With the spring and summer seasons upon us, it’s time to start thinking of vehicles for your next long weekend getaway! Whether you are on the hunt for a truck to tow an RV or a family car to drive across the province, finding a vehicle to fit your vacation needs involves some planning. 

For instance, do you intend to use your car or truck for a work trip or personal leisure? 

Are you planning on towing a trailer and dropping it off somewhere, or will you be on the move? 

Perhaps most importantly, what does your credit history look like while shopping for a car loan?

Having a poor credit history can make getting a car loan feel daunting. However, at Insta Auto Solutions, we recognize that many Canadians have bad credit, and your credit history should not impede your ability to get approved for a car loan. In this blog post, we will discuss some tips for getting approved for a car loan with bad credit. 

Work With Dealerships Who Have Programs and Knowledge of Bad Credit Car Loans

When you know you have bad credit, the first step in getting approved for a car loan is choosing the right dealership. Some dealerships refuse clients with bad credit—Insta Auto Solutions is not one of them! We recognize the importance of offering bad credit vehicle loans, including no money down car loans, to our clients who need them. 

A bad credit car loan will have a higher interest rate than a good credit loan, but otherwise, there is no difference between the two. Since the interest rate is higher, your monthly payment will largely cover the interest, and your down payment will likely be smaller. This is not necessarily a bad thing. Since they have higher interest rates, keeping up with your monthly payments on a bad credit loan will gradually help you rebuild your credit from the ground up. All of this being said, what qualities should you look for if you want to find a dealer that understands bad credit loans?

Shop Around for Financing Programs

First, you ideally want to pick a car dealership that offers a wide variety of financing programs through several banks and institutions. This will ensure that you end up picking a deal that works for you and your wallet rather than settling for something out of convenience. 

Choose a Dealership With a Large Inventory

The right dealership will also have many different car and truck options for you to choose from. Having many vehicle options at your disposal will allow you to make a choice that is truly right for your needs while getting your money’s worth. 

Pick a Dealer That Understands Bad Credit Loans

Further, a dealership that understands how bad credit loans work will not send your credit information to different banks and institutions. Why? Anytime a credit company or bank sees your credit information, your credit score will decrease. The right dealership will want to partner with you to help rebuild your credit score, not make it drop even more! 

Find a Dealer That is Reputable and Trustworthy

Think of your relationship with your dealership as being a mutually beneficial partnership. Sure, they get your business, but in return, you should be able to successfully rebuild your credit. To do this, you need to ensure that the dealership you pick will report each payment you make to the credit bureau. This is the main action that will boost your credit score over time and make your finances easier to manage in the long run.

Have a Clear Picture of Your Finances so You Can Figure Out What Is Affordable 

Before you go into a dealership to discuss vehicle options, it is crucial to be as knowledgeable as possible about your financial situation. Knowing what you can realistically afford will eliminate some of the uncertainty and anxiety that may naturally arise during this process. By knowing your budget, the staff at the dealership will be able to direct you towards cars or trucks that you can afford and help you navigate financing options that make sense for your budget. 

Setting Your Budget

How should you go about setting your budget? The easiest way to do this is to simply look at your total income and compare it to your total expenses. When thinking of expenses, remember to factor in the following: 

• Expenses related to any dependents you may have, such as children, elderly parents, or other family members

• Other loans you may already have under your belt

• Normal household expenses, such as groceries, utilities, or rent

Taking the time to sit down and figure out your expenses will make budgeting for a vehicle much simpler. Once you have a good idea of your income and expenses, you can figure out how much money you can allocate per month towards car payments and then calculate your maximum budget for a vehicle using our loan calculator.

Choosing a Budget for Your Vehicle

It is important to remember that knowing your theoretical maximum budget does not mean you should max out at this budget. Why? Well, there are a few reasons!

1. Expenses tend to pop up with any vehicle. Things like insurance, warranties, gas, and potential mechanic fees are why you need to leave some buffer. 

2. You will benefit from buying a more affordable vehicle. With a more expensive car or truck, you lose more money to interest every month. While the difference in the amount you lose every month might seem negligible at first, remember that you will probably be making car payments for a while, and these numbers will add up. 

3. Learning not to max out your borrowing limit will help you improve your credit score in other areas of your budget and financial life.

Given these reasons, it makes more sense to buy a less expensive car or truck, opt into lower monthly payments, and meet these payments on time every month to rebuild your credit consistently.

Choose a Warranty to Cover Unexpected Repair Costs

Regardless of how adamant you may be that nothing will go wrong, sometimes car problems are simply out of your control; in situations like this, a warranty is your best friend! The last thing you want is to run into an unexpected car maintenance cost that forces you to miss a loan payment. To prevent this from happening, we highly recommend all of our clients select a warranty when they finance a vehicle with us. 

Picking a warranty is, in some ways, like picking out a vehicle—it requires quite a bit of research beforehand! For instance, if you intend on getting a truck, you need to keep in mind how much truck repairs cost. If it costs roughly $6,000 to replace a truck engine, then picking a warranty that only covers $2,000 might not be the best move. In cases like this, having a discussion with a reputable dealership is the best way to figure out how much coverage you need and what warranty is reasonable for you based on your budget.

Changing the Way You Buy a Car With Insta Auto Solutions

At Insta Auto Solutions, we have hundreds of vehicles to choose from, as well as numerous financing options. We are confident that we can match our customers to a vehicle and loan that will benefit them in the long term. We do our best to help you rebuild your bad credit and have established ourselves as a dealership you can trust throughout the entire financing process.

We understand that each client will have a different budget depending on their financial situation. Our large inventory of cars and trucks at affordable prices will ensure that you can find exactly what you are looking for. 

When you finance a used vehicle from Insta Auto Solutions, we provide an extended warranty and a service guarantee; this means that you have the confidence that your vehicle was checked for problems and is protected for up to five years above the standard warranty agreement. We also offer a wide range of warranties that fit different budgets. By doing this, we can ensure that our clients have the peace of mind that they have a warranty that doesn’t break the bank.

Bad Credit Shouldn’t Stop You From Getting a Car Loan This Season

Regardless of what your credit score is, Insta Auto Solutions has financing options and vehicles to fit all of your travel needs this spring. If you’re ready to finance your next vehicle and rebuild your credit score in the process, contact us today to connect with a customer service representative.