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Bad Credit Car Loans in Brandon

Bad Credit Car Loans in Brandon

Bad credit can make getting an auto loan more challenging, but not impossible. According to Experian, the average credit score for someone taking out a used car loan is 599 – firmly in subprime territory. So if you have bad credit, you’re not alone. With some preparation and knowledge, you can get approved for the car you need.

This comprehensive guide will outline everything you need to know about getting a car loan with bad credit in Brandon, Manitoba. We’ll cover topics like:


  • What bad credit means and why it makes getting a car loan harder
  • Types of bad credit auto loans and programs available
  • Tips for improving your credit score before applying
  • How to get pre-approved to show dealers you’re serious
  • Choosing the right car dealer for bad credit customers
  • Negotiating the best loan terms possible
  • Required application documents to have ready
  • Using a down payment or co-signer to improve your chances
  • Setting a realistic car budget based on monthly income
  • Pros and cons of new vs used when financing with bad credit


By the end, you’ll be armed with the knowledge to get the car loan you need despite less-than-ideal credit.

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What Does Bad Credit Mean?

Bad credit refers to having a poor credit history that negatively impacts your credit score. This typically happens when you have a history of missed or late payments, defaults, bankruptcies, collections, and other negative items on your credit report. Having bad credit can make it difficult to get approved for loans, including car loans, and often results in higher interest rates when you do qualify.

Credit scores range from 300 to 850, with higher scores indicating better credit health. Here is how the main credit score ranges break down:


  • 300-579 – Bad credit: Lenders consider scores in this range as high risk for defaulting on repayment. It will be challenging to get approved for financing.
  • 580-669 – Fair credit: You may get approved but expect higher interest rates. Lenders still see you as high risk.
  • 670-739 – Good credit: Most lenders will approve applicants in this range, though interest rates may still be higher than excellent credit.
  • 740-799 – Very good credit: Applicants will qualify for the best rates lenders offer.
  • 800-850 – Exceptional credit: Those with top scores get the lowest rates and maximum financing options.


In most cases, you’ll need a minimum score in the mid-600s to be approved for a bad credit auto loan. The higher your credit score within the bad credit range, the better your loan terms will be.


Why is Bad Credit a Problem for Car Loans?

Bad credit can make it much more difficult to qualify for a car loan. Lenders view applicants with poor credit as higher risk, so they will offer less favourable loan terms. There are a few key ways that bad credit affects car loans:


  • Higher interest rates – Applicants with low credit scores will almost always receive higher interest rates, which means you pay more over the life of the loan. Interest rates typically range from 3-6% for those with good credit, but can be 15% or higher for borrowers with very poor credit.
  • Lower loan amounts – Lenders often approve smaller loan amounts for buyers with bad credit to limit their risk exposure. While those with excellent scores can get approved for 100% financing, poor credit borrowers may only get approved for 50-75% of the car’s value.
  • Require down payment – Most lenders require a 10-20% down payment for applicants with low credit scores. This upfront payment shows you are committed to the purchase and lowers risk for the lender.


Shopping for a car loan with poor credit requires more preparation and research to find reasonable loan terms. But with some diligence, you can still finance a reliable vehicle even with a low credit score.


Types of Bad Credit Car Loans

There are a few common types of auto financing options for those with poor credit:


In-house financing

Many dealerships offer their own in-house financing to customers with bad credit. This allows them more flexibility than going through a traditional lender. With in-house financing, the dealership itself provides the loan and sets the terms. This option gets you driving faster, but interest rates are often higher.


Subprime financing

Subprime lenders specialize in loans to those with credit challenges. They’re more willing than traditional banks to work with bad credit borrowers. Subprime loans typically have higher interest rates and stricter loan terms. But they can be easier to obtain for those with poor credit.


Buy here pay here

Some used car dealers operate on a “buy here pay here” (BHPH) basis. This means they provide direct in-house financing on vehicles they sell, catering to customers with bad credit. You make payments directly to the BHPH dealer. These loans carry more risk, so expect high interest rates and strict contract terms if you go this route.


Tips for Improving Your Credit Score

Improving your credit score can help you get approved for a car loan and possibly even lower your interest rate. Here are some tips to boost your credit score:


Pay bills on time – Payment history makes up a significant portion of your credit score. Set up reminders to pay all your bills on time, every time. Even being a few days late can negatively impact your score.


Lower credit utilization – Don’t max out your credit cards. Experts recommend keeping your credit utilization ratio below 30%. The lower, the better.


Fix errors on your credit report – Mistakes happen. Review all three of your credit reports thoroughly. Dispute any inaccurate information with the credit bureaus to get it corrected.


Getting Pre-Approved for a Car Loan

Getting pre-approved for a car loan is one of the most important steps you can take when you have bad credit. Pre-approval gives you power as a buyer, allows you to shop with confidence, and shows dealers you are serious.

The pre-approval process involves submitting a credit application to a lender in advance. They will assess your credit and income to determine the loan amount, interest rate, and terms for which you qualify. This allows you to walk into the dealership already knowing key details of the loan you can obtain.

There are several benefits to getting a pre-approved bad credit car loan:


  • Having an offer in hand makes you a much stronger buyer, rather than desperately needing the dealer’s financing.
  • You gain negotiating leverage to secure the best possible interest rate and terms.
  • The pre-approval gives you a realistic budget for the car you can afford.
  • It simplifies and speeds up the financing process at the dealer.
  • You avoid numerous hard inquiries on your credit by shopping with a pre-approval.


The best places to get pre-approved with bad credit include your personal bank or credit union, online lending marketplaces, specialized subprime lenders, and availability from some dealerships. Compare all your pre-approved offers side-by-side before choosing one. With a pre-approval in hand, you can shop for cars with confidence and land the best possible deal.


Choosing the Right Car Dealer

When shopping for a bad credit auto loan, it’s important to find a car dealer that specializes in helping borrowers with poor credit. Not all dealerships are willing to work with bad credit customers, so do your research ahead of time to identify dealers that advertise credit approval programs, bad credit financing, or “second chance” auto loans. These types of dealers are more likely to have relationships with subprime lenders and the experience to guide you through the process.

Once you’ve identified some bad credit-friendly dealers, take time to read through reviews and feedback from their past customers. Look for recency and consistency of reviews across multiple sites to get the full picture. Pay attention to both positive and negative reviews to gauge how the dealer handles issues when they arise during the lending process. Customers with bad credit don’t have much leeway, so poor communication or misrepresentation by a dealer can make getting approved and purchasing a reliable vehicle that much harder.

A reputable dealer that specializes in bad credit loans will have a proven financing process they can explain step-by-step. They should be upfront about loan terms, limitations, fees, interest rates, and your rights as a borrower. Transparency about their relationships with lenders and success getting customers approved is also a good sign. With an experienced bad credit car dealer on your side, you can improve your chances of qualifying for a loan and negotiated better terms.


Negotiating Your Car Loan Terms

When you have bad credit, negotiating favourable car loan terms is crucial. There are three key terms you’ll want to negotiate – interest rate, down payment, and loan term.

Interest rates are what make loans expensive. The higher the interest rate, the more you’ll pay in interest charges over the loan term. With bad credit, you can expect to pay a higher interest rate, anywhere from 5-20% for a used car loan. But even a couple percentage points can make a big difference over a 5-6 year loan term. Negotiating the lowest rate possible should be your top priority.

The down payment is the amount you pay upfront when purchasing the car. Most lenders require 10-20% down for buyers with poor credit. The more you can put down, the lower your monthly payments will be. But don’t drain your savings just to make a larger down payment. Negotiate the lowest down payment you’re comfortable with.

The loan term is how long you’ll take to pay off the loan, usually between 36-72 months. Shorter terms mean higher monthly payments, but less interest paid over the life of the loan. Negotiate the shortest term you can afford the monthly payments on.

Come prepared with income and budget documentation so you can make a strong case for the best offer. Being willing to shop around for competitive rates from multiple lenders also gives you more negotiation leverage. With persistence and preparation, even buyers with poor credit can negotiate favourable car loan terms.


Essential Documents for Your Application

When applying for bad credit auto financing in Brandon, having the right documents ready will help ensure a smooth application process. Here are the key items you’ll need:


Proof of Income

Lenders require proof that you have a steady income to make your monthly car payments. Acceptable documents include recent pay stubs, bank statements showing payroll deposits, an employment verification letter, or your most recent tax return. Having multiple sources to verify income is best.


Personal ID

Valid government-issued ID is required, such as a driver’s license, passport, permanent resident card, or provincial photo ID card. Make sure you have the original card on hand, not just a photocopy.


Proof of Residence

Documents confirming your current home address are also mandatory. This could include a recent utility bill, bank statement, rental agreement, or municipal tax bill. Like income, providing 2-3 proofs of residence is ideal.

Arriving prepared with these key items will help fast track your bad credit auto loan application and get you behind the wheel sooner.


Co-Signer Option

If your credit score is very low, having a co-signer with good credit can improve your chances of getting approved for a car loan in Brandon, MB. A co-signer agrees to be equally responsible for repaying the loan. This reduces the lender’s risk since the co-signer’s good credit helps ensure timely payments.

A co-signer can be very helpful when you have bad credit, but it’s important to consider the risks and responsibilities involved for the co-signer:


  • The co-signer is equally liable – if you can’t make payments, the responsibility falls on them.
  • It can impact their credit score if payments are missed or defaulted.
  • They may not qualify for their own loans until yours is paid off.
  • You should only ask someone you completely trust to co-sign.


Having an honest discussion with a potential co-signer can help set clear expectations. Outline the repayment plan and aim to get them released from the loan as soon as your credit improves.


Down Payment Options

When getting a bad credit auto loan, the amount you put down can impact not only your monthly payments but also your likelihood of getting approved. Here are some tips on down payments when you have poor credit:


Minimum Down Payments

Many bad credit lenders require a minimum down payment, which is typically 10-20% of the vehicle purchase price. Putting down 20% or more if you can afford it shows the lender you are financially committed. With a larger down payment, the financed amount is lower, so the lender sees less risk in approving you.

While minimum down payments may be required, some special financing programs for bad credit have no down payment requirements. This allows you to get a car with $0 down if you qualify.


Down Payment Assistance Programs

Some nonprofit organizations and community programs offer down payment assistance grants or loans to help those with bad credit or low incomes. These programs provide the down payment funds so you can qualify for a car loan and get reliable transportation.

To find down payment assistance options in your local area, contact United Way, local churches and social services agencies. Some auto dealers also work with down payment assistance programs.

With a down payment grant or loan, you can avoid digging into your savings or borrowing from family or friends. Just make sure to understand the eligibility requirements and payback terms if the down payment money is a loan.


Setting a Realistic Car Budget

When buying a car with bad credit, it’s crucial to set a realistic budget based on what you can truly afford. This involves carefully calculating your monthly payment amount and factoring in additional ownership costs like insurance, gas and repairs.

First, determine the maximum monthly payment you’re comfortable with. Experts recommend your car payment take up no more than 15% of your take-home pay. Next, use an auto loan calculator to find loan terms that fit your budget. Plug in variables like the vehicle price, down payment amount, interest rate and loan length to see the resulting monthly payment.

Don’t stop there. Now estimate your monthly gas budget based on the car’s fuel efficiency and your driving habits. Get insurance quotes to factor in this key cost. Finally, budget around $50-100 per month for routine maintenance and repairs to be safe. Add all these amounts together to get your true total monthly cost of owning the car.

Setting a realistic budget from the start will help ensure you don’t end up with more car than you can afford. Stick close to your predetermined limits when shopping and negotiating to make a smart purchase.


Buying New vs Used with Bad Credit

When it comes to buying a car with bad credit, one of the big decisions is whether to go for a new or used vehicle. There are pros and cons to each option that are worth considering.


New Car Pros

Buying new with bad credit allows you to get a car with the latest features and technology. New cars also come with full manufacturer warranties, typically 3 years/36,000 miles bumper-to-bumper and 5 years/60,000 miles powertrain. This gives you peace of mind that any issues will be covered under warranty. You’ll also know the full history of a new car versus wondering about the past of a used model.


New Car Cons

The biggest downside of buying new with bad credit is the higher cost. Even with incentives and rebates, a new car is likely to be significantly more expensive than a 1-3 year old used version of the same model. This means higher monthly payments and more interest paid over the loan term with bad credit financing. New cars also depreciate the most in the first 1-3 years of ownership.


Used Car Pros

The top advantage of buying used is the lower upfront cost and monthly payment versus new. For example, a 3 year old model with 30,000 miles will cost much less than a brand new version, making it easier to get approved with bad credit. Used cars have already taken the big depreciation hit as well. You can get a relatively new used car for thousands less than original MSRP.


Used Car Cons

The uncertainty of how a used car was maintained and driven previously leads to higher risk of issues down the line. While Carfax and AutoCheck reports help provide maintenance and accident history, it can be difficult to know how the previous owner truly cared for the vehicle. Used cars also have higher interest rates and shorter maximum loan terms, often 48-60 months versus 72-84 on new.


Alternative Transportation Options

If getting approved for a car loan seems out of reach, exploring alternative transportation options in Brandon can help you get to where you need to go affordably and reliably. Public transit, ride sharing services, and biking are all viable ways to commute without a personal vehicle.

Brandon Transit provides public bus service throughout the city. Frequent routes make stops at major destinations like grocery stores, malls, hospitals, and residential areas. Monthly passes offer savings over paying per ride. Planning your commute using the Brandon Transit trip planner can optimize your route.

Ride sharing through services like Uber and Lyft are available in Brandon. This can be a flexible option if bus routes don’t fully meet your needs. Carpooling with coworkers or neighbors is another shared ride option to consider.

Brandon’s flat terrain and network of bike routes make biking a reasonable option for many. Protective gear like helmets and lights are recommended, along with planning a safe route using bike lanes and trails as much as possible. Biking allows flexibility in your schedule while providing health benefits.

If a car loan isn’t accessible, know that you still have alternatives for getting around Brandon reliably. Public transit, ride sharing, and biking can keep you mobile both affordably and sustainably.



Buying a car when you have bad credit can seem daunting, but it is still possible with the right preparations and patience. This guide has hopefully given you key information about the process of getting a bad credit car loan in Brandon, Manitoba.

To recap some of the main points, understand the reasons your credit score is low and take steps to improve it over time. Research lenders and dealerships that work with bad credit customers. Get pre-approved for financing and have your paperwork ready. Negotiate the best possible terms on interest rates and monthly payments. Consider budget-friendly used cars and alternative transportation options if needed. Bring along a down payment or co-signer when applying.

With realistic expectations and smart planning, those with poor credit can still finance reliable transportation. For further guidance and resources, check with reputable local dealerships, car loan advisors, and financial institutions. Don’t get discouraged if your application faces challenges at first – persistence and preparation are key.

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Brandon Bad Credit Car Loan Questions

To get approved for a car loan in Brandon with bad credit, most lenders require a minimum credit score of around 500-600. However, the higher your credit score, the better interest rate you can qualify for. With a credit score of 650 or higher, you’ll have a good chance of getting approved and securing a reasonable interest rate on your auto loan.

When applying for bad credit auto financing in Brandon, you’ll typically need to provide documents that verify your identity, income, employment, and residence. These usually include your driver’s license, recent pay stubs, bank statements, utility bill showing your current address, and references. Having these documents ready will help speed up the application and approval process.

With bad credit, interest rates on car loans in Brandon can range quite a bit depending on your exact credit score and history. Generally, you can expect interest rates between 10-20% for bad credit auto financing. With very poor credit below 500, rates over 20% are possible. Improving your credit score and providing a down payment can help reduce interest rates.

Most bad credit car lenders in Brandon offer loan terms between 24-84 months. 36-60 month financing is typical for used cars, while 72-84 month loans help reduce monthly payments on newer car purchases. Loan terms up to 120 months may also be available through some subprime lenders to make payments more affordable.

The maximum auto loan amount you can get with bad credit in Brandon really depends on your specific financial situation. Most subprime lenders will approve loans up to $25,000-$35,000 for borrowers will very poor credit. With a credit score in the 500s, loan approval around $45,000 is possible. Above 650, approval over $50,000 is within reach. Provide a sizable down payment to get approved for higher loan amounts.

Yes, you can still qualify for a car loan in Brandon if you are self-employed. The key is being able to document your income sources. Provide tax returns, bank statements, and financial statements to give lenders insight into your earnings. Highlighting steady revenue streams can offset the higher risk often associated with self-employed individuals.

If you’re having trouble qualifying for an auto loan from a traditional lender, some alternatives to consider for acquiring vehicle financing in Brandon include dealer financing, private lending, co-signing, secured loan/lines of credit, and lease takeovers. These options usually come with higher rates but also provide more flexible approval requirements.

Tips to boost your chances of auto loan approval in Brandon with poor credit include maintaining current employment, verifying income sources upfront, putting at least 10-20% down on the vehicle purchase, having a co-signer with good credit, showing timely payments on other bills, limiting additional hard credit checks, and being realistic on vehicle purchase price and loan terms.

Pros of new cars:** Lower maintenance costs, latest features, personalized options, full warranty coverage, and no previous wear. **Cons:** Much faster depreciation, limited inventory, and usually higher interest rates. **Pros of used cars:** Lower sticker prices, purchase outright is easier, more value retention over time. **Cons:** Higher mileage, lack of warranty, more mechanical issues, and history is unknown. With bad credit, buying used can provide more affordable financing options.

The most common vehicle brands offering bad credit financing specials in Brandon include Dodge, Chrysler, GM, Ford, Toyota, Nissan, Hyundai, Kia, Mazda, and Subaru. More affordable, popular models for those with poor credit tend to be the Dodge Grand Caravan, Chrysler 300, Ford Focus, Chevy Cruze, Toyota Corolla, Nissan Versa, Hyundai Elantra, Kia Forte, Mazda 3, and Subaru Impreza. These vehicles provide reasonable loan terms for subprime borrowers along with lower cost maintenance and insurance.

Yes, getting pre-approved for a car loan before shopping for vehicles is highly recommended. Pre-approval provides you with estimates on the loan amount, rates, and terms you qualify for based on your credit so you can better gauge what vehicles are within your budget. Dealers will often try to get you approved for a loan on the spot for maximum profit. Having financing pre-arranged gives you added negotiating leverage.


The repossession policies on bad credit auto loans in Brandon can vary a bit between subprime lenders but are generally quite strict. Typically, your car can be repossessed after just one missed or late payment. Many Brandon subprime lenders even install starter interrupt devices allowing remote disabling of the vehicle. Make sure to carefully go over the default and collection policies and procedures when signing your car loan agreement.

Some well-known dealerships accommodating bad credit financing around Brandon include Marshall Motors, Galilee Auto Sales, Sisson Auto Finance and Sales, J&J Auto Sales, Fowler Hyundai, Fowler Nissan, Murray Chevrolet, Murray Chrysler Westman, Forman Honda, Precision Toyota, and Birchwood Credit Solutions. These dealers offer in-house subprime lending, guaranteed credit approval events, and partnerships with specialized subprime auto lenders across Canada.

Putting down a 20% down payment or more is recommended when financing a used car in Brandon with bad credit to get approved for the maximum loan amount and lowest interest rates. However, many subprime lenders require little or no down payment for those with challenged credit. Putting down even just 10% of the vehicle value signals the lender you are financially committed and can help reduce rates.

When financing a car in Brandon with bad credit, make sure to account for these common fees on top of the actual interest expense – documentation fee ($300+), lien registration fee ($100+), PPSA charge ($40-$60), EFT fee ($3/payment) origination fee (1-5% of loan value), and early payout penalty (equivalent interest charge) if paying off loan early. Ask lenders to fully disclose all charges.

Yes, an excellent way to improve not just your chances of getting approved for car loan financing in Brandon, but also lowering your interest rate, is having a co-signer with good established credit co-apply with you. The co-signer becomes equally responsible for repaying the auto financing, thus reducing the lender’s risk. Make sure to make all your payments on time or your co-signers credit can be impacted.

It is possible to do a trade-in to a different vehicle and refinance the negative equity from your current auto loan into the financing for another car purchase, even with bad credit. This vehicle turnover process is quite common in Brandon. Just keep in mind that with poor credit, you often get stuck rolling in very high interest charges on continual auto loans, so try to pay down your principle when possible.

If your car loan application gets declined by regular subprime lenders in Brandon due to very poor credit, there are still some options available to obtain vehicle financing, although less ideal – you can try peer-to-peer lending platforms, use a vehicle as collateral for a secured loan, explore high risk used car dealers with in-house financing, or find a private party seller willing to provide owner financing on their vehicle in monthly installments.


The total cost difference between good credit and bad credit auto loans over 5 years can be substantial. For example, on a $15,000 used car purchase financed over 60 months, an applicant with good credit (700 score) may pay 6% APR resulting in $16,632 total paid including principal and interest. But with bad credit (500 score), the rate may be 18% APR, pushing total payments to $20,411 over 5 years – a difference of $3,779!

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