Buying a car can be difficult and confusing – and buying a car with bad credit is even more complicated. There’s a lot to know to make sure that you don’t get ripped off, and that you can qualify for a reasonable loan on a great car.
At Ride Time, we specialize in serving Canadians with bad credit! So, to help you as you try to find a great used car with bad credit, we’ve put together this list of the most common frequently-asked-questions (FAQs) about buying a used car with bad credit.
1. Is It Even Possible To Get An Auto Loan With Bad Credit?
Yes. Although you’ll likely pay higher interest rates and have a less favorable overall loan repayment structure, there are dozens of car dealerships and lenders who specialize in helping people with subpar credit, get an auto loan in Canada – including Ride Time!
2. Do I Have To Buy A Car From A “Buy Here, Pay Here” Dealer?
In general, you’ll want to avoid “buy here, pay here” (BHPH) dealerships. These dealerships specialize in providing cars to individuals with bad credit, but they often offer very high-interest rates.
If you purchase a car from a BHPH lot, you may have difficulty paying for your vehicle – and many of these dealers place special “immobilizers” on their vehicles that will shut them down in case a buyer fails to make their monthly payment. Often, this leads to a “repossession loop”. Someone will buy a vehicle, fail to pay, and then it will be repossessed and resold to another buyer.
Even if you have horrible credit, you shouldn’t turn to a BHPH dealership. Instead, find a used car dealer who can understand your situation, and is willing to work with you.
3. Can I Get An Auto Loan If I’ve Had A Car Repossessed?
Absolutely! Car repossession can do some serious damage to your credit, but having a car repossession in your credit history won’t eliminate your chances of getting an auto loan.
However, you can expect to be asked about your repossession when you apply for an auto loan, and it will likely have an effect on the rates you’ll be able to negotiate with a lender or an auto dealer.
4. Will I Have To Put Down A Large Down Payment?
This depends somewhat on the vehicle you’re buying, your budget, and your credit rating. If you’re trying to buy an expensive vehicle and you have bad credit, you’re almost always going to have to put some money down. However, more inexpensive cars are less of a risk, and some used car dealers will let you put 0 money down, and will simply charge you a higher interest rate.
A down payment can also be a way to negotiate a lower interest rate. If you put a large down payment on your vehicle, your dealer may give you a better APR, and this can save you quite a bit of money in the long run.
5. Can I Get A Loan Even If I’m Going Through A Bankruptcy?
Even if you’re going through bankruptcy proceedings in Canada, you can still get approved for an auto loan. This depends somewhat on your particular circumstances, but there are many lenders who specialize in working with people who have gone into bankruptcy.
Bankruptcy will certainly harm your credit score, but it’s not the end of the world. Get your finances in order, and you’re sure to be able to find a lender who is willing to work with you.
6. I Have Bad Credit And Recently Changed Jobs – Can I Still Get A Loan?
Many lenders like to see at least 1-2 years of stable employment before they’re willing to issue a loan, but there are exceptions.
Some lenders are willing to work with you if you can show that you’ve been steadily employed for only 3-6 months, so don’t worry if you haven’t been working at the same place for a long time. You’ll still have plenty of options.
Got Bad Credit? Need A Car? Talk To The Team At Ride Time Today!
Hopefully, these FAQs have helped you gain some more insight into the process of buying a used car with bad credit in Canada. Though it can be a bit more difficult to buy a car with bad credit, it’s certainly not impossible.
Got bad credit in Winnipeg? Do you need a car? Don’t worry! Ride Time is here to help. As mentioned, we specialize in helping car buyers with bad credit – and we can deliver our vehicles all throughout Canada!
If you can provide us with a valid Canadian driver’s licence, proof of 2 months of employment, and a pay stub showing $1,500/month in take-home income, we can work with our network of lenders to get you into a fantastic vehicle at a reasonable rate – no matter how bad your credit score is.
So trust the experts. We’ve been in business for years, and we specialize in working with bad credit buyers. Browse our inventory today, and find your next used car at Ride Time!