It’s an understandably stressful life when you’re living every month to only anticipate your next paycheck. When you’re struggling to make ends meet, budgeting for absolutely everything you have, you’ll inevitably miss a timely loan payment or two. And that could prove to be bear undesirable consequences to your credit score.

When you’re dealing with poor credit score, it can truly feel like the odds are against you. In Canada, without a doubt, the convenient method of transportation remains to be the motor vehicle. And when you’re stricken with the misfortune of a mediocre credit score, it’ll soon be eminent that it’s an ordeal in its own to find someone willing to finance a car for you.

That said, there are definitely people and dealers out there that are keen to lend a helping hand to those who are in need of a car, yet are struggling to source a financing deal suited to them. If you are one of them, there are certainly a few methods to still help sort your situation out.

1.  Patience Pays Dividend

The age-old adage, being patience will almost always work out for the better in the long term. If you’re suffering from a marred credit score, it’s not the end of the world. There are always auto dealers out there that are more than willing to help resolve your situation. It might seem daunting, but absolutely do approach dealerships and shop around assertively.

The credit score is something that is used for lenders to quickly gauge how trustworthy one is at paying back debts, and so it is quite inversely proportional to your interest rate. It’s fair to say that the lower your credit score, the more you are expected to be penalized from higher interest rates as a form of compensation for the lender being willing to lend you money.

That said if you approach dealerships with confidence, and is still prepared to walk away from any deal, this tells the dealer that you might’ve just had a stroke of bad luck. Being overzealous and willing to pounce at any deals given by the dealer just because you’re afraid of losing the opportunity will be one leverage that dealers definitely take advantage of.

There are also a few dealerships out there that are specialists at dealing with customers that just so happens to end up with bad credit, so try to look for these. These bad credit car dealerships generally have in-house financial experts who help to better comprehend your financial state and propose measures you can take to alleviate the issue. They will also be willing to negotiate and provide breathing room for you. It’s a smart move in their part since any customer, regardless of their financial situation, is a customer. Helping a customer in their time of need is one way to guarantee a returning customer.

One way to reassure the loaners is to prepare all your documents in full beforehand, ready for presentation. It’s how you demonstrate your accountability despite of your unsatisfactory credit score. Also, always stick to dealers with a venerated lenders network that will provide financing deals at a reasonable rate. You’re not looking for stellar ultra-low interest deals here, just a manageable and fair interest rate with affordable monthly payments. It protects and benefits all involved parties and helps to ameliorate your credit score down the line.

2.  Understand Your Situation

Face it bluntly, you’re not in the finest circumstances here. As such, the car you look for should represent so. Don’t be tempted by anything too old even if they cost less or anything that’s too new. Old cars bear higher maintenance costs and new cars suffer from hefty depreciation. With this guideline in mind, you should now still have a rather broad range of cars to pick from.

Now, grasp your needs. Understand what you need the car for, and try to keep your short-term future in mind. SUVs might not be a good idea now due to their generally worse efficiency, and sporty cars have the insurance rates to match. Typically you’ll be looking at an economy-minded 5-door hatchback which is essentially the jack-of-all-trades in the automotive world.

Also, it should be immediately overt to you what owning a car means. Car ownership is all part of purchasing a car, as such average maintenance costs and fuel efficiency should be taken into account. Prepare a sum for emergency repairs too. If possible, making a down payment will be most beneficial for you for the lower monthly payments and negotiation point. If you stick to the rules stated above, it’s positive that you will be able to get financed even with a bad credit.

3.  Dedicate to Monthly Payments

Since credit score is directly correlated to how you approach credit products, if you use credit to make purchases and make payments on time, it reflects favorably towards your credit score. If you’re really struggling and scrounging for any auto loan, perhaps try committing to smaller loans first. It’s simpler and easier to loan electrical appliances, for example.

If loaners see that you do have a few things on loan, and you’re punctual on the payments, it’ll give you an easier time to get approved for a bigger loan. This is also how you improve your credit score. Given that you’re doing well, you might even be able to inquire for a refinance on your auto loan down the line.


As you might see, it’s not all that tough to get approved for an auto loan even if you have bad credit. It’s not as big a stigma as it was back a decade or two ago. As long as you have the correct mindset and understand how to approach your situation, you can still end up with a pleasing auto loan experience.

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