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Can you get an EV car loan when you owe the CRA back taxes?

Can you get an EV car loan when you owe the CRA back taxes?

If you need to secure an EV car loan and owe the CRA back taxes, there are some important things you need to be aware of, or you could end up in financial hot water.

How much do you owe the CRA?

The amount of money you owe the CRA is a matter of particular importance; if it is less than $1,000, then most lenders won’t worry about it.

Suppose you owe the CRA $5,000 or more.

In that case, that is an amount that lenders will want to be addressed because the CRA is able to seize your assets without having to go through the court process that all other creditors must follow.

Are you on a payment plan with the CRA?

If you owe the CRA money and have a repayment plan worked out, prospective lenders will want to know the details of the agreement.

The monthly payment you will be making to the CRA is going to impact the amount of cash you have available to repay your new car loan.

The CRA will usually send a letter in the mail stating the terms of the agreement; you can send a copy of that to the lender.

How much income are you generating?

Lenders will want to know how much money you are earning each month before taxes.

This is your gross or pre-tax income, and that amount is used when trying to calculate the maximum loan you can receive.

As a rule of thumb, lenders will not approve a car loan if your debt-to-income ratio exceeds 40 percent, and with the economy facing some significant challenges ahead, that requirement may go down to 35%.

If you already have lots of debt, you should consider reducing your debt and taking on a sideline source of income like driving Uber when you aren’t working your main job.

Checking your credit score

Since the CRA does not report your debt to the credit reporting agencies, on paper, your credit utilization levels look manageable, but the CRA debt puts you over the limit.

Even if you didn’t have a debt with the CRA, you should get into the habit of keeping tabs on your credit score, so you are always in a position of confidence.

Finding lenders who will approve an EV car loan even if you owe the CRA money

Some lenders will approve an EV car loan, but you won’t find them online or through any search engine.

What you need to do is contact a local car dealership in your area, one that has experience helping individuals like you owe found themselves on the CRA money.

The dealership will have an existing relationship with lenders who are willing to think and lend outside the box.

What the dealership will do is develop a payment plan where you can still get a car today and get back on a solid financial footing going forward.

The sooner you go to the dealership for help, the faster you can start leading a life where you don’t owe the CRA anything.

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Categories: EV motoring

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