If you’ve stumbled into this article, you’re likely frustrated since there are so many websites devoted to car buyers with outstanding or poor credit.
Still, nobody talks about how to buy a car in Canada with no credit. We have done all of the heavy lifting and will show you the path forward.
Most common reasons you don’t have a strong credit score
Nearly everyone in Canada has a credit score, if you own a smartphone, you may have purchased a phone line and received a “free” mobile.
Your credit score can be negatively affected if you fail to pay your phone bill on time.
On the other side, timely payment of your bills will boost your credit score. The only acceptable justification for not having a credit score is being a recent high school graduate or a new Canadian; nonetheless, not having credit will not prevent you from obtaining a car.
Having the right mindset is key
Before you begin your search for a vehicle, you must set realistic expectations. Because you lack a credit history, you’ll have to negotiate with lenders who specialize in bad credit.
A loan to a person with no credit history poses a larger risk than one to a person with a strong credit score. These lenders will charge a higher interest rate to reduce their risk.
Your pay interest rate influences the total amount of money you can borrow for a new vehicle. Due to the fact that these lenders will charge you a higher interest rate, you may need to select a less expensive automobile.
The simplest way to boost your credit score (no gimmicks involved)
Once you obtain your card, you can begin using it and making payments on schedule. Your credit score will soar within a few months.
How to finance the purchase of your new vehicle
If you need a vehicle today and cannot wait for your credit score to improve, you may qualify for a bad credit auto loan. You should consider visiting a car dealership. The dealership provides a variety of vehicles for test drives.
The test drive is super important; this is the only tangible way you can determine with a measure of certainty whether a particular vehicle is the right one for you.
The dealership has contacts with lenders to meet the borrowing needs of all of its customers, including those with no credit.
The potential lender does not utilize your credit score to determine whether or not you are a good risk. Instead, these lenders will evaluate your current income and commitments; if you have a substantial amount of debt or a new job, they may require a cosigner.
A cosigner is a creditworthy someone who pledges to repay the lender if the borrower defaults on the loan.
You can buy a car even if you have no credit, but it will be much easier if you begin establishing credit immediately.
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!