Used Car Financing in Yukon with a Consumer Proposal: Your 84-Month Loan Breakdown
Navigating a car loan after filing a consumer proposal can feel like a challenge, but it's far from impossible, especially in Yukon. This calculator is specifically designed for your situation: financing a used car over an 84-month term with a consumer proposal on your credit file. We'll provide realistic estimates and break down the numbers so you can plan your next steps with confidence.
The key advantages in Yukon are the lack of Provincial Sales Tax (PST), which reduces the total amount you need to finance. However, with a consumer proposal, lenders will view the loan as higher risk, which is reflected in the interest rate. Let's get started.
How This Calculator Works
This tool strips away the complexity to give you a clear estimate based on your unique circumstances.
- Vehicle Price: The sticker price of the used car you're considering.
- Down Payment/Trade-In: Any cash you're putting down or the value of your trade-in. This is crucial for approval, as it reduces the lender's risk.
- Interest Rate (APR): For a consumer proposal profile (credit scores 300-500), rates are typically in the subprime category. We've defaulted to a realistic 24.99% APR, but you can adjust it. Rates can range from 19.99% to over 30% depending on the specifics of your file.
- Yukon Tax (5% GST): While Yukon has 0% PST, the 5% federal Goods and Services Tax (GST) is applied to the vehicle's price. Our calculator automatically adds this to the total amount financed. For example, a $20,000 vehicle will have $1,000 in GST added, for a total of $21,000 before your down payment.
Example Scenarios: Used Car, 84-Month Term in Yukon
To give you a real-world perspective, here are some common scenarios for a used car loan with a consumer proposal. We've used an estimated interest rate of 24.99% over 84 months.
| Vehicle Price | Down Payment | Total Financed (After 5% GST) | Estimated Monthly Payment | Total Interest Paid |
|---|---|---|---|---|
| $15,000 | $1,000 | $14,750 | ~$373 | ~$16,550 |
| $20,000 | $2,000 | $19,000 | ~$480 | ~$21,310 |
| $25,000 | $2,500 | $23,750 | ~$600 | ~$26,640 |
Disclaimer: These are estimates for illustrative purposes only. Your actual payment and interest rate will vary based on lender approval (OAC).
Your Approval Odds: What Lenders in Yukon Look For
Getting approved with a consumer proposal isn't just about your credit score; it's about demonstrating stability and a plan for the future. Lenders specializing in this area focus on a few key factors:
- Income Stability: A consistent job history of at least 3-6 months with a minimum monthly income of around $2,200 is a strong starting point.
- Proposal Status: Lenders prefer to see a proposal that is either fully discharged or has a solid history of on-time payments. Being proactive and responsible with your proposal payments is a huge green flag.
- Down Payment: A significant down payment (10% or more) drastically improves your chances. It shows commitment and lowers the loan-to-value ratio, making you a less risky borrower.
- Vehicle Choice: Lenders will favour reliable, reasonably priced used vehicles. They want to ensure the car will last the duration of the 84-month loan.
Many people believe a consumer proposal is an automatic rejection, but that's a myth. For a deeper dive into how we handle these situations, read our guide: Your Consumer Proposal? We're Handing You Keys. If you've already been turned down elsewhere, don't lose hope. Our approach is different, as explained here: They Said 'No' After Your Proposal? We Just Said 'Drive! For those who are also self-employed, we have specialized programs that can help. Learn more about how we verify income in our article on Your 'Impossible' Car Loan Just Got Approved. Self-Employed, Poor Credit.
Frequently Asked Questions
Can I get a car loan while I'm still making payments on my consumer proposal in Yukon?
Yes, it is possible. Many specialized lenders will approve a car loan while you are actively in a consumer proposal, provided you have a strong history of making your proposal payments on time. They will also require proof of stable income and may ask for a larger down payment. The Trustee's permission might be required in some cases.
What is a realistic interest rate for a used car loan with my credit profile?
With a credit score between 300-500 and an active or recent consumer proposal, you should expect a subprime interest rate. These typically range from 19.99% to 29.99% APR. The final rate depends on your income, job stability, down payment, and the specific vehicle you choose.
Does the 0% PST in Yukon actually help my car loan approval?
Yes, it helps indirectly but significantly. Because you don't pay provincial sales tax, the total amount you need to finance is lower than in almost any other province. For a $20,000 car, this could save you over $1,600 in taxes compared to a province like BC. A lower loan amount reduces the lender's risk and can make your application look stronger.
Why is an 84-month term common for consumer proposal car loans?
An 84-month (7-year) term is offered to make the monthly payment more affordable. Due to higher interest rates, a shorter term would result in a very high monthly payment that might not fit within a lender's debt service ratio guidelines. While the longer term means you'll pay more interest over the life of the loan, it's often the key to getting an approval that fits your budget.
What documents will I need to provide for my loan application in Yukon?
To streamline the process, you should have the following ready: proof of income (pay stubs or bank statements), a valid driver's license, a void cheque or pre-authorized debit form, and details about your consumer proposal (such as your trustee's contact information and payment history).
