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Buying a car in Grimsby after a consumer proposal

Buying a car in Grimsby after a consumer proposal

We have scoured the Internet and found articles talking about post-divorce car buying, but no one is talking about buying a car after you have gone through a consumer proposal.

So, our Grimsby auto loans team are going to give you some practical advice on buying a car once you have completed your consumer proposal.

How a consumer proposal impacts your credit score

Most of us are familiar with the impact that a bankruptcy has on our credit score. A consumer proposal is one step before bankruptcy and it will leave a negative impact on your credit score for up to 7 years.

With the proposal, you are asking creditors to reduce the total amount of debt you owe them and to stretch out the repayment terms.

The lenders will agree to the proposal but since they are not being repaid as agreed at the time of granting credit, your credit score is going to take a hit.

Legally, you are not allowed to take on any new debt until you have completed the proposal. Once you have completed the terms of the consumer proposal, you can start using credit like everyone else.

This would be a good time to get your credit report from Equifax and TransUnion.

You are establishing a baseline and can start taking steps to raise your credit score. Apply for a secured credit card and start making your payments on a regular basis, this will help boost your score and begin the recovery process.

If you find yourself in a situation where you need a car right away, there are lenders that will approve your loan even the day after you are released from your proposal but you won’t find these lenders online.

Finding lenders that will give you a car loan in Grimsby

There are lenders that cater almost exclusively to borrowers who went bankrupt or were in a consumer proposal. These lenders invest a considerable amount of time underwriting these loans, so they do not advertise online.

The only way you can access the lenders that will approve your loan is by going through a local dealership. This dealership will advertise they work with credit challenged clients.

After you have worked out which dealerships are viable, you can start booking in-person meetings with them.

During the meeting, you can explain the circumstances of your consumer proposal, did you lose your job due to the pandemic or was there a relationship breakdown of some type?

The dealership is not asking to be nosey, they are your biggest advocates but need the full story so they can explain to the prospective lender why they should give you a car loan.

Aside from the dealership helping you get your car loan approved, they are going to show you how to improve your credit score.

Sadly, most of us were not taught credit management in school but thanks to the credit experts at the dealership, you will be able to see positive gains in a short amount of time.

There is life after a consumer proposal and you can buy a car but you have to make the first move, reach out to your local car dealership now, you will be happy you did.

If you need help or advice on anything to do with auto loans in Grimsby, contact Car Nation Canada today, we can help!

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