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Purchasing an electric car after a consumer proposal

Purchasing an electric car after a consumer proposal

A consumer proposal is better than bankruptcy in the sense that your credit score will only be negatively impacted for up to 4 years. Bankruptcy will stay on your credit report for up to 7 years.

When going through a consumer proposal, you will engage the services of an insolvency trustee who will negotiate with all of your creditors to reduce the total amount of debt you owe and the amount of time you have to repay it.

Since these creditors are being forced to wait longer and receive less money than what was agreed upon, they will leave those negative remarks on your credit report.

This is not a personal attack but just a consequence of filing a consumer proposal.

How to bounce back after a consumer proposal

There are some easy-to-follow tips you can follow to bounce back from a consumer proposal.

You will need to wait until you have completed the proposal before taking on new debt; this is a legal requirement that no one can sidestep.

Once you have been given the all-clear from your insolvency trustee, you should sign up for a secured credit card from Capital One and a credit builder program offered by Koho.

These secured credit facilities will report to both TransUnion and Equifax on a monthly basis. If you make your payments on time to those facilities, it will help raise your credit score and establish a positive repayment track record.

It could take anywhere from 3-6 months before this effort starts to yield results, but if you stick with this suggestion, your credit score is all but guaranteed to improve.

Calculating how much new electric car you can afford

You should think about how much you are willing and able to pay monthly on a new electric car payment.

While the monthly payment is important, you also need to consider the term or duration of the loan. The longer you take to pay, the more interest it will cost you over the long term.

The average car loan term in Canada is around 60 months, but it could be longer or shorter depending on your credit score, interest rate, and the total amount being financed.

If you don’t have a budget defined, it can be difficult knowing what you can or can’t afford, try to allocate additional funds to cover fuel; with gas prices skyrocketing, you will be happy there was extra money earmarked to switch to electric.

Where to get approved for a car loan after a consumer proposal

While, in theory, you could try going through online lenders, those websites are not an ideal choice. What you should do in this situation is contact dealerships in your community that have expertise in helping credit challenges drivers get approved for electric car loans.

The dealership will know all of the lenders in Canada, including those who would have the most competitive terms for credit challenges Canadians.

These dealerships are able to negotiate on your behalf and turn a potential “no” into a firm “yes,” so why not contact your local dealership today and get things rolling.

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Categories: EV motoring

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