The moment you announce that you are in the search for a new car and a loan, everyone starts sharing their input. Where to go, how to do it and a whole list of myths and misconceptions. It is imperative to gain the proper knowledge and to be educated when it comes to auto loans. Walk into your next meeting prepared to grab the wheel of your future car. Check out our myth busters to help differentiate between fact and fiction.
Myth #1: Your Credit Score Has to Be Perfect
This is one of the biggest auto financing misconceptions. It implies that people with subprime credit, post-bankruptcy and low credit score cannot obtain an auto loan. However, this is a flawed idea. Credit scores range from 300-900 and according to TransUnion, the average credit score in Canada in 2019 is around 650. Notwithstanding, many Canadians fall below this number. This is why subprime auto loan financers exist, to help those with lower credit obtain their dream car. Not only does this allow you to grab the wheel, but also helps improve your credit score.
Myth #2: You Require a Large Down Payment to Get a Car Loan
This misleading information stops many Canadians from obtaining a car. The purpose of a car loan is to accommodate your financial situation and individualize a plan suitable for you- which can be done without a down payment. One thing to be mindful of is that without a down payment upfront, your loan amount will be higher.
Myth #3: The Rate on a Loan from a Dealer is Non-Negotiable
This is a popular myth because of the mass marketing generated by prime lenders. We specialize in applicants that have credit restraints and can work with customers who have had challenges with their credit. We can approve self employed, poor credit, past bankruptcy, and new immigrants.
Myth #4: If Your Credit Score is Low, You Need a Co-Signer False!
Having a co-signer is not mandatory for a car loan. Subprime credit lenders specialize in this market. Having a co-signer is not a requirement when it comes to obtaining a car loan. Our specialists will assess your individual needs and work with your situation and get you into the car you want. There may be alternatives to getting approved, our experts will guide you through your journey!
Myth #5: If You’ve Been Rejected Before, You Won’t Get Approved for a Loan Elsewhere
This extremely discouraging myth can really make people believe they have limited opportunities. Many auto loan lenders specialize in subprime or bad credit loans focusing their attention on helping borrowers. Go out there and keep trying. Auto dealers depend on credit providers. Let them work for you, it is a mutually beneficial relationship. Being educated is the first step in obtaining an auto loan. Do not let car loan myths hold you back from going after your dream car.