The Canadian used car market is very robust at the moment. Whether you're looking for an SUV, truck, or passenger car, the advantages of buying a used vehicle are many:
- They're cheaper than brand new cars
- They depreciate slower
- Many used cars carry the balance of warranty
- Newer pre-owned vehicles are well-equipped
- They're more reliable than ever
Where to get a used car loan
It may surprise you to learn that used cars aren't only available from private sellers. Dealerships sell used cars too and offer a variety of auto finance options. Below we list the pros and cons of buying a used car from dealership (or retailer) or private seller.
Advantages
Dealerships
Private Sales
- Better financing options
- All cars subject to pro-grade inspection, servicing, and repairs
- Certified vehicles assure reliability
- No dealership fee
- Private sales can be easier to negotiate
Disadvantages
Dealerships
Private Sales
- Can be more expensive due to professional servicing & warranties
- Other extra fees usually apply
- Lack of financing options
- Scams are a big risk
- Servicing and repairs might be done cheaply, incompetently, or not at all
How to choose the right used car finance option
If you choose to buy a car from a private seller, there will be less auto finance options available to you. You either need to pay cash or meet with your bank manager to discuss a loan. If your credit is less than perfect, getting a loan from the bank could be an obstacle.
On the other hand, if you go through the dealership, not only will you enjoy the peace of mind that comes with professional inspection and servicing, these professionals will have more finance options to help get you approved for your car loan.
Can I finance a used car with bad credit?
Banks are less likely to approve you for used car financing if your credit is low. However, some dealerships and retailers are connected with lenders that specialize in helping customers facing bad credit or no credit. Canada Drives is one such provider. No matter what credit situation you're facing, Canada Drives can pre-approve you and connect you with great deals on used cars in your town or city.
What's the catch with no credit check car loans?
If you decide to choose a used car loan, always go through a reputable retailer. Avoid ‘buy here pay here’ lenders who don’t report to the credit bureaus, meaning your credit score doesn’t benefit from your loan. 'No credit check' car loans 'with guaranteed approval' DO NOT offer the best used car finance rates. The price you pay for the loan approval is simply not worth it.
If bad credit is a concern, Canada Drives can connect you with some great vehicles and auto financing options. We do check credit but we're also one of your best chances of getting approved for your next vehicle if you have less-than-perfect credit. Get pre-approved today for the car you want while keeping payments affordable and strengthening your credit.
Read More: No Credit Check Car Loans with Guaranteed Approval: Fact or Fiction?
Is 0% financing possible on a used car?
Firstly, keep in mind that 0% financing offers are usually reserved for customers with excellent credit, or extremely close to it!
It’s possible to get 0% financing on a used car—but it's rare. Banks, credit unions, and other lenders don’t offer 0% financing on cars, only car manufacturers do. Keep an eye out for manufacturer deals and offers and ask your dealer about it.
What about CPO (Certified Pre-Owned) car loans?
Today, certified pre-owned vehicles are also eligible for special financing rates from certain manufacturers like Toyota and BMW. These rates make it affordable to buy a used car – even more so than a new car. Even if you don’t qualify for the lowest rate due to credit issues, the lower initial purchase price can still make buying a pre-owned car loan more affordable than new.
And for most models that still have new car warranty in effect, used car loan terms can be as long as a new car, up to 84 months or longer.
Because the depreciation has slowed, used car buyers will often be able to start out in a positive equity situation or reach that point in mere months, not years.
And if being protected against unexpected expenses like car repairs is important, extended warranties are available and can be tailored to your needs. It’s easy to add this cost to most used car loans too.
Find a great car and finance rate (even with bad credit)
Canada Drives can get you pre-approved for a car loan regardless of your credit score. You will even get matched with a dealership in your area who will have a selection of quality cars available for you to choose from, that you already qualify for! So you can save time by not having to shop around and look at cars you may or may not get approved for. No more fear of rejection in the finance office!
Click here to get pre-approved for your car loan.
