What Does Buying a Car “OAC” Actually Mean?

What Does Buying a Car “OAC” Actually Mean?

Written by DriveAxis.ca September 14, 2022

Embedded deep in the details of any car contract are abbreviations that tend to go unnoticed by a lot of consumers. One of these is “OAC,” an abbreviation for a particularly important piece of the car-buying process. When OAC is tacked on to any vehicle’s paperwork, it represents a need for the customer to do some checking before moving forward.

Doing so will prevent a lot of wasted time and frustration for both the vehicle buyer, and the salesperson. Understanding the details behind the abbreviation OAC will allow you to walk into any car dealership with the intent to buy, instead of having to come back at a later date.


The abbreviation “OAC” stands for “On Approved Credit,” which itself seems very straightforward, but it can have different connotations depending on what kind of deal you’re trying to ink with the salesperson. Plainly said, OAC means that you must have the appropriate credit score to be able to buy a vehicle with a given dollar value attached to it.

However, it can also mean different things when it comes to criteria such as APR (Annual Percentage Rate) financing, and other options. The value of your credit score will often determine the premium purchasing options available to you, including any special offers. Bear in mind that having approved credit may not automatically entitle you to the creme de la creme of purchasing options, which is where a little haggling might come into play.


An attractive set of purchasing options can go a long way towards sweetening a vehicle purchase. It often means less money paid out over the long term, especially if you are able to take advantage of much lower interest rates. Achieving OAC status does not mean you need to have an immaculate and impeccable credit score. Oftentimes, you merely need to meet a minimum credit score level that indicates your ability to pay your loan.

If you are not able to meet the criteria for OAC financing, you can always turn things around with a little bit of work. Even something as simple as finding a lucrative new job can drastically shift your purchasing power, and give you more options when it comes to buying a vehicle. Beyond that, the typical criteria associated with good credit still applies, such as making all of your minimum payments on time, consistently, and never missing a date.

Another factor is debt-to-income ratio. If yours is already too high, any lender will deem you a credit risk due to overextension of your available credit. To solve this, focus on lowering the amount of debt you hold in order to get you past a certain threshold where your credit score shifts into the green. Lenders want to make sure you aren’t burdening yourself with too much debt that you can’t pay back.


Contrary to popular belief, OAC financing is not the be-all and end-all when it comes to buying a vehicle. There are other options available to buyers who may not meet the criteria for OAC financing, yet still want to make a purchase. For instance, buying a pre-owned vehicle often means paying a far lesser amount due to depreciation. Even a relatively new car only 1-2 years old can be acquired for a large chunk of the initial cost stripped away.

There may also be room to negotiate with the dealer when it comes to the length of your loan. Oftentimes lenders will greenlight a vehicle purchase if the loan is stretched out over a longer period of time, which produces smaller monthly payments. However, the longer your loan, the more interest you’ll pay, which may mean sacrificing thousands of dollars for the sake of lower monthly payments.

Another option is pre-approval, which determines your price range when shopping for a new vehicle. This takes into account your financial situation, and provides you with a framework to measure the price of a vehicle against. It also signals to dealerships that you’re ready to buy, rather than browse.

DriveAxis.ca understands the importance of finding the right vehicle, and we work with thousands of clients who are not able to achieve OAC financing status. The journey doesn’t stop with a credit application getting rejected, and we’re here to offer the best alternative options.

Interested in buying a vehicle, but aren’t sure if you measure up to OAC status? It doesn’t matter; we want to hear from you. Let DriveAxis.ca handle the intricacies of getting a car loan, while you focus on browsing our inventory of vehicles to find just the right one.

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