertised” even if you check the CarFax, there could still be issues with the vehicle.
When you buy a car through a licensed dealership, you have peace of mind knowing the dealership has to follow a strict code of conduct, and you can review their track record by looking at customer reviews.
Reviewing the causes of your bad credit
You need to spend some time reviewing your credit report to figure out the root cause of your bad credit.
Chances are the reason your credit is bad (bad range is anything below 600) is due to you not making your payments on time.
The pandemic has caused a considerable amount of economic hardship, if you fall behind on your bills, you are not alone, but you must start taking proactive steps to rebuild your credit.
Your credit score will improve, but you will need to give yourself time while the score updates. While you are waiting for your credit score to improve, you can start looking for used cars right away.
How to get a Car Loan with Low Credit Score fast
A licensed dealership is the easiest and quickest way to get a bad credit car loan. These dealerships have the ability to negotiate your loan with prospective lenders and get you approved even if the situation seems impossible.
While working with the dealership, they will show you how to rebuild your credit and qualify for a prime interest rate car loan in 12-24 months.
So, you really should contact your local car dealership today before there are even fewer cars available for you to test drive.
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!