in 3 simple steps
Best way to finance a used car in Ontario?
How does car financing work at Garston Motors?
Garston Motors believes that everyone in Canada deserves a chance to own a reliable pre-owned vehicle, no matter what their credit rating shows.
Our auto finance specialists have helped over 3,000 customers to get financed at the lowest rates available.
Frequently Asked Auto Financing Questions
1) Late payments
Late payments have a strong negative effect on your credit and should be avoided if at all possible.
2) High debt to income ratio
Auto finance companies may be weary if you are carrying a lot of debt against your income. When determining your debt to income ratio, the formula is fairly simply ([total debt/total income] x 100). The percentages rank accordingly:
0-36%: A manageable debt to income ratio
37-42%: A slightly high debt to income ratio
43-49%: An unhealthy debt to income ratio
50%+: An unmanageable debt to income ratio (seek professional assistance)
Sitting above 43% you may have some difficulties obtaining a car loan. Evaluation of your finances at this point in time are prudent.
3) Past bankruptcy
Any combination of these three factors can make finance companies nervous. These factors are what makes up your credit score that is used by auto finance companies to determine what kind of auto loan you qualify for.
Just because you may not fit some of the criteria the lender is looking for, doesn’t mean you won’t qualify for a loan. Some exceptions can be made and there are lenders that would accept government income sources but down payment maybe required.
We are here to help negotiate the best possible approval for you. Which is why you want to come directly to the source and not get bounced around from place to place, your file will be put directly with one of our finance specialist that will work in communication directly with you to ensure you are involved every step of the way.
Typically terms will run anywhere between 36 Months and 84 Months (Shorter or longer terms are sometimes possible).
With Garston Motors’ Online Car Financing Application, you can submit it securely without having to explain the whole story. Our vehicle finance specialists will process your car loan pre-approval if that is the case (without judgment).
While getting a loan for a car after bankruptcy can be a challenge, they are not impossible! It’s likely that (if you meet the minimum income requirements) providing the lender with paperwork to support your situation can make the process quite simple. If for some reason your application is still not accepted with supporting documentation, adding a co-applicant or co-signer to your loan can make the process much smoother.
Some people will head to a pre-owned car dealership with a specific vehicle in mind and will find out the monthly payment was much greater than they expected. Why is that? While part of the car dealership loans is calculated based on the credit rating, what are the other factors?
Factor 1: The Age of the Vehicle
Most people think that the main factor determining the monthly payment on an auto loan is their credit rating. While credit rating does affect the loan, the main consideration is the age of the vehicle you are selecting. Think about it – if you’re looking at buying a 2000 Honda Civic, is the auto finance company going to bank on the car lasting another 5-10 years when selecting the term for the loan? Likely not. When getting a loan for a car the golden rule is the newer the car, the longer the term. This will mean that you are paying for a longer period of time, but making payments for an additional year or two can great reduce the monthly amount.
Factor 2: The Vehicle’s Mileage
Similar to the age of the vehicle, a lender isn’t going to put a 5-year term on a vehicle that already has 300,000 KM on it. While the car may last those full 5 years, there’s no guarantee and the lender isn’t going to risk it.
Factor 3: Your Down Payment
A substantial down payment can greatly reduce the amount of the loan, therefore reducing the monthly payment.
Factor 4: Your Credit Rating
The credit rating of the applicant does have an impact on the interest rate at which the loan is offered, which in turn affects that monthly payment. In cases with poor credit, it may be beneficial to consider purchasing a newer vehicle on a longer term to allow for more flexibility in your monthly payment.
When applying for an auto loan it’s best to consider your options and what will work for your monthly budget. Garston Motors will offer you the term and interest rate options available to suit that budget, and will work with you to get the car you love at the price you can afford. Apply online today!
In order for us to process your car loan application and send it to our lender’s network we will need:
Proof of Employment or Income
Typically you need to be at your current job for three or more months and make at least $1800/month. Other sources of income, such as certain types of government assistance may also be accepted other than Ontario Works/Welfare.
It is necessary to have a valid driver’s license and be the age of majority in the province that you live in. Lenders know that customers are more likely to pay back their car loan if they can legally drive.
The lender wants to be able to take the car loan payment out of your bank account each month. The easiest way to do this is to get a void cheque or stamped pre-authorized payment form.
In order to complete your loan documents you must provide the lender with your current address.
Although a down payment isn’t always necessary, it will often help. The less you have to finance, the more likely the lender will be to approve your car loan.
How to buy a car with bad credit? That’s a question we get a lot. Yes it is more common than what you though. We’ve found it very common that people with credit difficulties are embarrassed to discuss their situation. Once you’ve gotten into a tight situation with your credit it can be a challenge to get out, and having to explain to people over and over again what went wrong can be a painful experience. Just because you have credit issues doesn’t mean you don’t deserve a second chance. Although financing a vehicle with bad credit looks difficult, there are multiple lenders out there that are looking specifically for your needs. So, yes a car approval is possible. Apply comfortably with our online car loan application.
Once the lender has pre-approved you the process becomes MUCH simpler. Meet with our Canada auto finance specialists to discuss what you need from your car. Our in-house car financing team will recommend several different options that will fit your needs and your budget. Once your vehicle is selected, it’s simply processing the auto financing paperwork and you’re ready to drive away.
Once you have found a vehicle that you like, you should have no trouble getting access to your money. You will need to go to your lender and give them the exact amount that you are going to need to borrow. You are going to have to go over all of the loan documents with a loan officer. They will go over all of the terms of the loan and make sure that you understand them. You will then have to sign off on the loan, and they will provide you with the money that you need to make the purchase. Apply for car loan today!.
Although a down payment isn’t always necessary, it will often help. The less you have to finance, the more likely the car finance company will be to approve your car loan. A higher down payment on bad credit auto loans may be required. While this may be hard for people in these situations, offering some down payment shows your dedication and gives the finance companies some peace of mind.
If you do not have good credit, one of the best ways that you can get a loan is to get a cosigner. Having someone cosign an auto loan with you is going to substantially increase your chances of getting approved for the money that you need. When you get a cosigner, the car finance company is going to be evaluating the cosigner’s credit instead of yours. For the cosigner, this is a very risky proposition. If you do not pay your bill, the cosigner is going to have to start paying. If the loan goes into default, it is going to negatively affect the cosigner’s credit just as much as it does your own. The cosigner is essentially guaranteeing the loan, which is something that a professional lender is not going to do because of your credit score.