If you’re like most people in Canada, you have a less-than-perfect credit score. Maybe you maxed out your credit cards during your college years, or maybe you missed some bill payments when your family was struggling financially. Whatever the past events were that led to a decline in your credit score, your bad credit shouldn’t prevent you from purchasing the car that you need today. Get on the road to rebuilding your credit score, and purchase the car that you actually want by applying for a bad credit auto loan.
Many people with bad credit think that the only option they have for purchasing a new car is paying for the car outright. Because most people cannot afford to pay cash for a brand new car, people with bad credit usually search the “for sale” ads of their local newspapers, look through Craigslist postings or visit used car dealerships that are selling very low-priced cars. While some buyers find a nice car without taking out bad credit auto loans, more often than not the cheap car they purchase has some mechanical problems. Unless you are a mechanic yourself, a low-priced used car may actually cost you more in the long run when you factor in all of the repair costs.
A Bad Credit Auto Loan Can Help
A bad credit auto loan can help people with low credit scores finance car purchases that will make their lives easier instead of more complicated. Rather than settling for a car that the seller tells you may have a few “issues,” you can apply for a loan to purchase a car that you can rely on. When your automobile lasts for many years without requiring any expensive repairs, you can breathe easy and concentrate on the more important things in life. Not only that, by financing a higher priced car, you may actually end up with a car you like to drive.
People with bad credit may think that they have to settle for bad auto loan terms, but this is not the case. While your credit score may have some effect on your loan terms, it won’t be as big of a factor as you probably think. In addition to your credit score, lenders will also look at your current monthly income and the down payment that you are willing to offer them for a car purchase. If you earn a steady income and have some money set aside to make a down payment, you may be offered excellent terms for a bad credit auto loan! The bigger the down payment is that you are willing to make, the better your loan terms are likely to be.
Applying For A Bad Credit Auto Loan
Applying for a bad credit auto loan for your next car purchase can be a great way to rebuild your damaged credit score. While other types of loans rely more heavily on a person’s creditworthiness, auto financing is typically a collateral-based loan system that is much more open to people with bad credit. As you make on-time payments on your auto loan each month, your lender will report those payments to the credit bureaus. As long as you continue to pay all of your other bills on time every month, you can happily watch your credit score rise higher and higher as you get closer to paying off your new car.