How to buy a car in Canada when you have bad credit

How to buy a car in Canada when you have bad credit

Posted on June 21, 2022

Canadians who have bad credit and need to buy a car are in the right place. Our Oakville auto loans team are going to show you the steps you must take in order to secure the best possible financing terms.

If you stick with us until the end of this conversation, you should have no major obstacles preventing you from realizing your goal of owning a new car.

Understanding why your credit is bad

The majority of Canadians were not taught anything about personal finance or credit in school.

This lack of education is one of the primary reasons that consumers have a low credit score. Once you understand how credit scores are calculated, you can leverage that knowledge to make your life easier.

Elements that go into a credit score include the following:

• How long your credit accounts have been open. The longer your credit accounts have been open, the greater their influence on your credit score. If your accounts are less than a year old, they can weigh down your credit score.
• Your repayment history is the single biggest credit score influencer. Creditors want to know whether you keep your financial obligations. The only way they do this is by looking at your repayment history. If you missed even one payment in the last twelve months, it could have a negative impact on your credit score.
• Types of credit products impact your credit score. There are two types of credit products which include installment loans like car payments and revolving credit which includes credit cards. You need to have a mix of both products to optimize your credit score.

If your credit score is bad, you need to make a conscientious effort to make all of your payments on time. This can be tough, especially if you are carrying too much debt with a variety of different creditors.

You need to review your budget and figure out how much cash you can put towards paying down your existing debts.

It will take a considerable amount of discipline on your end, but once your accounts are brought back up to date. Your credit score is going to increase, which will help you secure more competitive interest rate products in the future.

Where to get a car loan when you have bad credit in Oakville

If you are looking for a place to get a bad credit car loan in Canada, your most viable option is to go through a local dealership in your area that specializes in bad credit car loans.

Not all of the dealerships in your area will be able to get you approved, so you must narrow your search to only target those who specialize in helping drivers with credit issues.

The dealership will get you approved for a new car loan and can show you what steps you should take to help increase your credit score.

You should pick up the phone right away and reach out to the dealership now; the sooner you get their help, the faster you will be able to get behind the wheel of your new car.

When you’re ready for a car lease or loan, get in touch with the Oakville auto loan experts at Northway Ford for great deals on auto finance.