The Best Car Loan Lenders for Bad Credit: A Comprehensive Guide

Individuals in Canada who have poor credit ratings and need to buy new cars may find it challenging to get a loan from the bank. Traditional lenders have strict requirements for loans. If you have bad credit, there are several lenders specializing in bad credit car loans. Their eligibility requirements are more lenient, which increases your chances of being approved. 

How to Shop Around For a Car Loan With Bad Credit

To find the perfect car, search for dealerships with a wide selection of vehicles to compare different car models to see which ones meet your needs. Once you've narrowed your options, test drive multiple cars to ensure you feel comfortable driving them. Finally, make sure you look for the best deal and negotiate with the dealer before making your purchase.

Does the Dealership Work with Multiple Lenders?

We recommend obtaining quotes from multiple lenders to ensure you get the best interest rate. Lenders will typically conduct a soft credit check to determine your terms and interest rate. A soft credit check won't harm your credit rating, so it's crucial to compare interest rates as even a small difference in rate, such as 25% compared with 30%, can affect the amount you will pay.  

Is There a Warranty on the Car?

Newer cars may still have part of their original warranty intact, so the manufacturer may cover product defects. Ask your dealership about the specifics of the remaining warranty and check if any extended warranties are in effect.

Dealerships may also provide a limited warranty for new car buyers. This helps to provide peace of mind so you can be sure it is in good working order when you purchase it. 

Most dealerships will also conduct a thorough inspection of the car before purchasing it from a seller, so you can feel comfortable knowing that they have assessed the vehicle for potential problems before you buy.

Can I Do A Trade-In?  

A trade-in is a great way to reduce the purchase price of your vehicle, and many dealerships offer an easy trade-in process. If you are interested in doing a trade-in, you simply need to provide your Vehicle Identification Number for your car. Your VIN number can be used to obtain your car history report. This offers information about the following:

• Any accidents the vehicle was involved in 

• Any liens placed on the car

• Previous service history and open recalls 

The dealership will also conduct a thorough physical inspection of your car before confirming an offer. 

What to Consider When Securing a Car Loan

When you are shopping around for a car loan, there are several factors you should consider. 

How Much Can I Afford?

When it comes to deciding what you can afford, it is essential to factor in costs such as 

gas, insurance, maintenance and repair costs. Use our car loan calculator to see what you can afford and leave room in your budget for unexpected costs that may arise during the month. 

What Is the Interest Rate?

The interest rate is the amount the lending company charges you for taking out a loan. While traditional lenders such as banks and credit unions commonly offer loans with low-interest rates, they only approve loans to the following types of borrowers who meet the following eligibility requirements:

• Lengthy credit histories

• A high credit score

• Stable employment

• A strong financial position

Get a Car Loan Interest Rate With Bad Credit

Individuals with a bad credit score are unlikely to qualify for a loan from the bank. They are viewed as riskier borrowers, so they have to pay more for their loans. Higher interest rates for bad credit car loans can be as low as 11% or close to 50%.  

Should I Make a Downpayment?

While you can get a car loan without a downpayment, offering one is beneficial for several reasons.

• It helps to decrease the loan amount, so you end up paying less interest in the long run.

• Lenders may feel more secure approving a loan with a downpayment and offer more favourable loan terms.

How Long Is the Loan Term?

A longer loan term may help make your loan more manageable by spreading out the cost of your car over a longer timeframe. This may work better with your budget, but keep in mind that a longer loan term means you will have to pay more interest. 

What Do I Need to Get a Bad Credit Car Loan?

In addition to doing a soft credit check with the credit bureaus, most lenders will ask for the following documentation before approving you for an auto loan. 

• Proof of employment - You will need to show the lender that you have a stable employment history so they can be sure you have the ability to pay back the loan. An employment letter, bank statements, or pay stubs can be submitted to the lender.

• Proof of income - The lender may ask for bank statements or copies of your latest pay stubs to confirm your income. 

• Driver's License and Proof of Address - Your lender will need proof that you are a registered driver before approving you for a loan. They also need to know your place of residence, so provide copies of utility bills, such as phone or gas bills, with your name and address displayed. 

Get Approved For a Car Loan With Insta Auto Solutions

At Insta Auto Solutions car dealerships, we focus on helping you find the car you want at a price that's right for you.

Come and See Us if You Have Bad Credit

We specialize in working with people with bad credit. We commonly approve loans to:

• Newcomers to Canada with no credit history

• Students with a limited credit history

• Individuals with a low credit score or poor credit report

• Individuals who have filed for bankruptcy

We Offer a Large Inventory

Visit one of our many dealerships to take advantage of our extensive inventory. We have many vehicles on our lot, including sedans, coupes, pickup trucks, minivans, convertibles, SUVs and vans. 

We Do Trade-Ins

If you want to trade in a vehicle, we would be happy to assist you in the process. To get started, use our trade-in tool. You simply need to provide the vehicle identification number (VIN) for your car and we'll tell you how much your car is worth. 

How To Find Your VIN

To find your vehicle identification number, check these three locations: 

• On the driver's side dashboard, close to the windshield 

• Engraved on the engine block under the hood

• On the driver's side door frame near the door latch

We Deliver Anywhere in Western Canada

We make shopping online easy! Browse our extensive inventory, where you will have access to information such as the make, model, year and mileage. You will also be able to read the car fax report, detailing service records, open recalls and previous accidents. 

Once you are ready to buy, apply for a loan online and once the paperwork is complete, we will even deliver your new car directly to you anywhere in Western Canada. 

We Work With Several Lenders to Get You the Best Rate

We understand how the interest rate affects your bottom line. That's why we work with multiple lenders to get you the best rate. If you are ready to start the pre-approval process, fill in our pre-approval form online.

What To Do When You Are Approved For a Car Loan

Once you have been approved for a car loan, it is essential to keep the following in mind.

Pay Your Bills on Time

If you are looking to improve your credit score, it is vital that you pay your monthly payments for your car loan in full and on time. This is important for all of your bills, including credit card bills and utility bills, as late or missed payments will negatively impact your credit score.

Apply For a Bad Credit Car Loan in Canada

If you have bad credit, Insta Auto Solutions can help you secure an auto financing loan to buy a new car. If you would like to find out more information about our inventory or would like to get pre-approved for a car loan, contact our office today. Alternatively, if you live locally, come in with your documentation and let us help you find a car that is perfect for you.