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 used vehicles are many:

  • They're cheaper than 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 private seller.



    Private Sales

    1. Better financing options
    2. All cars subject to pro-grade inspection, servicing, & repairs
    3. CPO vehicles offer like-new reassurances
    1. No dealership fee
    2. Private sales can be easier to negotiate



    Private Sales

    1. Can be more expensive due to professional servicing & warranties
    2. Other extra fees usually apply
    1. Lack of financing options
    2. Scams are a big risk
    3. Servicing & 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, but the dealership will have more finance options to help you get approved for the best used car loan rates.

    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 are connected with lenders that specialize in helping customers facing bad credit or no credit. Canada Drives can help connect you with these dealerships. No matter what credit situation you're facing, Canada Drives can prepprove you and connect you with the best deal on a 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 dealership. 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 partners with dealerships nationwide that can help you find the perfect used auto loan for your needs and budget. We do check credit but we're also your best chance 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 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 the best finance rate on a used car (even with bad credit)

    Canada Drives simplified car shopping for ALL Canadians. Whether you have bad credit, good credit, or no credit, we're here to help you find a great deal on your next vehicle. Apply today in minutes, get approved for your car loan within hours!

    Here's how it works:

    Step 1 - First, we ask you to pick a vehicle type. By indicating which type of car you are looking to finance, we are able to find dealers that have this particular kind of vehicle in their inventory.

    Step 2 - Next, you need to fill out our online Car Loan Application form. The application takes just 3 minutes and we only ask for basic details. With this information, we are able to determine how much you're eligible for.

    Step 3 - Then, we'll match your application with a certified dealer partner who is able to discuss your vehicle options. You can expect to be contacted by a dealership near you that is in the best position to offer you a suitable vehicle with a monthly payment that makes sense.

    More resources

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