Canadian-Owned and Operated Since 1985June 25 2024,
Are you looking to purchase a new or used vehicle, but your credit score isn’t what you’d like it to be? Then consider getting a subprime auto loan. When your credit score isn’t high enough, then you’ll need a special arrangement to help finance your vehicle purchase, which is where subprime auto loans can help.
How Does a Person Get a Subprime Credit Score?
Generally, a credit score below 660 is considered subprime. There are many reasons why a person might have a subprime credit score, including being new to a country and not having established credit history yet, or perhaps a person might have missed some credit card payments, which will be negatively reflected in their credit history. Subprime auto loans help individuals like this and others by offering them loans despite their less-than-stellar credit history, which helps them get the car they need.
How Does a Subprime Auto Loan Work?
Subprime auto loans can help to put you behind the wheel of a new car but with some caveats. Generally, a subprime auto loan will have more fees attached to it than a prime auto loan, and some subprime auto loans may charge higher interest rates to borrowers. Also, subprime borrowers may be required to put down a larger down payment for a subprime auto loan than prime borrowers.
Because a lender is taking on more risk by supplying a subprime borrower with a loan, these fees and higher interest rates help to mitigate the risk and make it possible for subprime borrowers to get the loans they need. Another point to consider is that subprime auto loans may have a shorter repayment period, which may lead to higher monthly payments over the term of the financing agreement.
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Benefits of a Subprime Auto Loan
Individuals with credit scores that need some work can benefit from subprime auto loans as, when they make their payments on time and in full, and fulfill any other terms of their financing agreement, it will be reflected in their credit history, and lead to an improved credit score.
With time and proper repayment of debt, subprime borrowers can increase their credit scores and negotiate better auto loan rates. Another benefit is that this style of loan will allow you to get a car no matter your credit score.
Get Behind the Wheel of a New Car
Whether you have no credit, low credit, or even subprime credit, your local Dilawri-franchised dealership has flexible financing plans that consider your unique financial circumstances. With a little planning and the right help, you’ll soon be driving off the lot in a vehicle you’ll love. Contact your local Dilawri-franchised dealership today and see what our exemplary teams can put together for you.
