Car Loan Options For Those With Disabilities
Written by DriveAxis.ca April 06, 2022
Many Canadians who are disabled have opted into various provincial programs such as Ontario’s own ODSP (Ontario Disability Support Program), but they often have trouble when it comes to securing car loans. There are many options available in these circumstances, provided the potential buyer understands how provincial disability programs relate to obtaining a vehicle.
Car loans for recipients of these provincial programs don’t need to suffer through the hassle of long application processes with no payoff in sight. By understanding the key dynamics of this scenario, you can become better equipped to obtain a car loan in a quick and efficient manner.
OBTAIN A CO-SIGNER
The practice of obtaining a co-signer for a car loan is nothing new, and many low-income individuals have used it as a springboard not only to buy a new car, but also to reinforce their credit rating in the process. Co-signers are attractive to loan officers, because they offer extra security and risk mitigation. However, that individual will be responsible for any outstanding car loan payments you fail to take care of, so beware. A responsible individual will leverage a co-signer’s buying power, while also protecting them from liability down the road.
CHOOSE THE RIGHT DEALERSHIP
Hopping from dealership to dealership in search of the perfect vehicle comes with its own set of risks, particularly related to credit. If multiple establishments keep running credit checks, your overall credit score could take a significant hit. Therefore, it’s best to identify and work with the right dealership from the start, before setting out in search of your next vehicle. Try to focus on dealerships that offer extra incentives to low-income buyers, but beware of “too good to be true” deals that could come with scandalous interest rates and upfront costs attached.
REPAIR YOUR CREDIT
Unless you require a vehicle right away, it might be a better idea to hold off for 6 months to a year, and instead rebuild and repair your credit. Not only is this an excellent practice that will extend far beyond just one simple vehicle purchase, but it will also prevent you from incurring any extra financial weight that could exacerbate the problem. Repairing one’s credit is remarkably easy, provided you stick to consistent on-time payments, whilst reducing the amount of debt you take on. Once your credit rate is in the green, you’ll open up a vast swathe of car-buying opportunities, typically with much better and more attractive terms and interest rates.
ELIGIBILITY THROUGH DISABILITY PROGRAMS
Buyers should read the fine print of their respective provincial disability programs, to make sure they aren’t crossing any red lines. For instance, Ontario’s ODSP program allows eligibility if the car is used as a primary vehicle. However, complications could arise if you decide to purchase a secondary or tertiary vehicle. Similarly, money received from family members or friends will not be counted by ODSP, provided that is going towards a primary vehicle. As always, it’s best to check and make sure you aren’t violating any of the ground rules, lest you lose your eligibility, or be forced to deal with complications.
There’s no reason to deny yourself a new vehicle, especially when it comes to the daily commute. While those on disability programs do tend to fall into the low-income range, the above options should make it a lot easier to obtain a car loan, and get one step closer towards the right vehicle for your daily lifestyle.
For more information on how DriveAxis.ca can assist you with your next car purchase, please contact us. We have experience dealing with customers on provincial disability programs, and we can help make the process much easier.
We also invite you to check out our past Blogs for more invaluable information about all things related to buying a vehicle.