It's a problem that many vehicle owners in New Minas and across Nova Scotia face. Your current vehicle is costing you too much money in repairs and you are starting to worry that it will eventually break down and you will be stuck without transportation for an extended period of time. It's definitely time to replace this vehicle, but your credit is not perfect and you are worried about getting a loan.
The pandemic, a sudden job loss, divorce, or an illness that prevented you from working may have impacted your credit and you are worried that trying to get a new vehicle will not be possible. Before deciding to keep your current vehicle, there are a few things you should do. It's definitely worth seeing if your credit will stop you from getting a replacement vehicle because we can tell you that first, you're not alone in this situation and two, there are multiple solutions at your disposal. Here are three things you should do if it's time for a new vehicle, but you have poor credit.
Check your credit score
This is the first thing you should do. It is actually quite simple to see your credit score and knowing the number and what it represents is very important. You can use Equifax and TransUnion to check your credit score and it’s surprisingly affordable to do so. Sometimes you can even check it for free.
When you get the number, here is a quick breakdown of what it represents: Although every financial institution will have different parameters for what represents a good credit score, scores that are 750 and above are considered very good to excellent. Credit scores that are above 650 are generally considered good while credit scores that range from 550 to 650 are considered okay. Scores below 550 aren't necessarily considered good credit, but they certainly don't mean that you can't have access to automotive financing.
It's important to understand how your credit score is calculated. Financial institutions will take into account more than just the score and will look into how much debt you have and the money you are bringing in every month. This is also a good time to remind you that by checking your credit score, you also have the ability to make sure what is on your credit report is accurate. Your credit score is based on the debts you have but sometimes, past debts can stay even once they are paid off. It is therefore important to make sure that what you see in terms of your obligations on your credit report are accurate and up-to-date. If they aren't, credit score companies like the ones named above provide ways to contest and have out-of-date or false elements of the credit report removed.
Calculate your budget
Once you know your credit score, you really have to dig in and calculate your budget so you know exactly how much you can afford for your next vehicle. Take into account all of your most important payments and then see what is left. Make sure you account for the cost of owning a vehicle including the cost of gas, insurance, registration, and maintenance. These can add between 25% and 50% to your vehicle monthly payment and are not insignificant. Having a clear budget and including a number that you can afford for your next vehicle, taking into account other expenses, is very important and will allow you to see what you can buy on the market and ensure that your new vehicle won't cause you further financial problems by stretching your budget too thin.
Contact a reputable specialized financing dealer
Once you know your score and your budget, contact a reputable dealership that specializes in financing for buyers with bad credit. Dealerships like Steel Valley Chevrolet in New Minas have experience doing business with buyers with poor credit and have access to more flexible and varied financing solutions compared to traditional dealerships that don't do a lot of specialized financing. We also have long-term partnerships with financial institutions and we can work for you to get you the loan you need.
If you need a new vehicle in your current vehicle is causing too many problems, you have options and we are here to help. Give us a call today and let's help you get a vehicle that won't let you down.
