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How to get an EV car loan after declaring bankruptcy in Canada

How to get an EV car loan after declaring bankruptcy in Canada

Bankruptcy can give a person a fresh start, but it also comes with a unique set of challenges you need to be ready for if you want to do well.

If you recently got out of bankruptcy and need to buy an electric car, these steps will help you get behind the wheel of a new one as soon as possible.

Bankruptcy gives you a second chance, but there are some rules

When your insolvency trustee files for bankruptcy, all of your creditors are notified and must take whatever you can pay them, which in some cases may be just pennies on the dollar.

The creditors will write this off as a bad debt, but you will still have to pay.

The creditors will report negative comments to both TransUnion and Equifax, which are agencies that keep track of people's credit.

Negative comments like these can stay on your credit report for up to seven years, which makes it hard to get a car loan.

Steps you need to take to get an EV car loan after bankruptcy

You need to start rebuilding your credit. No one will give you credit until your credit score goes up, especially in these uncertain times.

Rebuilding your credit is pretty easy; all you have to do is sign up for a secured credit card from Capital One.

A secured credit card is not the same as a prepaid card. With a secured card, your credit score will start to improve if you pay on time and don't use too much of your available credit.

An instalment loan is another type of credit you might want to add to your secured credit card.

The instalment loan doesn't have to be big. Koho has a credit-building program where you pay $7 a month for six months.

This information is sent to TransUnion, which, along with a secured credit card, will help your credit score go up.

Figuring out how much you can spend on an electric car

We've talked about how to rebuild your credit, so the next step is to figure out how much you can spend on an electric car.

To figure this out, just take 40% of your gross monthly income and subtract all of your current bills, which shouldn't be too much since you got rid of them when you filed for bankruptcy.

After you pay your rent and basic bills, the most you can put toward a car payment is the amount that's left over.

You need to consider insurance, gas, and maintenance along with the car payment. These costs can add up, so you need a good cushion.

How to get an EV auto loan after filing for bankruptcy

You have done everything you need to do to get your credit back on track, but you still need a car today.

Today, you can get a car loan, but you can't get one on your own. The only way to get a car loan is to work with a local car dealership.

These dealerships know all of the companies that give out car loans, so they can choose the one that will give you the best deal.

If you need help or advice on anything to do with electric vehicles, contact Car Nation Canada today, we can help!

Categories: EV motoring