Financing a Commercial Van in Quebec After a Repossession
A past repossession can feel like a roadblock, especially when you need a commercial van to run your business in Quebec. Traditional banks may say no, but that doesn't mean you're out of options. This calculator is designed specifically for your situation: financing a work vehicle with a credit score between 300-500, over a 72-month term. We'll break down the real numbers, including taxes and interest rates, so you can plan your next move with confidence.
A repossession significantly impacts your credit, placing you in a high-risk category for lenders. However, because a commercial van is a tool for generating income, specialized lenders are often more willing to look at the bigger picture: your business's stability and cash flow.
How This Calculator Works for Your Scenario
This tool is calibrated for the realities of the Quebec subprime auto finance market. Here's what it considers:
- Vehicle Price: The sticker price of the commercial van you're considering.
- Quebec Sales Tax (GST/QST): In Quebec, you pay 5% GST and 9.975% QST, for a combined tax of 14.975%. Our calculator automatically adds this to the vehicle price to determine your total loan amount.
- Interest Rate (APR): After a repossession, expect an interest rate between 24.99% and 29.99%. This reflects the high risk associated with a credit score in the 300-500 range. Lenders need to offset the increased chance of default.
- Loan Term: You've selected 72 months. This term helps lower your monthly payments, making them more manageable, which is crucial for business cash flow. However, it also means you'll pay more in total interest over the life of the loan.
- Down Payment: While you can input $0, a down payment of 10-20% dramatically increases your approval odds and can sometimes secure a slightly better interest rate.
Example Commercial Van Payment Scenarios in Quebec (72-Month Term)
Let's look at some data-driven examples for a buyer with a past repossession. We'll use a representative interest rate of 27.99%.
| Vehicle | Vehicle Price | QST/GST (14.975%) | Total Financed | Estimated Monthly Payment (72 mo @ 27.99%) |
|---|---|---|---|---|
| Used Ford Transit Connect | $20,000 | $2,995 | $22,995 | ~$595 |
| Used Ram ProMaster 1500 | $30,000 | $4,492.50 | $34,492.50 | ~$892 |
| Newer Chevrolet Express Cargo | $45,000 | $6,738.75 | $51,738.75 | ~$1,338 |
Your Approval Odds After a Repossession
Securing financing after a repossession is challenging but achievable. Lenders will look past the credit score if you can demonstrate strength in other areas. Your approval hinges on:
- Provable Income: This is the single most important factor. For a commercial van, lenders want to see stable business revenue or personal income. Bank statements, contracts, or invoices are essential. If you have non-traditional income sources, it's still possible to get approved. For more on this, check out our guide on Don't Tell Your Bank: Royalty Income Just Bought Your Car, Quebec.
- Down Payment: A substantial down payment (10% or more) reduces the lender's risk and shows your commitment. It lowers the loan-to-value ratio, which is a key metric for them.
- Time Since Repossession: The more time that has passed, the better. If you've re-established some positive credit history since the event (like a secured credit card), it will significantly help your case.
- Business Case: Clearly explain how this van will generate income. This transforms the loan from a simple consumer purchase into a business investment in the lender's eyes. Many business owners have fluctuating earnings, and lenders understand this. For more insight, read our article on Variable Income Auto Loan: Your Yes Starts Here.
A past repossession is similar in severity to a consumer proposal. Understanding how lenders approach these situations can be beneficial. Dive deeper with our guide: The Consumer Proposal Car Loan You Were Told Was Impossible.
Frequently Asked Questions
Can I really get a loan for a commercial van in Quebec after a repossession?
Yes, it is possible. It requires working with specialized subprime lenders who look beyond the credit score. They focus heavily on your ability to pay, meaning your current, stable income is the most critical factor. Be prepared with at least 3 months of bank statements or business income proof.
What interest rate should I realistically expect with a 400 credit score?
With a credit score in the 300-500 range and a recent repossession on file, you should expect an interest rate at the higher end of the subprime market, typically between 24.99% and 29.99%. While high, this rate reflects the risk the lender is taking. Making consistent payments will help you rebuild your credit for future, lower-rate financing.
Does a 72-month term help or hurt my approval chances?
It primarily helps. A 72-month (6-year) term spreads the loan amount over a longer period, resulting in a lower, more affordable monthly payment. For lenders, a lower payment reduces the risk of default, which can make them more likely to approve the loan, especially on a more expensive commercial vehicle.
Is a down payment mandatory for a commercial van loan after a repo?
While not always mandatory, it is highly recommended and often a requirement for this specific scenario. A down payment of at least $1,000 to 20% of the vehicle's price significantly lowers the lender's risk, demonstrates your financial stability, and dramatically increases your chances of approval.
How are taxes calculated on a used commercial van in Quebec?
In Quebec, the sales tax is calculated on the sale price of the vehicle. You pay the 5% federal Goods and Services Tax (GST) and the 9.975% Quebec Sales Tax (QST). The total combined tax rate is 14.975%, which is added to the vehicle price to determine the total amount you need to finance.
