Blog

How to get a car loan after going through a nasty divorce

Posted by on Jun 24, 2022 - Archived under Bad Credit Car Loan Tips

Divorce is a taboo subject because no one wants to talk about it, but it occurs in nearly half of all Canadian marriages, not including common-law unions. If you are going through or have recently gone through a nasty divorce and need to purchase a vehicle, there are a few things you must bear in mind in order to successfully navigate this new reality.

You aren’t the first nor the last person to go through this

One of the greatest obstacles you will confront is a sense of isolation as if the world doesn’t care about you. This is not a sign of weakness or a loser mentality; your life has undergone a major transformation; therefore, it is natural for you to worry as you adjust to this new reality.

After a divorce, your finances will take a significant hit, and alimony, child support, and legal bills will quickly devour your income. All of these expenses affect the maximum auto loan amount you can qualify for; lenders will not authorize a car loan if your obligations surpass forty percent of your income before taxes.

There are a few things you can do right now to assess your chances of obtaining an auto loan today

Do you make a good living? Perhaps you were a stay-at-home parent or did not work full-time during the marriage. Your income may not be large or adequate to qualify for an auto loan. You should have been employed for a minimum of ninety days and have sufficient income to fulfill your basic necessities, plus the automobile payment.

What is your credit score currently? Utilizing free services such as Credit Karma to monitor one’s credit score is fiscally sensible.

There is a considerable likelihood that your credit score declined during and immediately following the divorce; a lower credit score implies you’ll pay a high interest rate on anything you finance. A decent credit score is anything above 680, so you will need to work diligently to lower your debts while making sure they are paid on time.

Reach out to the experts for guidance

Never attempt to obtain a car loan on your own; you lack adequate experience in the world of auto financing to recognize the proverbial grand slam. What you should do is contact local car dealerships and explore your alternatives.

The dealerships have assisted other Canadians going through a divorce and in need of a vehicle. After gaining a better understanding of your economic standing, the dealership will hand-select the lenders who would offer you the best rates.

If you have credit concerns, the interest rate may be slightly higher, but the dealership can advise you on how to improve your credit score. Now that you’ve reached this point in our talk, why not contact your local dealership immediately and begin investigating your options?

There is no obligation, and you’ll at least have a better understanding of the situation.

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! 

Dixie Auto Loans