Buying a car when you have bad credit is not a straightforward process. Many car dealers and car loan providers may refuse to approve your application to avoid the risk of you potentially defaulting on your payments.
The more efficient alternative to still acquiring a vehicle would be to purchase used cars from websites that specialize in transacting with individuals with poor credit scores. That said, this article lists the best bad credit car dealerships in Canada.
Key Takeaways
- Some of the best used car websites for poor and bad credit in Canada are Clutch, Canada Drives, AutoTrader, and Auto Park.
- Most lenders and lending platforms require you to meet a minimum monthly income threshold to apply for a loan.
- To find a bad credit car dealership near you, consider researching online, asking people in your network for recommendations, and visiting car dealership branches near you in person.
What Are Bad Credit Car Dealerships?
Bad credit car dealerships specialize in selling new and used cars to individuals with credit scores of 559 or less. Unlike traditional car dealerships and car loan lenders who like to “play safe,” these car retailers are willing to take risks in helping those with poor credit acquire the vehicle they need.
Bad credit car dealerships often work with bad credit car loan providers to offer financing assistance to Canadians with poor credit scores. Alternatively, some of these dealerships also provide in-house financing options and directly lend car loans to individuals with damaged credit.
Note, however, that bad credit car loans often come with significantly higher interest rates due to the risks taken by both car dealerships and loan providers.
Moreover, while offering collateral or finding a co-signer is not always necessary, most car dealerships will require you to show proof of income to ensure you have the means to fulfill your payment obligations.
Best Used Car Websites For Bad Credit In Canada
1. goAuto
Go Auto is a well-known automotive car dealership group that offers both used and new cars to Canadians. This group is comprised of over 60 dealerships offering 28 different brands of vehicles and is firm on its stance of not charging extra fees for documentation or administration tasks.
For interested car buyers with bad credit, Go Auto offers flexible financing and payment options. This dealership has financing specialists that’ll assist you in finding suitable loans and cars that fit your needs.
If no external lenders approve your loan application, Go Auto offers its own in-house finance company called “Yes Plan Auto Finance.” You can get pre-approved online, but ensure you prepare your proof of employment and income statements.
Potential cons: Go Auto only operates in some Canadian provinces, including Ontario, British Columbia, Alberta, and Manitoba.
2. Clutch
Clutch offers a 100% online car shopping experience for Canadians with bad credit. This company was founded in 2016 and has prided itself in offering fully transparent services.
Getting pre-approval for a car loan on this website only takes minutes, and the process is straightforward. First, browse their inventory of cars on their website, choose the vehicle that suits you best, and click the “Apply For Financing” button.
You’ll know your pre-approval results and estimated loan terms at the end of the application.
Despite being a fully online car dealer, Clutch assures you’ll get quality pre-used cars by giving you a 10-day trial period. If the vehicle doesn’t meet your expectations during this time frame, you can return it to Clutch with no questions asked.
Potential cons: You can’t test-drive a car beforehand.
Want more information? Check out our Clutch review.
3. AutoTrader
AutoTrader is an online marketplace exclusively made for vehicles. Car dealerships and private sellers can both post their listings on this website, giving flexibility on the type of car you want to acquire.
While there’s no guarantee that every car listed on this platform is available for bad-credit buyers, many car dealerships who post in AutoTrader are willing to work with individuals with bad credit.
AutoTrader’s advantage lies in its free analysis of the car’s price, condition, and estimated fuel cost. These statistics enable you to compare the value and determine whether getting a specific vehicle is a good deal compared to other used cars in your area.
Potential con: Since this is a marketplace, there’s no guarantee that every seller is legitimate.
4. Auto Park
Another excellent online used car network for low-credit Canadians is Auto Park. Located in Southern Ontario, this website offers various cars, SUVs, trucks, and crossovers from every major manufacturer of vehicles.
Auto Park provides flexible financing solutions regardless of your credit situation. To get personalized assistance on purchasing a used car, you’re encouraged to contact this dealership through a call or email.
Potential con: Auto Park only deals in Ontario and does not haggle prices.
5. Canada Drives
Canada Drives is another excellent car-selling platform with no minimum credit score requirement.
This company has years of experience working with bad credit scenarios, including those caused by late bill payments, overdrawn bank accounts, and even bankruptcy. So, as long as you earn at least $1,800 a month and have a driver’s license, this website can offer you the used vehicle you need.
Government assistance, including ODSP and AISH, also qualifies as income, so you can include them if you need to meet the minimum income threshold. The pre-approval process only takes minutes online, and anyone of legal age can try it.
Potential con: You can’t negotiate to lower the prices of cars.
6. RockCliffAuto
For 35 years, RockCliffAuto has helped people in Ontario secure car loans with poor credit scores. It specializes in working within an individual or family’s budget to secure the right financing plan for their vehicle needs.
A feature that stands out from this website is its virtual garage that allows you to “save” your favourite vehicles so you can come back and choose which one to purchase anytime. You may buy used vehicles entirely online, but in-store visits are also allowed.
Potential con: This website has a limited car inventory compared to other best-used car websites in Canada. As of writing, RockCliffAuto only has less than 200 vehicles available.
Best Bad Credit Car Dealership Loans
7. CarsFast
CarsFast is an online comparison platform exclusively made for car loans. It’s partnered with over 350 car dealerships in Canada, giving you much room to find the vehicle that best suits your preferences.
Through CarsFast’s wide network of Auto Loan Providers, including big Canadian banks like CIBC, BMO, and Scotiabank, anyone can get a car loan approval on this platform, including those with bad credit.
The application on this website takes less than 3 minutes, and there is no need to sign up for an account.
Potential con: Not every lender on CarsFast will work with individuals with poor credit scores.
Related: CarsFast guide.
8. Loans Canada
Another excellent loan comparison platform for low-credit Canadians is Loans Canada. Despite not being exclusively dedicated to car loans, this platform is partnered with numerous major lending institutions that offer car loans ranging from $500 up to $35,000.
Loan terms vary from a few months to as long as five years. Find out more about Loans Canada in our review.
Potential con: Interest rates can reach as high as 46.96%.
9. Canada Auto Finance
Canada Auto Finance is another platform exclusively focused on auto loans, offering up to $45,000 for Canadians with low credit. This service provider works with individuals of legal age earning at least $1,500 monthly and has had no repossessions in the last year.
You can complete the application process inside Canada Auto Finance in less than a minute, and no co-signer is needed to get loan approvals.
Potential con: This website does not maintain specific APRs, making it harder to predict how high your loan’s interest would be.
10. Splash Auto Finance
A division of the Rifco National Auto Finance, Splash Auto Finance specializes in offering car loans for people with non-prime credit scores. They provide up to $50,000 in car loans for Canadian residents who have a driver’s license and are earning a minimum of $2,200 monthly.
As a company that has been operating for 20 years, Rifco National Auto Finance operates in every Canadian province except Quebec. Thanks to the company’s extensive coverage, its Splash Auto Finance division is an excellent loan provider option for most individuals with low credit in the country.
Potential con: Rifco does not allow online applications.
11. Carloans411
Get your car loan approved in just 3 easy steps through Carloans411. Operating since 2008, this online vehicle financing brokerage company works with Canadians in every major province regardless of their credit score.
When applying on Carloans 411, there’s no need to input your SIN, provide a downpayment, or have a co-signer. However, you may need to provide these to get approved if your credit is extremely bad.
After submitting your application, a Carloans411 agent will contact you within 24 hours to connect you with suitable car dealerships that can provide you with car loans.
Potential con: As a brokerage, Carloans411 cannot provide the specific loan amount you can receive through its website.
How To Find Car Dealerships That Work With Bad Credit Near You
There are several ways to find nearby car dealerships you can work with despite having bad credit. Let’s go over the most efficient methods.
Researching Online
Many car dealerships maintain updated websites that provide their primary and secondary addresses in Canada. So, if you do a simple search saying “bad credit car dealerships in (your city’s name),” the top search results will often include the reputable bad credit car dealers in your neighbourhood.
Seek Recommendations From Your Network
Alternatively, you can ask your friends, family, and colleagues to see whether they know a great car dealership that works with bad credit. Although this method isn’t as time-effective as the previous one, the advantage is that you can rely on the firsthand experiences and recommendations of the people you trust.
Visit Dealerships Near You
Lastly, consider visiting local car dealerships in your city. Talk to their representatives in person and ask whether they transact with those who have poor credit scores. This approach may involve more legwork, but the benefit is that you have the potential to find car dealerships that are conveniently located near your address.
How To Get A Car Loan With Bad Credit In Canada
Getting a car loan with bad credit in Canada requires finding a car dealership or car loan lender that provides services to those with poor credit.
The companies and platforms I listed above are all excellent choices for getting a car loan despite having a low credit score. So, visit their websites and follow the instructed steps outlined for bad-credit applicants to get a car loan that suits your needs.
Remember, not all car loan providers follow the same process when approving loans to those with bad credit.
Hence, when in doubt about how to proceed with a specific car loan provider, consider asking for personalized assistance by calling their customer service number or emailing them.
FAQs
One of the best car companies for bad credit is Go Auto. It has partnerships with over 60 car dealers and offers used vehicles from 28 brands, giving you many choices in the type of cars and transactions you want.
Yes, getting approved for a second car loan with a bad credit score is possible. However, it’ll be a much harder process than getting your first, as lenders will take into account that you’re already paying for your first auto loan.
There’s no minimum credit score for buying a used car. Many lenders and car dealerships are willing to work with low-credit Canadians. However, note that for those with extremely poor credit, lenders may require you for a co-signer, downpayment, or collateral.
Yes, you can buy a car with a 500 credit score. Although this score is considered bad, many car dealerships will still help you find the financing solution to fund your car purchase.
