Canadians buying a car with poor credit will need to do some legwork.
Our auto loans team are going to give you an outline of the steps you must take to get a newer car and the first thing is having the right expectation.
If your credit score is below 700 you will not qualify for a prime interest rate car loan. That means you are going to be quoted a higher rate. The higher the interest rate you have to pay, the less money you will have available for the purchase of a new car.
This means that instead of a brand new car, you will need to shift your focus to used cars.
The good news is there are many great used cars out there to choose from but the average price of used cars has risen so you will need to consider that when buying a car with poor credit.
Repairing Your Poor Credit
You should take some time to better understand the cause of your credit issues. Are you making your payments on time? If you are not paying your debts as agreed, what is preventing you from doing it?
Prospective lenders will want to know why you are having credit issues and by analyzing your credit issues, you can take steps to correct them.
The first step is to look at your credit score which is available for free. (if you are not sure how to fix your credit, we will let you know how to get expert advice for free in a little bit).
Reviewing Your Finances
After looking over your credit score, you need to take a few minutes to assess your finances. You need to look at the total amount of cash coming in minus all of your expenses.
If there is not much cash leftover, you will need to trim expenses and perhaps pick up a second job or side hustle which is something that a growing number of Canadians are doing post-pandemic.
Understanding Your Car Needs
You will need to give some thought to what type of car you need. Is your family growing in size? The typical car loan is roughly 60 months, so if your family is growing then you need to pick a vehicle that will grow with those needs.
The last thing you want to do is buy a car and end up having to upgrade a year or two into the purchase.
Getting Professional Help
We mentioned there is free expert help available, you can easily access it by going to a local dealership. These dealerships specialize in auto financing so they will be able to look over your credit report and pinpoint what steps you must take.
The dealership will also have an inventory of different cars for you to choose from which lets you save time when buying a car with poor credit. Now that you know about these dealerships, you should reach out to them for help and get yourself a newer vehicle. By sticking to the advice given by the dealership, you will have a new financial lease on life.
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.