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Buying a car when your budget is extremely limited

Posted by on Jun 22, 2022 - Archived under Bad Credit Car Loan Tips

To live a normal life in Canada outside major metropolitan areas such as the GTA, you will require a vehicle.

During the Covid-19 pandemic, most of us have grown accustomed to working from the comfort and safety of our home.

Working from home was preferable to not being able to work at all, but you’ll need a dependable car to commute to the office once it reopens.

The prices of both new and used automobiles are rising

Since the start of the pandemic, the average price of a new vehicle in Canada has increased considerably. With inflation at record highs in Canada, the price of a new automobile may now easily exceed $35,000, and it will continue to grow.

Once upon a time, used automobiles could be purchased at a reasonable price, but those days are long gone and used automobile prices are currently at all-time highs.

How can you obtain a vehicle loan if you have limited funds?

If you have decent credit, obtaining a vehicle loan is surprisingly simple if you follow the proper steps.

Checking your credit score to determine whether you fall into the prime or subprime categories could be helpful.

Those with a score greater than 700 qualify for the highest tier.

CreditKarma provides access to your TransUnion credit score, but you should also check your Equifax credit score for free.

Car finance companies are flush with cash and must issue a large number of loans to satisfy their sales objectives.

When interest rates go up, lenders have to spend more revenue on securing financing, and the number of lenders they can issue loans to decreases; this forces the lender to reduce overhead and

You can obtain a vehicle loan even if your credit score is below 650, but you won’t be able to get those types of deals from online lenders.

While your credit score is crucial, lenders are concerned about the overall health of the economy.

These lenders are unwilling to lend to someone who lacks a stable income source.

As long as you are not in a consumer proposal or bankruptcy, lenders will disregard the majority of your credit issues if you have been employed for a few years in an industry resistant to the epidemic, such as healthcare.

Most Canadians live from paycheck to paycheck

Most Canadians are in substantial debt and may find it difficult to save for a new vehicle.

Consequently, lenders will typically extend the duration of your auto loan to seven years.

The more time you have to repay the loan, the lower your monthly payments will be, which is great for your finances.

You must go through a local dealership to secure these bad credit auto loans; they often work with these lenders and can help you obtain a loan.

Additionally, the dealership can offer guidance on how to enhance your credit score. All of these resources are at your disposal, but, to get the ball moving, you will need to visit the dealership. Gas prices may soon approach $3.00 per litre, so now may be a good time to make the switch from your gas-guzzler to an electric vehicle.

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!

Let’s get in touch! 

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