The Non-Prime Car Loan industry in Canada has seen a dramatic change over the past years. Prior to the Sub Prime market crash in 2008 people seeking Sub Prime or Non
Prior to 2008 People seeking Bad Credit Car loans had a better opportunity to get a car loan in Canada. Now there is only 2 Major Banks and 2 Private Financing Firms offering Non-Prime Car Loans in Canada.
The Only Bad Credit Car Loan Lenders that Actually Report to Equifax
TD Financial Services (Previously VFC)
Scotia Dealer Advantage (Previously Travellers Lease)
The Biggest Player in the Non-Prime sector has to Be TD Canada Trust since it’s taking over of VFC to form TD Financial Services.
TD Financial Services seems to be the most aggressive buyer of Non Prime Car Loans in Canada. They offer higher interests rates then prime customers however they are flexible with their customers after a 11-12 month term.
TD Financial Services has created a program that Not Only helps people with bad credit it’s helping Canadian Automotive Dealers too. Now Canadian Car dealers can offer Bad credit car loans to their customers and 12 months later get the customer back to re-write a New Car loans at far less Interest.
In the beginning TD Financial Services grants the customer a vehicle loan with interest rates ranging from 16-29 Percent. However if the customer make 11-12 consecutive Monthly payments on time TD will allow the customer to trade in their existing Vehicle at any Canadian Car Dealer. Upon the Trade in the Bad Credit Car Loan customer can take advantage of much lower interest Rates from 8.9 – 9.9 Percent.
Scotia Dealer Advantage which bought out Travellers Leasing is also a Major Player in the Non- Prime Car loans industry in Canada. Scotia Dealer Advantage offers competitive rates but is a little less aggressive on choosing its customers. With Scotia Dealer Advantage bad credit car loan customers do get better interest rates in the beginning however they haven’t created a buy back program similar to TD as of yet. Scotia Dealer Advantage selection process is somewhat different from TD Financial Services and they will sometimes approve customers that TD won’t?
Rifco is a private company out of Alberta that also offers Non Prime Car Loans at competitive rates however they seem to be somewhat lacking in aggression and seem to pick and choose their customers with no real consistency. Their Car Loan Buyers seem to be hit and miss when approving Bad Credit Car Loans and are still junior players in the Non Prime Car Loan Market.
Cafinco is another Alberta based Company that is extremely aggressive in the Bad Credit Car Loan Market. They approve Bad Credit Customers that TD, Scotia and Rifco have declined, however their approvals come with a hefty interest rate of 29.5 Percent. Carfinco will approve No Credit Customers, these are people who have never had credit and have collections but no previous credit. They also approve
Customers who have had Vehicle Repossessions. With Carfinco’s lending program you vehicle is equipped with a GPS unit that allow Cafinco to shut down your vehicle if you haven’t made your monthly payment. Carfinco is the last stop in Non Prime Lending in Canada, if Carfico declines you it’s best you consider Bankruptcy or a consumer approval.
Some people seem to believe that going Bankrupt or doing a consumer proposal is beneath them or it’s the worst thing in the world to do? This in today’s day and age is somewhat of a fallacy. Bankruptcy or Consumer Proposal may not sound like an option however it can be a saving grace. Consumer Proposals can take up to 3 years to complete but they disappear from Equifax quicker than a Bankruptcy.
A Bankruptcy can be finished within 1 year depending on your financial situation and the trustee.
Another advantage to a consumer proposal or Bankruptcy is TD Financial Services will give you a vehicle loan while you’re still in a Consumer Proposal or Bankruptcy. So you’re actually rebuilding your credit right away. Once you have completed your Bankruptcy most major Banks will look at re lending after 4-5 years from your discharge.