The best used cars to finance with bad credit

What the lender is actually looking at

Three numbers: age, kilometres, and expected resale value at the end of the term. Together they set the loan-to-value ratio, which sets the rate tier and the maximum term. A car that will still be worth something in six years lets the lender approve a longer term at a lower rate; a car that will not forces a short term and a high payment, or a decline.

The models that place easiest

Every lender has favourites and the list is not a secret.

• Toyota Corolla and Honda Civic: the two easiest files in Canada, on resale alone.
• Hyundai Elantra and Kia Forte: newer for the money, long factory warranty, easy approvals.
• Mazda3: strong resale, slightly cheaper than the Corolla at the same age.
• Toyota RAV4, Honda CR-V, Mazda CX-5: the compact SUVs lenders like, and the ones families ask for.
• Nissan Rogue, Hyundai Tucson, Ford Escape: more car for the money, approvable, slightly weaker resale.

What to avoid on a first loan

Anything European and out of warranty, because the repair bills arrive while the payments are still running. Full-size pickups and three-row SUVs unless the income is there, because insurance and fuel push the all-in cost over the line. Vehicles over 160,000 kilometres, which many lenders will not finance at any rate. And the cheapest car on the lot with a bad history: a Carfax with an accident or a lien is a decline waiting to happen.

Winter, and the all-wheel-drive question

Ottawa, Gatineau, and Atlantic winters make people reach for all-wheel drive. It helps you go, not stop, and it adds a couple of thousand dollars to the purchase, more to insure, and more to fuel every month. A front-wheel-drive compact on a proper winter tire set stops shorter and costs less across the whole loan. If the budget allows both, fine; if it is one or the other, take the tires.