How to Get Approved for a Car Loan with Low Credit

Buying a car is not always so black and white for folks with bad credit. For someone that's living from paycheck to paycheck, something financially unexpected is all it takes to ruin a credit score. Afterwards, it can be a monumental struggle in itself to regain credit score, much less apply for a loan car purchase.

1. Be disciplined 

As a person apply and utilize credit products, all the activities on that product will be represented as a credit report and be used to build up a credit history. This history provides the loaners with an insight into your attitude to repayments. It's a useful tool to quickly gauge an anonymous borrower, and it protects the loaners against fraud. Therefore, if you're behaving as intended, i.e., paying your loans on time and being a long time credit user, you can maintain a good credit score to help you secure more loans, and provide a broader leeway for interest negotiations. However, if you're neglectful, and fail to pay back loans within the determined period, you'll become a liability and your credit score will drop, and it's much harder to recover from a troubled credit score.

2. Choose right

So, how do you actually loan a car with bad credit? You'd be surprised, but plenty of places, including our Cambridge bad credit auto loans dealership, do provide provisions to those with dubious credit. Thus, having bad credit doesn't necessarily translate to taking up the first offer you can procure. You can still shop around for deals, although it'll be trickier to truly locate a stellar deal. That said, there are a few steps you can take to increase the chances of you actually being able to afford a ride at a reasonable rate.

You'll want to prepare all your personal information and financial details beforehand, as this serves to reassert your lenders and confident in your accountability even with a bad credit. Ensure that you stick with reputable, big lenders that are willing to lend money for an acceptable rate. Don't just concede to the first offer you receive. For Garston Motors, we liaise with Canada's most reputable lender's network such as TD Bank, Scotia, CIBC, Auto Capital, National Bank of Canada, etc. This is important, as it not only protects the parties involved but also serves as a method to improve your credit score.

3. Buy a car that fits your needs

The next rule of thumb to adhere to is that you should temper your expectations. It's likely that new, off the showroom models are too expensive for people coping with a bad credit. And it's likely that the manufacturer gimmick 0% interest deals won't be applicable here. Stick to new-ish, used models that have already had the hefty drive off showroom depreciation hit, and you'll enjoy a much more eclectic range of cars to choose from. 

Also, resist the urge to just go out and make a purchase. Save up first, and be sure to take into account the implications of owning a car. Car ownership requires you to actually be able to maintain the car, and deal with emergency major repairs. Crucially, it'll be beneficial for you to be able to make a larger down payment, that'll not only translate to a lower monthly payment down the line but also provide you with a big leverage to negotiate for a lower interest rate.

4. Reputation first

Finally, to actually help your situation with the bad credit, it is imperative that you stick with larger, esteemed dealerships that work with trustworthy auto loan lenders. As long as you make your payments on time, and be responsible for the money you have loaned, the credit report made by these lenders toward the credit bureau can slowly but surely lift your credit score. Improving your credit outlook is an important step to get you back on track, and reliable car dealerships in Kitchener Waterloo can help you explore your options. Dependable lenders may also be more lenient and forgiving as long as you have a valid reason for a late payment since they actually want you to repay the loan.

If you still have questions or are interested to purchase a quality used car yet you're dealing with poor credit score, don't hesitate to contact us at Garston Motors. We've helped many others afford a car on a poor credit, and we believe that we can help you too if you are near Kitchener-Waterloo.

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