Auto Loan after Consumer Proposal?

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Auto Loan after Consumer Proposal?
« on: June 15, 2017, 06:18:35 PM »
Hey all,

I completed my consumer proposal in October 2016. Never missed a payment, and made all my payments and did everything I was supposed to do. A couple of months before I filed, I financed a brand new car on the advice of the trustee I was dealing with. The trustee's logic was impeccable: "Your credit rating is going to look a lot better now than it will after you file."

I've never been late or missed a payment on that car loan, and I've got just a little over two years left to go before the payments are done.

In addition, I got an unsecured credit card from Capital One about 18 months into my proposal and have been paying the card balance down regularly.

I've found, much to my chagrin, that getting a car loan at a reasonable interest rate is pretty much impossible. About a month ago, I walked into a Kia dealership and put in an offer to purchase on a 2017 Optima. Bank of Montreal had a very attractive 1.9% rate for an 84-month term.

So I put in an application for credit. Net result? Two banks (one of which was BMO) came back and said they'd approve the loan, but only at 10.9%, which would push the payments up into the realm of unaffordability.

So I cancelled that deal and then went over to a Honda dealer. Honda Finance would have a approved a lease on a 2017 Civic at an attractive rate, but they wanted a co-signor. "What?!", I thought. "I'm not some 18 year-old kid looking to finance his first set of wheels!" And I didn't have anyone who could co-sign for me. So I asked the finance guy at the dealership to see if a bank would do a straight finance contract over 84 months.

The result was the same as I got at the Kia dealership - none of the banks that were interested were willing to offer a rate of less than 10.9%

I'm somewhat puzzled as to why the banks and lenders are operating like this. It's as if the car loan I got just before the proposal and the Capital One card and the history of steady, on-time payments meant nothing in the banks' decision-making process. Nor does it matter that I have a reasonably good job that is secure and relatively well-paid.

It's as if their attitude is, "we'll only give you a loan if you let us gouge you, or you accept being humiliated by being told to get a co-signor."

So I'm resigned now to the idea that a new car is out of the question for me for the next three years, which is when the proposal drops off my credit report and I might then be able to command a reasonable interest rate on a loan. I refuse to be gouged just because I made a mistake and had to file a proposal. Maybe they would have preferred I went bankrupt instead, with the creditors involved getting less money?

I've considered the idea of going with a pre-owned vehicle, but interest rates for such cars are higher and the loan terms are shorter, and if you consider how expensive cars have gotten lately, even a car 1 - 3 model years old is going to command at least $16 - 17K, if not more, if it's any good. The end result is that the payments aren't any better than they would be with a new car.

Friggin' banksters and lenders. Idiots and fools, the lot of them. It seems they just love to put people into penalty boxes if they've had past credit problems and then try to make their lives miserable by endlessly punishing them. Never mind that doing so just drives away business and generates a lot of ill-will. Grrrr.... I wish there was a law that would force banks and lenders to print the following on their credit application forms: "If you've filed for bankruptcy or done a consumer proposal in the recent past and made all the payments, don't bother applying, as your credit application will not be approved. If we had our way, you'd never be approved for any form of credit again."

It's enough to make me say that I will never borrow for anything ever again or buy a new or used car. If the banks want to be that sticky, fine. They can all go and get stuffed!



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Re: Auto Loan after Consumer Proposal?
« Reply #1 on: September 09, 2017, 03:42:15 PM »
I was considering replacing my 9 year old car early this year. My consumer proposal is fairly new - a couple of months old.
Anyway, I contacted the local Toyota dealer and asked what rate would I be looking at given my credit score. The sales guy told me it's between 15-25%. Thanks but no thanks. It's a total rip-off!
I'll stick with the old car for now until I'm done with the proposal.


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