Financing a car
I am paying my debt off through one of those non profit agencies .I asked my counsellor for permission to buy a new car.My brother and I wanted to split on it.I have very poor credit .My brother has no credit .He is in university working on his masters degree in business.The car we wanted was 40,000 .My brother had 20,000 in savings that he was going to use as a down payment .I would make payments for the remaining 20,000.Why did we get turned down do you think ?
Would it have been better if I made a consumer proposal? My brother thinks it very poor business decision and makes no sense not to approve the loan.When you declare bankruptcy or a consumer proposal does it automatically mean no one will work with you at any price. What risk would the bank have if the downpayment was $ 20,000 . Isn’t that like collateral for the 20,000 we would need to finance . Would you expect that other banks or dealers would also decline our loan ?
This is a question that you may be better off asking the lender who turned you down as each lender has their own internal systems and controls and without a full breakdown of both yours and your brothers credit and employment histories I simply don’t have a clear idea as to what information the creditor was basing this decision on. One thing to consider is that typically a vehicle rapidly depreciates so the $20,000 down payment often is only worth a fraction of the original value once and therefore provides relatively little security for the lender.