If you've improved your credit score, you may be able to renegotiate your loan rate and terms with your lender. Find out how to renegotiate your loan.
If you’re a citizen of Quebec, then you know what a great asset a car can be. While public transit, biking, and walking can save you money and keep you fit, there’s nothing like the convenience that comes with having access to your own car, and a car loan is one of the best ways of getting it.
In fact, a car loan in Quebec can be helpful in tons of situations, such as:
- Following an accident or a breakdown – Maintaining and repairing your car can be pricey, no matter what make or model it is. Those costs are even worse when you’ve had an accident or your car becomes undrivable somehow. Wondering if you should repair your car or buy a new one? Read this first.
- Making a new (or slightly used) car more affordable to buy – Most Quebecers can’t just walk into a dealership and pay for a car with a briefcase full of cash.
- Reducing your carbon footprint or saving on fuel costs – Let’s be realistic, hybrid and electric models are usually more expensive than regular cars. Buying yourself a Tesla is much easier with a good car loan.
- Getting a vehicle-title loan in the future – Once you’ve paid off your car loan completely and you own your vehicle’s title, you can then use it as collateral to secure future loans. Always be sure, however, to make your loan payments on time and in full, otherwise, your lender might repossess your car and sell it to compensate for their loss.
Do You Already Own a Car? Consider a Trade-In
As a car loan in Quebec (especially for a brand new car) can be expensive, one way of reducing the overall price is to trade in your used vehicle.
Generally, dealerships perform trade-ins by:
- Inspecting and evaluating your car, giving them an idea of what it’s worth.
- Giving you a quote (what they’ll pay for it)
- Deducting that quote from the price of your new car, reducing the principal cost
Note: Most cars depreciate rapidly in value over time, which is why you likely won’t receive what your car is worth during a typical trade-in. However, it’s still good to do your own research and get a second opinion to determine the value of your car in today’s vehicle market. Make sure you’re getting the best price possible!
Click here to learn about some cars that have high trade-in values.
What About Other Kinds of Motor Vehicles?
Car loans in Quebec are not only a great option for consumers looking to purchase a car but can help those looking to purchase a secondary or recreational vehicle, including:
- Motorhomes, trailers, etc.
- Seadoos and skidoos
- Motorcycles and open-air roasters
- All-terrain vehicles and dirt-bikes
Things to remember in this situation:
- A vehicle loan of any kind might only land you in bad debt if you can’t afford to make your payments on time.
- A dealership might not approve you for a second vehicle loan if you’re still in the middle of paying your first.
- Your credit and finances will be examined (for both types of vehicle loan). If you’ve already got a ton of other debt and bad credit, your chances of approval will be lower and your potential interest rate will be higher (if approved).
I Want To…
What Vehicles Can I Buy With My Car Loan in Quebec?
All dealerships and other lenders want to be sure that you’ll be able to pay them back in full by the conclusion of your loan term. Because of that risk of defaulting (not following your loan agreement), your credit and financial health may be subject to examination.
If everything looks in order, you should have no problem financing:
- Pickup trucks
- Sports-Utility Vehicles
- Mini or oversize vans
Will My Application Be Denied Because of My Bad Credit?
As we said, depending on your lender’s specifications, your credit might make up a significant portion of both your approval chances and the interest rate you’ll be given. Canadian credit scores range from 300-900. For larger credit products, car loans included, a score of 650 or above should put you in sight of both unquestioned approval and the lowest interest rates a typical lender can offer.
If your credit score is below that point, don’t worry. As long as your lender sees that your income outweighs your future payments, approval shouldn’t be far away. There are even lenders and dealerships in Quebec that cater specifically to borrowers bad credit.
Just be sure to watch out for:
- High-interest rates – Since bad credit might imply that you’re a risky client, those same lenders might charge you a higher interest rate as compensation.
- Potential debt – Always be certain that your car loan payments (including principal, interest, fees, warranty, and all other vehicle-related costs) fit properly into your budget. If not, you could only be putting yourself in unmanageable debt.
- Scamming – Identity thieves, fraudsters, and other scam artists often use the idea of bad credit car loans to take advantage of those in need of a vehicle. Desperate to get approval after being rejected by conventional lenders, bad credit borrowers sometimes give away all their personal and financial information without thinking.
Click here for some information about bad credit loans in Quebec.
How Can I Improve My Credit or Chances of Approval?
While there are lenders all over Quebec a bad credit car loan, it never hurts to improve your credit for the sake of your approval, interest rate and financial health in general.
Here are a few ways you can do just that:
- Pay off your other debts responsibly (on time and in full) – Not only does this make you look like a less risky borrower, it’s one of the most efficient ways of raising your credit score and improving the look of your credit history.
- Get a secured credit card – If your credit score is so bad that you don’t qualify for a typical credit card, a secured credit card (which needs a security deposit equal to your credit limit) can help you increase your credit score until you do.
- Correct errors on your credit report – When you request a free copy of your credit report from Equifax and/or TransUnion, you may come across informational errors that have been damaging your credit score. If so, you can dispute them and soon after you should see your score go back up.
For more ways of improving or fixing your credit score, read this.
Can I pay off my car loan early?
Can I refinance my car to save money?
Can I still get a car loan in Quebec if I have bad credit?
Driving to a Better Financial Future With Loans Canada
Whether your credit is good or bad, rest assured that Loans Canada can connect you with the right source of car loans in Quebec. Just apply below and you’ll be on the road in no time!