As with any financial decision, comparison-shopping for auto loans is of utmost importance. Discovering the various rates, policies, and approvals available to you is the only way to determine whether or not you’re getting the best deal possible. From this marketplace, a variety of programs, institutions, and specialists have sprung forth.
Before, auto lending was a game exclusively for the banks. But as the auto loan industry has grown, driven in part by the growing market share of the Canadian used car industry, customers now have more options than ever. In fact, each year the banks lose more and more of their grasp on the industry, passing it increasingly over to a variety of offshoot institutions. This increase in competition and availability has enabled those with bad credits to find faster approval and more manageable rates. So, the following is a rundown of the specialist institutions seizing the auto loan industry, and how they can help applicants with bad credit, find approval.
One great place to try and get an auto loans is through a credit union. Credit unions are financial institutions that don’t seek to make any sort of profit. Additionally, it’s a cooperative, which means that its members are also “owners”. This, combined with its lack of interest in profit, can create the ideal conditions for people with bad credit. Credit unions can offer some of the lowest interest rates on the market. It’s only fiduciary responsibility is to its members, and thus the drive to maximize the money they make off of every transaction is nonexistent.
If you are a member of a credit union, it behooves them to lend to you. This incentive means that even with bad credit, applicants can find relatively easy approval. What’s more, overtime you can build a sort of contained credit with the credit union exclusively.
Being a member who maintains a healthy balance in both checking and savings can help to sell you to the credit union lenders. Additionally, participating in a credit union’s bill pay service can create a sort of informal legitimacy around you, to the credit union. A bill pay service is essentially a program, operated through the credit union, to automatically handle the paying of your various bills. This will give the credit union, a pre-existing sense of how well you can pay your debts on time, as well as your financial capacity to take on another expense. Becoming a member of a credit union is beneficial for a variety of reasons, but the auto loan benefits stick out in particular.
The ability to obtain ridiculously low interest rates and quick approval, despite your credit, means that credit unions are often your only resource. Their lack of concern for profits and allegiance to their members means that your debt isn’t just another revenue stream for them to milk dry. With the Canadian used car industry being driven increasingly by lending, finding approval from institutions other than banks is in many cases essential.
If establishing membership in a credit union seems a little too extensive and convoluted for you, then getting a loan through a dealer itself might be a little more your speed. Typically, obtaining a loan through a dealer is only a good idea when you have excellent credit and thus can tilt the rates strongly in your favor.
If credit unions are interested in helping their members, then any dealer less reputable than Ridetime is only interested in helping themselves. The only other reason you’d want to get a loan from a dealer is if your credit is so low that you can’t find approval otherwise.
Since many dealers are so profit driven, they might extend a loan to someone with terrible credit so they can keep the customer on the hook for a long time and maybe even recoup the car if they default. This is very dangerous for the applicant, but does present an opportunity for approval regardless of your credit.
In the scope of the Canadian used car industry, dealer financing is a high-risk high-reward scenario. This is especially true for Canadians with poor credit! The ease of approval through dealer financing comes with a host of mark ups and a trend toward unmanageable interest rates. However, if you know you can manage it, dealer financing may be a tenable option despite the generally volatile conditions surrounding them.
Ridetime isn’t like most dealers when it comes to lending. Ridetime works with a roster of lenders that can almost guarantee a wide array of payment policies, rates, and approvals. By working with such a comprehensive regimen of lenders, Ridetime can take unprecedented steps toward ensuring that every customer gets a manageable loan.