As we have all heard the famous quote by author Richard Carlson "If it seems too good to be true, it probably is".
Well, I think we can all agree a Pink Jeep advertised at $99 Bi-Weekly is too good to be true (Okay, The colours not the point, pretend it's Black).
Or how about this one: "All Credit Approved, 100% Approvals, Apply TODAY and DRIVE Tomorrow" We have all seen these false claims and ad's far too often.
Let me bring you all to a place where I like to reside, it's called REALITY. You see, here in Reality, you can't buy a Pink Jeep for $99 Bi-Weekly with $0 Down. You also probably won't get approved on a Tuesday, if you just filed bankruptcy on Monday!
That credit card you wrote off and never paid and the loan you defaulted on. That cell phone company you told to stick it (Damn those cell phone companies, damn them all) WILL actually affect your credit. Depending on how bad and high risk you look to the banks, you very well may NOT GET APPROVED.
I am sorry to be the bearer of bad news folks, but here goes:
THERE IS NO SUCH THING AS 100% APPROVALS
Any companies who claim there is, well, my advice is to run for the hills. Now here is the problem and why we are all so tired of these false ad's filled with empty promises. Over 33% of Canadians do have BAD CREDIT, and need transportation to get to and from work. So, how does someone with bad credit get APPROVED for a BAD CREDIT CAR LOAN in CANADA?
Great Question! Well, I've delivered enough bad news (I know, you wanted that Pink Jeep, admit It). So let me share with you some good news, and some actual actionable advice.
Canadians with Poor credit, Bad credit, Bankruptcies, Consumer proposals, Disability, Students, Self employed, do have options for AUTO FINANCING , and can still get APPROVED!
There are 3 Basic criterias that Canadian Auto Finance companies (real ones) require as a minimum to consider approving someone for a CAR LOAN.
You must make a minimum of $1800 Gross Per Month (Before Taxes / Deductions).
Be working for that employer for at least 90 Days.
Be able to prove your stated income (PayStub, Bank Deposits, Etc) if asked by the lender.
Proof of income is not always required, but most often it is on a Non-Prime Approval. (Non-Prime / Sub-Prime is what banks refer to as any loan that is not a Prime Approval)
Another fact from reality, Non-Prime Deals are higher risk then a Prime Deals, so with this does come High Interest Rates.
A Prime Approval in Canada can see anywhere from 0.99% - 5.99%. Where as a Non-Prime Approval can range anywhere from 8.99% - 29.95% There are many different factors that determine which Tier you will fall into.
Make sure you deal with real, reputable companies when sharing your personal information. If your credit isn't the best, chances are you've probably already been declined at a dealership. The LAST thing you need is for your information to be sold off to multiple Dealers. They will run multiple Credit Checks, and call your phone MULTIPLE times.
Check out our tips on avoiding car buying scams.