880 Walkers Line, Burlington, ON, L7N 2G2, Canada

How to buy a car in Canada even if you’ve gone bankrupt

How to buy a car in Canada even if you’ve gone bankrupt

Bankruptcy is something that can happen to anyone. Nearly half of all Canadians are living paycheck to paycheck, so it does not take much for anyone to go bankrupt.

If you have just been discharged from bankruptcy and need a new car, you can get financing but you will need to use our approach if you want to get a fair shake.

Bankruptcy and car loans 101

When you are discharged from bankruptcy, there will be a note on your credit report stating you have gone bankrupt and that will be there for 6+ years.

All of your debts are erased and aside from that note on your credit report, you are starting with a clean slate.

At first, you may think that no lender will want to deal with you because of the bankruptcy but that is where you will be surprised.

Well over 100,000 Canadians go bankrupt each year and that number is rising. These individuals have incomes and just fell on hard times in the past, so there is a niche of lenders that specialize in offering Cayuga auto loans to people who were discharged from bankruptcy.

Car loan providers for borrowers that were just discharged from bankruptcy

These lenders do not advertise online or through traditional means, they get their customers by referral from car dealership networks.

If you look for local dealerships in your area that advertise 2nd chance credit, or bankruptcy auto financing, then you can put them on your list of firms to connect with.

The dealership will have a relationship with these lenders and can help you get approved for a car loan.

A common issue with bankruptcy is you need credit to have a credit score but no one will approve you so what can you do?

You could apply for a secured credit card and use that to start rebuilding your credit score.

While waiting for your credit score to recover, the dealership will be able to explain the circumstances of the bankruptcy to the prospective lender. This transparency may seem like it’s invading your privacy but it is necessary so the lender understands the full picture.

Along with explaining the circumstances that lead up to the bankruptcy, the dealership will also talk about your income and how it is stable. Since you went bankrupt, you do not have any debts to pay aside from rent and utilities. This means you have a large amount of disposable income that can be used to repay your car loan.

You will need to have documentation that shows your income, usually, payslips and income tax notice of assessment will do the trick.

After the dealership can get you approved for the car loan, you will be able to start building your credit score. It could take 1-2 years before your credit score is back above 680 but when it reaches that level, you will be able to qualify for prime interest rates.

Now that you know how to get a car loan after bankruptcy, you should speak with a dealership and discuss your options!

We will use all our skill and experience to deliver the lowest possible Cayuga auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.

Categories: Auto Loan

Tags: ,