How to Get a Car Loan With Low Income In Ontario

Inflation is wreaking all kinds of havoc on the Canadian economy. Most of us are just trying to get by. If you need to buy a new car with a low income in Canada, there are options available, but you must stick with us to the end if you want to stand a chance.

You're Not Alone

A recent study showed that the average Canadian is roughly $200 away from insolvency; this is not a statistic meant to scare you but to show you that you are not doing anything wrong.

Inflation is just making everything more expensive, especially when wages are not keeping pace.

Try Building Your Credit

Even if you are facing financial hardship, if you have decent credit, you will be able to make the most of every single dollar you bring in.

It would be prudent on your part to monitor your credit, especially if you are not actively doing it now.

You can use apps like Koho, which gives you access to your TransUnion credit report for free.

To qualify for competitive interest rate car loans, your credit score must be over 700; you may be able to get approved with a 650, but the interest rates being charged will be very high.

If your credit score is low, there are some easy-to-follow things you can do to raise the score.

Start by always paying your debts on time; the leading cause of a low credit score is missed payments; even if you are only able to make your minimum payments, never let a payment lapse.

Easy-to-follow Budgeting Fundamentals

While you are working on improving your credit score, we need to discuss the importance of having a budget. How will you know whether you are able to afford a car payment without a budget in place? Prospective lenders will want to know this number, so you should take a few minutes and calculate it now.

The next thing you have to do is start deducting all of your expenses, and once you have subtracted all of the expenses, you will have a balance. This is the amount of money you can put towards a car payment.

If there is not much room left in your budget, you might consider doing a loan consolidation or taking some equity out of your property to pay down debt.

The average car payment in Canada is $500; this is for a conventional, gas-powered car, but if you are looking for the best bang for your buck, now may be the time to make the switch to an all-electric (EV).

Some people wonder Are electric cars cheaper than gas cars? Over the life of the car, the short answer is a resounding yes! While the upfront cost may seem like a steep price to pay, you are going to save a massive amount of cash each time to plug in your EV instead of pumping $2+ per litre of gas.

If your budget is tight, you could go with a previously owned car. So long as the warranty is still in effect and you are dealing with a reputable seller, there will be no problems.

Where to Buy a Car With Low-Income

There are some EV retailers that will try to sell their vehicle online, online shopping is fun and very convenient.

But, when it comes to making a major financial decision like buying a car, you need to deal with someone in person; you need to head over to a local dealership and check out their range of new and used vehicles.

With interest rates rising, you need to move fast if you want to secure an affordable car loan; the dealership will be able to help you with securing the financing and also getting any electric vehicle rebates you may be entitled to.

If you're ready for a car loan in Southern Ontario, we'd love to help! simply fill in the form below to get started.