As a potential car buyer having a stained credit report, you might be wondering how you could become approved for vehicle financing. The answer comes in the form of subprime car loans. In case, your credit score has been below 620 and you have retained a history of making late payments, you would be most likely a top candidate for one of the several available subprime car loans.
Personal Car Finance is a complete subsector of personal finance, with numerous different products available. These include a straightforward car loan, hire purchase, personal contract hire (car leasing) and Personal Contract Purchase. Therefore, car finance includes but is not limited to vehicle leasing. These different types of car finance are possible because of the high residual value of cars and the second hand car market, which enables other forms of financing beyond pure unsecured loans.
Car finance arose because the price of cars was out of the reach of individual purchasers without borrowing the money. The funding for personal car finance is provided either by a retail bank or a specialist car financing company.
Finding the perfect loan for you
You should be made aware of the fact that not all of these loans have been the same. This implies that you would be required to do some homework to find the perfect loan for you. You would be required to pull your own credit report. It would be the first good step to take, as you should know just as much about your credit rating as the lenders who have been offering subprime car loans. In case, you find inaccuracies or errors on your credit report, as several people do, you should take time to fix the problems, so that your report would be as clean as it possibly could be.
Obtaining subprime car loans
Subprime car loans have been a boon for car loans for bad credit Canadians. It could be acquired from dealers, but you should remember that a dealer gets a cut on the entire car financing deals that they land. This implies that any loan a dealer would manage to get for you through a financing company or bank would probably wind up being more costly for you. It would be costlier than you contacting the lending institution on your own. It would be therefore, best to secure your loan before stepping foot inside the dealership. Subprime car loans have been known to feature various rates. Apparently, it makes it imperative to have a look around before selecting the dealer.