Bad Credit Car Loan Blog

Don’t be fooled by CarProof report when buying your next used car!

May 13th, 2010

This article looks into how to interpret a CarProof report properly, understanding the pros and cons of such report.

So you have probably heard of the CarProof report that is currently available in Canada, but without the proper information to decode such report it can be quite dangerous to the average consumers. Although it is a great idea to check on the vehicle history to make sure it is in a reasonable condition, but this double edged sword can work against anyone who has a vehicle with an accident repair on it. Many of us have no idea about the average cost when you take your vehicle into a body shop, the cost of repairs can be astronomical. For example if you drive a Honda Civic and you have hit a shopping cart which damaged your front bumper and embedded few scratches to your driver side fender. It is only natural for you to repair your car under your insurance policy, but this simple repair can cost as much as $2000 in body shop bills. When it comes to selling your vehicle in the future, your buyer may ask you to provide such report, and refuse to purchase your car due to the claim. CarProof report if interpreted incorrectly can cost you thousands of dollars in resale value. What if you drive an exotic sports car? Did you know a bumper replacement on a Porsche can cost as much as $5000? It seems like such a big deal when it is not.

It is very difficult to find a vehicle on the market today without any kind of accident repairs, due to the lack of description and breakdown of the repair value, a CarProof report can really hurt one’s resale value if you had a claim in the past. Usually a repair cost less than $3000 is none serious, and a repair costing less than $5000 should be noted. But if a repair claim exceed $10000 it can be considered high, but keep in mind if the person is driving an exotic sports car, that can be just one bumper and fender job. Due to this recent trend in the consumer, may dealers are paying out of their pocket just to have a clean CarProof, there are many ways to get around the issue. For example a customer may have just finished a body shop repair, and it will take months before the claims are shown on the report itself. Therefore if you solely depend on this report to base your purchase decision on you maybe buying a vehicle that is overpriced.

In conclusion, to better protect yourself in your next purchase. Bring the potential vehicle to a trusted mechanic, let him produce you a real life inspection that can be backed up. Use the report carefully and don’t fool yourself into thinking if the report is clean then you have made the right choice. This article is brought to you by Auto Credit Financial, your credit specialist when it comes to used car financing. Visit us online for more helpful articles at http://www.autocreditfinancial.ca

Auto Credit Financial Canada is Toronto’s top bad credit car loan provider, we have helped over hundreds of people to get into their next car loan regardless of their credit history. Visit us online at http://www.autocreditfinancial.ca

How to protect your self from buying a lemon when it comes to used cars – part two?

March 13th, 2010

This is the part two of the article how to protect your self from buying a lemon when it comes to used cars, to continue our discussion on accident repairs when it comes to a used car. Other tips on how to spot an accident repaired vehicles aside from the body VIN etching stickers can be paint color. When a vehicle is repainted for whatever reason, it is difficult to match the paint color, this is due to the fact older paint has been exposed to the elements for many years. The sun light, UV rays, and rain has taken its toll and most likely faded the paint to a much lighter shade, when new paint is applied it is virtually impossible to match the older paint color. This is especially true when it comes to colors such as silver, beige, or any light metallic paint. A good paint to match would be black or anything very dark. But never the less if you see the doors on the vehicle doesn’t match in color 100% chances are one of the doors has been painted in the past. When it comes to body work on a vehicle, one should not automatically assume the worst, many times a car is repainted due to scratches, dent, scraps, and it can be something very minor. Alarm bells should go off if the part has been replaced all together, it can be something major.

Body shop repair bills are usually very high, from a simple bumper replacement with new paint, that can cost easily $700 and more in Canada, add additional fees of rental cars, and detailing. The total bill of that repair can run as much as $1000. The amount indicated on the CarProof report can be deceptive to untrained eye, usually you shouldn’t be concerned if the repair bill is less than $3000, it can be as simple as the front and rear bumper replacement. If the vehicle has frame damage it is usually obvious when driving the car, especially at high rate of speed. If the produces unusual noises, or you have a hard time keeping the steering wheel straight, chances are the frame has been damaged and it is no longer straight producing an uncontrollable driving behavior. In low speed, if the vehicle pulls hard to one side it also can be a good indication of body frame damage. But the best way to tell a car has major damage is to bring the vehicle to your local mechanic for a thorough inspection.

Sometimes the CarProof report can show no accident reports, this can be the result of previous owner paying for the repair in cash, and didn’t make any claim against his insurance policy. This is a good indication the repair cost was relatively low, and the owner could afford to pay for it in full. It is not necessary a bad sign. Thank you for reading this article this is the part two of the series, it is brought to you by Auto Credit Financial Canada, to find more useful articles please visit us online at http://www.autocreditfinancial.ca or http://www.prlog.org/10573986-how-to-protect-your-self-from-buying-lemon-when-it-comes-to-used-cars-part-two.html

bad credit mississauga, bad credit brampton, bad credit car loans mississauga, bad credit car loans brampton

How to protect your self from buying a lemon when it comes to used cars?

March 13th, 2010

Buying a used car is mostly a hit and miss game in Canada. If the individual has extensive knowledge about cars, and body and paint repairs he or she may just be the lucky 50%. If not you are most likely to walk into a trap. But this market condition is not the blame of the used car dealers. There are other factors in place, such as consumers demanding ever cheaper vehicles with better qualities, along with interest rates. This condition will easily result in market place reaction of buying major accident vehicles, or out of province or country cars. Because that is the only way to meet the consumer’s demand of cheaper price. It is a double edged sword you should consider carefully, not to just blindly blame the used car dealers. So how do you spot a good used car if you don’t have any prior automotive knowledge?

First of all, try to buy the vehicles from reputable dealerships, research them online or offline to read consumer reviews or testimonials. Request a CarProof report before committing to the deal, ask the dealer to produce the report, and show you the exact amount of accident repairs if there is any. Bring a friend who is knowledgeable about body work and mechanical operations of a car if you can. If you are not lucky enough to have a friend like that, don’t worry here are few quick tips I can offer you to protect yourself from buying a lemon.

There are few manufactures that places Vehicle Identification Labels in every panel on the vehicle. Such as Honda, Acura, and BMW. Look for the stickers on the doors, hood, and trunk. That usually means the body part is original from the manufacture, and hasn’t been replaced. But it may still be painted. Usually a painted part is less concern vs a replaced part, because the damage was small enough the previous owner could get away with just paint work. That is a good sign.

This is the part one of the series, it is brought to you by Auto Credit Financial Canada, to find more useful articles please visit us online at http://www.autocreditfinancial.ca

used car financing Toronto, used car buying tips Toronto, bad credit car loans Ottawa, bad credit car loans Toronto

Lease vs finance which car loan is easier to break?

March 12th, 2010

First of all, what is the difference between a lease vs finance when it comes to a car loan? Well there are number of factors that will come into play, but the most important misconception is lease is like a long term car rental, where finance means the car belong to my name. Well it is true and not true, on paper finance will have your name on the ownership portion, and lease will have the lien holder’s name and address instead of yours. But when you look at the big picture, both lease and finance means you are taking on a loan and until the loan is paid off in full, and only then you can say you own the car. So before the lease or finance is paid off in full there is still a lien on your vehicle which restricts you from selling the vehicle without clearing the lien first. When it comes to you breaking the contract it is easier to break a lease contract vs finance for few different reasons. First of all when you lease a vehicle you are paying for the depreciation on the vehicle, not the entire loan. On every lease there is a residual value or end value. Which can also be called your buyback on the car, it is usually 40-50% of the selling price of the vehicle when it was new. So let’s take a $30,000 vehicle for example, your lease end value will most likely to be $15,000 depending on the manufacture. Usually import has a higher residual value, versus domestic vehicles. So lease use the same vehicle and let’s assume the monthly payment on the lease is $450 per month, with 0 down. After 2 years into your lease, you owe the leasing company $21,000 to pay out, and let’s say your vehicle still worth $19,000 according to Canadian black book. At that point you only need to pay $2,000 to get out of that lease. Of course the lower the mileage you have on the car the better and easier it is for you to break that lease. Rarely you will have very little chance of getting any equity when you break the lease. But occasionally when the lessee bring back a vehicle less than 10,000 km there maybe a small amount of equity you can claim for yourself.

Now when you are financing a vehicle, you are not only paying for the entire loan with taxes added. But also interest rate accumulated over the term. So the same $30,000 car can have a finance lien of $36,000. Now after 2 years into that loan, you may still have $28,000 owing on the vehicle. But when your car is only worth $19,000, to break that financing contract you will be looking at $9,000. So in short, if you are looking to get out of your future contract when it comes to a car loan, it is always easier to break out of a lease vs finance.

This article is brought to you by Auto Credit Financial Canada, Toronto’s top bad credit car loan provider, to visit us on the web please visit http://www.autocreditfinancial.ca

Bad credit Toronto, bad credit car loans Toronto, bad credit Scarborough, bad credit car loans Scarborough

How to pick yourself up after your credit stumble?

March 9th, 2010

We all know and agree today’s economy is not exactly in “high gear”, with government reassurance, and positive media influence we still can’t ignore the fact unemployment rate is high, and economic growth is near zero. And many of Canadians are fallen behind on their bills. With the upcoming tax structure, and over inflated real estate market, we maybe in for a real shock as 2010 rolls along. It is no surprise many Canadians today, some one as you or me, the working class are trying to keep head above the water in the sea of debt. And so many of us has fallen victim to bad credit score. It’s more important than ever to understand the topic of bad credit repair, gain valuable bad credit survival skills.

Credit is important measuring factor for an individual, it can affect you in many ways from a simple bank account to what interest rate you will be subjected to when taking on a loan. Those of us that are fortunately enough to have good credit ratings may enjoy low interest rates as low as 4%, to someone with bad credit history will be facing a punishing rate of 29%. Not all hopes are lost when you are getting a car loan with 29% interest attached to it. Try to think of the situation as risk management. If you need to borrow $10,000 to open a business, and you know that business will generate income far beyond your interest and payments. Would you? What if it’s not a business but an everyday necessity such as a car, if that is the tool you need to get to work and make money to feed the family. Would you consider taking a loan at high interest rate? The answer to that depends on you! No one can tell you how important something is to you, but with good re-payment after 12 month, you can renegotiate your interest rate with your lender.

It is like the honor’s system where you have gain the lender’s trust in able to lower interest rate over time. So in conclusion if having a vehicle is a necessity to you, then don’t get caught up with the high interest rate, because it is hard enough for you to find a lender in the first place. Prepare yourself, and plan well, with good re-payment you will be able to lower the rate in 12 month or less.

This article is brought to you by Auto Credit Financial Canada, please visit us online for your instant approval at http://www.autocreditfinancial.ca or for more valuable tips on bad credit car loans. We help clients from Oshawa, Scarborough, Toronto, Whitby, Ottawa, Pickering and GTA areas.

Feeling buried by your bad credit car loan?

March 8th, 2010

So all this talk about negative equity, but what is it exactly? Well negative
equity occurs when an individual takes on a car loan and before its completely
paid off, he or she applies for another one. The gap that was left on the
previous loan is now tagged on to the new one. If this occurs once it is not
significant enough to cause any problems. But imagine if this scenario occurs
three to four times in a short period of time. The individual will be buried by
such a hefty amount of loan he or she will most likely not be able to pay it
back. This snowball effect can be devastating to an individual, but there are
few effect ways to prevent this from happening, let’s look at some of the
examples.

For one, you should make a good choice of car and stick to your decision. Avoid
the habit of impulse buying and remember to pay the loan off before reapplying.
I know this is easier said than done but with the help of this article I hope
you will be well on your way to a health financial future. It is illegal in
Canada for some one to refinance their negative equity, this is a well known
fact all dealers know and understood. But in effort of making a deal and money
this is often ignored from the business managers. There are also loop holes in
the system allowing negative equity financing to occur, and many dealers use
this to their advantage to get your loan approved. Imagine your very first loan
was taken with TD bank at a good interest rate of 8%, now your next loan with
the negative equity have to go to the B class lenders with the interest rate of
12%, and your third loan comes from the lender with the interest rate of 15%.
The higher the interest rate usually means easier of approval, but it is
actually better off by paying off the previous loan with your personal line of
credit.

What if you don’t have any line of credit from the bank? And you must change
your car because of changes in your lifestyle. Well then remember this tip, pick
a reliable vehicle that is unlikely to break down to allow you to pay for the
loan in full, and less repair cost. Don’t pick anything that is older but
luxurious. Something small and fuel efficient, likely a Japanese make usually
are the best choice when it comes to lowering your payment.

For more tips and facts on bad credit car loans please visit us online at

http://www.autocreditfinancial.ca

How to minimize your monthly payment if you are taking on a bad credit car loan?

March 4th, 2010

Don’t feel like you are pushed against the wall if you have less than perfect credit. You will be surprised how many Canadians today fall into that category. A car loan’s approval and ARP or interest rate is based on your credit history, generally speaking the better the credit bureau the lower the interest rate. I mean after all it makes sense if the person you are lending money to have a good chance of returning it, wouldn’t you be more comfortable taking less interest in return just to keep him happy? And in the other extreme if you feel like your principle is at risk, you should minimize the risk by taking on a big return, otherwise it’s not worth your time right? Every time you are trying to take on a car loan, try to think about it from the lender’s perspective. That will often give you valuable insights into the world of banking and lending practices.

All of us want a lower monthly payment, and we all want to pay as little as possible and drive as nice of a car as possible. That is just human nature! So to get a lower monthly payment you simply buy a cheaper car with less capital cost and that is the first way to reduce your monthly payment. But if you have bad credit on top of that, interest rate will be your enemy so having a lower monthly payment is almost impossible. But in relative terms, you can still lower your payment in a few different ways. One of them is try to take on another loan at a lower APR rate, so for example if you’re current bad credit loan is at 21% interest rate, and you still owe $10000 on that loan. By you applying for another loan from a different lender may result in you been approved for another $10000 loan at 17% interest rate. That 4% difference can save you 30-40 dollars per month, so it will only make sense if you can get the lower rate.

The second tip is to re-apply financing after one year of repayment. The bad credit car loan system works kind like our jail, when you are on good behavior and after a while they may give you an early release, or set paroled due to that reason. It is very much the same in the car loan repayment and credit rebuilding process.

Thank you for reading this article, it is brought to you by Auto Credit Financial Canada, for more articles please visit us online at http://www.autocreditfinancial.ca We help clients in Toronto, Ajax, Pickering, Scarborough, Whitby, Oshawa and all GTA areas.

Bad credit is not really all that bad

February 16th, 2010

With today’s economic downtown, and record setting unemployment figures it is no surprised many Canadians are struggling to meet their bill payments at the month end. Many of us are penalized with bad credit, or slow payment on the credit report, and due to that are not able to finance a vehicle through the normal channels dealers offer. First of all, you are not alone in this situation, there are countless people who are in the same boat. Now if you are currently in a situation like such, you probably have noticed it is difficult for you to get any credit, or finance any loan. But all hope is not lost yet, you can apply for a bad credit car loan that will work in your favor. Because many Canadians need a car for work or family, they found themselves with no where to turn when the big dealerships turn them down for a loan. The fact is you are looking at the wrong resources for your car loan.

The difference between a bad credit car loan and a normal car loan is mainly in the interest rate. A brand new car can cost you in range of 0.9% to 8% when it comes to financing. But a bad credit car loan will range from 12% to 29%. I know the APR seems high, but when you look at the amount of money you are borrowing the cost difference is not as much as you think. For example if you took out a $10000 loan over the period of 24 month, a normal 5.9% interest rate will produce a payment of $442 while a 15% average bad credit car loan will only produce a payment of $484. The extra $42 dollars can mean the world to someone who is in need of a car loan. Not to mention a bad credit car loan can be refinanced with a lower APR or interest rate, if your repayment history is good for the next 12 months. So in essence you can break your higher interest loan and get a lower interest rate within 12 months. That is called “credit rebuilding”, where the bank sees your improvement and offer you a break on the interest rate.

But it is crucial for you not to over apply, this can be two scenarios, one where an individual is submitting credit application to 5 lenders at a time. The banks will see this as “credit hunting” which is a bad sign for getting approved. Don’t make yourself look desperate in the bank’s eyes. Also don’t over apply by applying for a loan amount that is way out of your reach, you should consult a credit specialist to find out the loan amount you will be pre-approved for. So you will not go over your limit, which can mean bad news for you as a client.

This article is brought to you by Auto Credit Financial Canada, for more related information please visit us online at http://www.autocreditfinancial.ca

Bad credit car loan terms explained

February 16th, 2010

Your credit score is an important aspect of everyday life. From opening a bank account, to getting a phone line, it is everywhere you look. Your credit score has been checked and checked again every time you are applying for a visa, mortgage, car loan, even car insurance policy. Having the perfect credit score is not the only thing you should be concerned about when applying for a car loan. There are many other factors such as the debt service coverage ratio (DSCR), is the ratio of cash available for debt servicing to interest, principal and lease payments. It is a popular benchmark used in the measurement of an entity’s (person or corporation) ability to produce enough cash to cover its debt (including lease) payments. The higher this ratio is, the easier it is to obtain a loan. The phrase is also used in commercial banking and may be expressed as a minimum ratio that is acceptable to a lender; it may be a loan condition or covenant. Breaching a DSCR covenant can, in some circumstances, be an act of default.

This ratio in today’s lending practice is set to about 30%, for example if you are making $10,000 a month as your gross income, and you currently have $3000 payment every month for your existing debt. The chances are not good when it comes to getting approved for another loan at a good interest rate such as 1-7%. But when you step into sub prime market, or bad credit lenders this ratio maybe pushed higher to accept your credit application. Of course the drawback would be paying for a higher interest rate or APR. The terms annual percentage of rate (APR), nominal APR, and effective APR (EAR) describe the interest rate for a whole year (annualized), rather than just a monthly fee/rate, as applied on a loan, mortgage, credit card, etc. It is a finance charge expressed as an annual rate. Those terms have formal, legal definitions in some countries or legal jurisdictions, but in general: The nominal APR is the simple-interest rate (for a year). The effective APR is the fee+compound interest rate (calculated across a year).

To increase your chances of approval, one should first pay off as much small debts in your name as possible. Try to keep the remaining debt (credit card debt) fewer than 50%, which will increase your score over time. Remember not to inquiry about your credit by applying for loans if you didn’t get approved. You can check your own credit score, this type of inquiry is called “soft hit” which has no effect on your credit. Only the “hard hit” or credit inquiry via a business can hurt your score. So remember keep your debt to a minimum, and good luck on your next car loan.

This article is brought to you by Auto Credit Financial Canada, for more related information please visit us online at http://www.autocreditfinancial.ca

Bad credit pickering, bad credit Scarborough, bad credit Toronto

Credit can affect your life more than you think.

February 11th, 2010

Credit, credit and credit, it is everywhere today and it is something that can affect your life more than you think. If you have less than perfect credit history, you can easily be a victim of paying outrageous interest rates when it comes to borrowing money. It is understandable when someone has bad credit history he or she will pay higher interest compare to someone with good credit, but there is a gray area where the interest rate can vary. If you are in need of a loan, and you have bad credit history you may qualify for interest rate ranging from 15% to 22% however depends on how and who you approach you may be getting ripped off by paying the 22% rather than the 15%.

Research, research and research your options. First if you are in need of a car loan, you should find the right vehicle first. And make sure the dealer you are dealing with is an actual dealership not just a credit broker. Where a broker will make additional profit from you the customer, and pass you along to a dealer in the end. First step of saving your hard earned money is to deal directly with a dealership. Try to contact them by phone or email, and make sure someone is there to answer your questions, not just some blank email that goes to no where. You can submit your application and bargain with your dealership to see what is the lowest interest rate available to you.

The dealers will usually have a financial portal open with the banks, and they will be submitting your application to 5-10 lenders, and when they receive the answers back from the lenders they can tell you who is offering the lowest interest rate and who is offering the higher one. If you are trying to re-finance your current car loan, you must make sure the APR or interest rate you are taking on to re-finance is lower than your current one. And usually you can not get re-financed by the same lender as your first loan. You should try a different source.

This article is brought to you by Auto Credit Financial Canada, for more related information please visit us online at http://www.autocreditfinancial.ca

Bad credit car loan Toronto, bad credit refinancing, bad credit Toronto, used car refinancing