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How to get a Car Loan when you owe the CRA Money [2022]

How to get a Car Loan when you owe the CRA Money [2022]

If you need a new car and owe the CRA money, you will need to move fast. The CRA is flexible when discussing payment options with taxpayers, but you must be willing to do your part and work with them.

 

Unlike other creditors that must go through the court process and get a judgment before they can garnish your bank account, the CRA can freeze your account and assets if it deems you are not being reasonable.

 

They aren’t obligated to notify you. We are not trying to scare you, just don’t play games with the Government, and things should go fine.

 

Lenders are reluctant to issue a car loan when you owe the CRA money

 

The majority of lenders out there will not issue a loan if you owe the government money.

 

These lenders know that the government can seize any and all of your assets to offset the unpaid taxes.

 

For example, when you buy a car, you are the registered owner of the vehicle, and the lender has a lien applied against the car, but the government can move into the first position.

 

Should you not keep your agreement, the government can seize the vehicle, sell it and use the proceeds to go against your debt.

 

Lenders know they cannot beat the government and simply don’t want the hassle.

 

Lenders will ask for your latest income tax assessment and look at line 48400 to see if you have a balance owing or refund.

 

You can make arrangements with the CRA to repay the debt and get it in writing, there will be some lenders that will give you a loan, but they need to look at the repayment agreement.

 

How the CRA repayment impacts your car-buying options

 

Prospective lenders will use a debt-to-income or DTI ratio to determine the maximum loan you can service.

 

The industry average is 40%, all of your current obligations plus the CRA repayments may prevent you from buying a new car and instead opting for a used vehicle.

 

Reviewing your credit score

 

While having issues with the CRA may be a headache, your credit score is what will make or break your car buying experience.

 

If your credit score is 720 or higher, then you should consider taking out a loan to pay off your CRA debt so you don’t have the CRA impacting your ability to access the best car loans.

 

However, if that is not something you want to do, you need a credit score of over 600 to access any type of car loan.

 

Where to find sympathetic auto loan providers in Woodstock

 

Your best option when it comes to finding a car loan when you owe the CRA money, is to contact a local car dealership and explore what options are available.

 

The dealership is going to take its time to understand the circumstances that lead to the issues with the CRA.

After speaking with the dealership, they will be able to identify the lenders who will give you a competitive deal. So, now that you know how to get a car loan while owing the CRA money, you should contact the dealership today.

 

We’d love to help you secure a car loan. Simply fill in the form below and we’ll get back to you ASAP or see our selection of used cars at our Burlington dealership. 

 

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    Categories: Auto Loan

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