What is Subprime Credit in Automotive Financing?

Two people handshaking over paperwork

When shopping for a vehicle, it’s normal for drivers to run into terminology they don’t quite understand, especially when it comes to financing. When exploring options for financing their vehicle purchase, drivers may have encountered the term “subprime credit” or “subprime financing.” But what does subprime credit entail? To help drivers understand their financing options, the team here at Southbank Dodge has put together a blog post below explaining subprime credit.  

Read More:
How your Monthly Car Payment is Determined
Can I Get a Car Loan with Bad Credit?
Rebuild Your Credit with a Car Loan

Subprime Credit Definition for Automotive Financing

Subprime credit is a term used to describe borrowers who have less-than-ideal credit. This category of borrowers encompasses those who have a credit score that isn’t quite high enough to obtain the best, or “prime,” interest rates currently available. According to current estimates from leading financial experts, about a third of Canada’s 30 million active consumers currently fall into the subprime credit category. 

A couple meeting with an automotive financial expert.

Does Having Subprime Credit Mean I Can’t Get Financing?

Fortunately, just because a vehicle shopper has subprime credit doesn’t mean they’re ineligible for automotive financing. Many dealerships, such as Southbank Dodge, are willing to work with drivers with subprime credit. Although these vehicle shoppers may not have access to the best interest rates, an automotive finance expert can help them find the best option for their individual needs and circumstances. 

How Can Drivers Improve Their Credit? 

Drivers looking to improve their credit can do so by establishing a history of regular, on-time payments. A car loan is a great opportunity for drivers to rebuild credit, as it allows them to show their ability to make consistent payments on a major loan. 

Get Automotive Financing Through Southbank Dodge 

Need help with financing your next vehicle? The team here at Southbank Dodge is here to provide you with the resources and expert assistance you need. We understand that automotive financing can be stressful, which is why we’ve streamlined our process to make it as intuitive and hassle-free as possible. Don’t hesitate to call our financing department at (613) 706-7747 if you have any questions, or send us a message through our secure online contact form