How to Get a Car Loan in Ontario with Bad Credit [UPDATED 2019] - Approval Team Canada - Under New Management
Something Great
Is Happening

How to Get a Car Loan in Ontario with Bad Credit [UPDATED 2019]

Buying a new car can be one of the most exciting purchases one makes within their lifetime. Unfortunately, for many people, getting leasing or financing for their new vehicle is difficult.


Bad credit can affect anyone, and in the cases of new immigration, it’s possible you don’t have a credit history at all.


The good news is that neither of these situations necessarily mean you won’t be able to get that new car you’ve been looking at. Here are a few ways you can buy a car with poor or no credit.

How to Buy a Car with Poor Credit

While getting a loan or lease for a new car will likely have some restrictions and be more difficult with bad credit, it is most definitely possible. A few things you can expect to run into are:

  1. Higher than average interest rates.
  2. Less expensive vehicle options.
  3. Larger monthly payments.
  4. A smaller lease or loan.

Fortunately, there are some things you can do that will help make it a little easier to get approved for that lease or loan.

  1. Check your credit score and resolve any issues you can to improve it.
  2. Consider looking at cheaper vehicles that would require a smaller loan or lease.
  3. Look for lenders that specialize in getting an auto loan with bad credit.
  4. Save some additional money to allow for a bigger downpayment.
  5. Visit the bank ahead of time and ask about getting pre-approved for a loan.

Interest rates with bad credit tend to range between 10% and 29.5%, with good credit applicants getting rates of 10% or lower.



How to Buy a Car with No Credit


In cases where you have no credit history at all, even with a job that pays more than enough, it can be difficult to obtain a loan or lease. This issue is common amongst new immigrants to Canada who are struggling to establish credit in their new home.


Here are a few things to keep in mind if you find yourself in this situation:


  1. Any financial history you have outside of the country is not relevant in Canada.
  2. Making a bigger down payment will still help your chances of approval.
  3. There are lenders available that specialize in situations involving new Canadians.
  4. Building any type of credit in Canada will help your approval rate.
  5. Pursuing a cheaper vehicle will help you get approved.
  6. Understanding the credit process in Ontario will help avoid delays and surprises.


Every year, over 100,000 new people immigrate to Toronto and it’s surrounding cities. About one-quarter of those need a car within a year of arriving, making programs and assistance fairly easy to find.

How to Improve or Build Your Credit Score

If you find yourself with bad or no credit, it is still very possible to build it up in order to help you obtain financing assistance. The Financial Consumer Agency of Canada, or FCAC, offers these tips to anyone trying to improve their credit or build it from scratch.


  1. Pay off any bills, like the internet, phone and rent, on time.
  2. Open a credit, bank, or loan account with small limits, then pay them off quickly.
  3. Pay any previous debt you have as soon as possible.
  4. Avoid making any new credit applications.

You Can Still Get a Car with Bad Credit

All these tips will help you to rebuild your bad credit as well as build one from scratch if you have just moved to Ontario. They help to show potential lenders that you can be trusted to make payments on time.


Regardless of how bad your credit situation is, buying a vehicle is still an obtainable goal. We can help you get approved for the car you want.

Start Now!


Leave a comment