Overcoming Credit Hurdles: ATV Financing for Bad Credit in Canada

· Buyers Guide
ATVing in Canada

Securing finance for an ATV can seem like a daunting task for anyone, but can seem especially troublesome if you have bad credit. However, it's not impossible, and with the right knowledge, you can be well on your way to owning that dream rig. Here's everything you need to know about financing an ATV with bad credit in Canada.

The Impact of Bad Credit

Bad credit scores can make lenders hesitate to extend credit, as it signals a higher risk of default. A bad credit score may come from previous late payments, non-payments, defaults or in the worst case, repossessions. It is important to note that while most lenders may try to have you believe that a 'voluntary' repo is better than an 'involuntary' repo, the truth is that both have very similar consquences. The same can be said for However, it's essential to understand that bad credit is not an insurmountable obstacle.

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Loan Options for Financing an ATV

In Canada, several lenders specialize in providing loans to individuals with poor credit scores. These lenders consider other factors, such as income stability, in addition to your credit score.

  1. Major Canadian Banks & Credit Unions: With poor credit, most major banks won't approve a powersports loan. That being said, you may be able to secure one with a co-signor and, if so, this would likely provide the lowest rate option of all. It's also improtant to note that credit unions are typically a bit more flexbile in offering loan options than the major banks.
  2. Subprime Lenders: These are lenders who cater specifically to individuals with bad credit. Subprime lenders typically charge higher interest rates due to the increased risk. Most subprime lenders in Canada will only deal through a powersports dealership and do not offer loans direct to the customer. With that in mind, you're best off finding an ATV dealership who will allow you to use your approval to buy from anywhere.
  3. In-House or Manufacturer Financing: Some ATV dealerships offer in-house financing, where they extend credit directly to consumers. This may be an option, particularly if you've had a long-term relationship with the dealer, but also may have drawbacks such as limited flexibility when it comes to ATV selection.
ATVs outside by a body of water

Tips for Securing ATV Financing with Bad Credit

  1. Choose an Honest Dealer Broker: Picking the right option is of utmost importance when deciding to move forward on a loan. There are many ATV dealers out there who will sell you a higher rate for kickbacks, force you into a warranty or push you into specific units that are less desirable. These shady practices are unfortunately common, intended to take advantage of the most vulnerable. Finding an ATV dealer who provides their fees up-front is one of the top signs to ensuring you're going with an option that steers away from those tactics.
  2. Save for a Larger Down Payment: By putting down a more significant initial payment, you reduce the lender's risk, increasing your chances of securing an ATV loan. There are lenders out there that offer 'equity deals' which are essentially deals secured by a massive down payment.
  3. Find a Co-Signer: Having a co-signer with good credit can significantly boost your chances of approval. Watch out for dealers who simply try to get the loan in the name your co-applicant as this will not help to improve your credit score and may lead to ownership disputes in the future.
  4. Improve Your Credit: While this may take time, improving your credit score before applying for a loan could increase your chances of approval and result in lower interest rates. Keep in mind that one of the better indicators to help improve credit is through an installment loan. In most cases, a credit card being paid properly will only do so much to boost your overall profile.
ATVing in a Canadian Forest

Navigating the world of ATV financing with bad credit can seem overwhelming. However, with the right approach and knowledge, you can secure your dream ATV. Remember, every financing journey is unique, so tailor these guidelines to best suit your needs.

Don't let a poor credit score deter you from the thrill of riding an ATV. Do your research using our handy ATV loan payment calculator with a full tutorial on how to use it! By considering your options, and making a strategic plan to secure the financing you need, your journey to ATV ownership is closer than you think!

Canadian Flag with an ATV parked in the background