Leasing advertisements for new cars seem appealing with the no down payment, low interest and low monthly payments that are advertised. These attractive deals and the idea of a fresh new car with a warranty have many people wanting to lease.
But what about those buyers who are struggling with less than perfect credit? For these consumers, leasing may not be an option. However, there are still ways to buy a car, but you will want to know some things before you head to the dealership.
Lenders and Your Credit
When a dealership pulls your credit score, this number is a reflection of your credit history. A low credit score can be an issue for someone who wants to finance, instead of lease, a car. For these potential buyers, subprime financing may be their only option. These loans usually include:
- Down payment.
In many cases, you will need one. Having one shows the lender that you are taking your purchase seriously.
Subprime lenders typically require borrowers to furnish them with proof of employment, income and residence.
- Higher interest rates.
Subprime applicants will find that the interest rates available to them are higher because the rate that you are able to qualify for is directly related to your credit score.
You and Your Credit
If you're looking further down the road, a lease may still be within reach if you can improve your credit score beforehand. Here are some things you can do to increase your chances at success:
First, pull your credit reports and dispute any errors that may be bringing down your score. The two things that will help you raise your score the most are making all of your payments on time and paying off debt. That may require that you create a new budget. You can also obtain a traditional or secured credit card and practice good habits, like keeping the utilization low and making all of your payments on time.
Requirements for leasing are tougher, so all of this has to be done in advance. If you need a vehicle fast, then leasing may not be for you. Instead, you may have to go with a subprime lender.
We are Here to Help
If you have less than perfect credit but need to buy a car, look no further than Canada Auto Loan. We are connected to dealerships all across Canada, and they can get you approved for an auto loan, regardless of your credit situation. You can get the reliable transportation you need and boost your credit rating by making timely payments on the loan. When you fill out our quick and secure application, we'll connect you with the perfect dealer for your unique situation.