What you need to know about car loans financing?
You want to buy a car but don’t have a huge amount of money to spend. Welcome to car loan financing! For many Canadians, a new or used car purchase requires a car loan.
And while banks and dealerships are the most common avenues for car loans, these are not always valid options if you have bad credit or no credit. Many banks won't work with you if you have a poor credit score and many dealerships arn't set up for subprime auto loans.
Thankfully, there is a way to get approved for a car loan with ease, even if you have bad credit.
Read on to learn more about car loan financing and how you can get a fast car loan approval regardless of your credit situation.
Where to get car loan financing?
You might ask, “who should I go to for a car loan?”
There are a few places that people normally turn to for car loan financing. Traditionally, most people go to their local bank. The bank is a good resource if you have strong credit and want to finance a vehicle that you found through a private sale. With a bank loan application, it can take weeks to get approved even if you have good credit.
Another place you can get car loan financing is through a dealership. They typically work with a variety of lenders, including your own bank and may also offer loans through their own finance house.
If you have less-than-stellar credit and are looking for quick & easy car loan approval, Canada Drives is a third option that is becoming more and more popular among car buyers.
We're connected with over 350 certified dealerships that are equipped to help even the most credit-challenged customers.
Whatever your credit rating, Canada Drives is here to make your journey to a new vehicle so much smoother. Before you even start your search for a car, we can help you get pre-approved for finance and match you with a dealership that knows how to help. Simply apply online in 3 minutes, and you could be driving your new car in as little as 48 hours.
What’s a good interest rate for car loan financing?
Interest rates vary from 0% to 30% depending on a variety of factors. With brand new vehicles, you might see promotional interest rates as low as 0%. With used vehicles, interest rates typically start at 5-7% and go up from there.
Pro tip: Don’t get too caught up on only the interest rate when buying a car; a vehicle with an 8% interest rate may be a better deal overall than a vehicle with 0% interest once all other variables are factored in.
What kind of vehicles can you get with car loan financing?
Whether through private sale or dealership, car loans can be obtained for all types of vehicles. You can obtain car loan financing for new and used cars, trucks, SUVs, and pickups. The only limitation is on vehicles that are more than ten years old. While the used car market is a good place to find great value car deals, vehicles over ten years old can be difficult to finance.
Pro tip: Many dealerships offer certified pre-owned vehicles. CPO vehicles are gently used cars that dealerships select for their certified program due to their excellent condition. These cars are subject to renewed warranties, lower interest financing offers, and other extras.
Can I get car loan financing if I have bad or no credit?
If you have bad credit it can be a little trickier get approved for financing. Many banks won’t work with you if you have a bad credit score, and a lot of dealerships aren’t set up to help bad credit or no credit customers. Fortunately, some companies (like Canada Drives) are starting to emerge that leverage digital solutions to deliver options for credit-challenged customers.
And the best part is, once we get you approved for a car loan, regular payments on that loan will help you rebuild your credit! That's right, car loan financing is a great way to start rebuilding your credit score!
Today, there are opportunities for bad credit car buyers that didn’t exist before.
Canada Drives has helped many Canadians to get approved for car finance with ease, regardless of their credit score.
When you have bad credit, a car loan approval can be hard to come by. But Canada Drives’ dealer partners work hard to get applicants approved for the best vehicle and financing options within a couple of days. If you need an affordable vehicle and want to rebuild your credit, apply for FREE today!