Home auto financing

THE home auto financing is a flexible option offered by dealers or private companies, ideal for those with difficult credit or looking for an alternative to banks. It allows you to finance a vehicle quickly with more accessible conditions and a simplified process.

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Get in-house auto financing now and make the purchase of your vehicle with ease. Whether you have difficult credit or are looking for a quick and flexible solution, in-house auto financing offers you conditions adapted to your needs. Contact Quebec Auto Loan to benefit from a fast and personalized service, and leave with your car without delay!

Introduction to Home Auto Financing

Understanding Home Car Financing: Definition and Benefits

In-house auto financing is a credit option offered directly by a Prêt Auto Québec partner or a private company, often without the intervention of a traditional financial institution such as a bank. Unlike traditional bank loans, where borrowers go through strict credit checks and longer approval processes, in-house auto financing simplifies access to credit by offering more flexible solutions, adapted to various types of financial profiles, including those with more complex credit histories.

Here are the main advantages of in-house auto financing:

  • Increased accessibility: In-house car financing is often a solution for people with a bad credit or a limited credit history. Unlike banks, which typically require a high credit score to grant a loan, dealerships and companies offering this type of financing are more likely to accept customers with lower credit scores.
    • Example: If you have difficulty obtaining a bank loan due to debts past or low income, home auto financing can offer a viable alternative to financing your vehicle without going through a bank.
  • Fast Approval Process: This loan typically allows for a faster and more streamlined approval process. Companies that offer this type of financing often work directly with the buyer, eliminating the middleman and speeding up the loan process.
    • Example: If you need a vehicle quickly for a job or to manage your travel, in-house car financing can be the ideal solution to avoid long waiting times at banks.
  • Flexibility of terms: Another advantage of a car home loan is the ability to negotiate directly with the company offering the loan. This allows you to customize the terms of the contract, such as monthly payments, repayment period, and even the down payment.
    • Example: By talking directly with the institution, you could obtain conditions adapted to your budget, such as lower payments at the beginning of the repayment period or more flexible payment schedules to manage your finances.

Why choose in-house self-financing over traditional bank financing?

Home financing offers specific benefits, especially for people who face obstacles with more traditional financing methods. Here's why many buyers choose this option over a bank loan:

  1. Fewer credit restrictions:
    Banks and financial institutions often require credit scores high and a thorough check of the financial situation before approving a loan. On the other hand, home auto financing options are more flexible and accessible for people with a bad credit or little credit history.

    • Example: If you have a low credit score (less than 600), you may be turned down by a bank. However, with used car in-home financing, a dealer may be able to offer you a loan despite your situation.
  2. More flexibility in negotiations:
    In-house auto financing allows you to negotiate directly with the seller on things like the amount of the deposit, there loan term and the monthly payments. This flexibility is often impossible to obtain with a bank loan, where the conditions are generally standardized.

    • Example: If you can't provide a large down payment, a dealership offering in-house auto financing might accept a smaller deposit and adjust payments based on your situation.
  3. Simplified and fast process:
    Banks and other financial institutions may ask for a significant amount of documentation and require rigorous financial proof. In contrast, in-house car financing typically involves fewer formalities and faster approval. This makes it an ideal option for people who need a vehicle quickly and can't wait for the lengthy process of traditional loans.

    • Example: If you find a used car at a good price and want to finance it quickly, used car in-house financing can be processed in a matter of days, while a bank loan could take weeks.
  4. Financing options for used vehicles:
    Used car in-house financing is often used to finance used vehicles, an option that some banks are reluctant to finance, especially if the vehicle is older or has high mileage. Dealers that offer in-house financing typically offer more flexibility in financing these vehicles.

    • Example: If you buy a used car with more than 100,000 km, a bank could refuse the loan, while home financing used cars can allow you to obtain a loan adapted to your purchase. Note that if this is the case, the choice of a extended warranty may be an interesting choice.

Types of Home Auto Financing

This loan is a flexible and convenient option, offered directly by private companies, that allows you to finance the purchase of a car without going through traditional banks. There are different forms of in-house car financing, adapted to your needs, whether for a new or used car. Here is an overview of the main financing options available.

In-House Auto Financing: Dealership or Private Company Financing Options

This car loan is a method of credit offered directly by car dealerships or private companies. Unlike traditional loans offered by banks, in-house auto financing allows you to negotiate directly with the seller, which offers more flexibility and a more personalized approach.

Here are the main features of in-house auto financing:

  1. Direct Dealer Financing:
    Many dealerships offer their own financing services to help buyers finance their vehicle purchase, whether new or used. This helps simplify the process because the customer deals directly with the seller instead of having to go through a banking institution. These dealerships are more flexible in terms of eligibility criteria, especially for people with low credit scores.

    • Example: A buyer with poor credit (e.g., a score of 580) may be turned down by a bank for a car loan. However, the dealership may offer in-house car financing with tailored terms, such as a higher down payment and an adjusted repayment term.
  2. Flexible financing options:
    In-home car financing allows for greater flexibility to adjust the terms of the loan, such as repayment term or monthly payments. This flexibility is not always possible with bank loans, where terms are often rigid and standardized.

    • Example: A dealership might offer a financing plan where monthly payments are adjusted to fit your budget. You might negotiate a lower initial payment or reduced monthly payments for the first few months to make it easier to manage your finances.
  3. Simplified approval process:
    Unlike banking institutions, which impose more rigid application processes with strict credit and income assessments, in-house car financing offered by dealerships or private companies focuses more on the ability to make regular payments. This means that buyers with bad credit may have a higher chance of approval.

  4. Speed of the process:
    In-house car financing is often processed faster than a bank loan. Since there are no middlemen, the approval and signing process can be completed in a matter of days or even hours.

    • Example: If you have found a vehicle and need to purchase it quickly for personal or business reasons, the dealership can arrange in-house auto financing immediately, whereas a bank loan could take several weeks to be approved.

Used car home financing: Solutions for financing the purchase of a used vehicle

Used car in-house financing is a specific in-house financing option for purchasing used vehicles. This form of financing is for people who prefer to buy a used car rather than a new vehicle, which can be more economical. Used car in-house financing is usually offered by dealerships that sell used vehicles and offers several advantages for buyers.

Here are the main features of used car home financing:

  1. Financing used cars that are difficult for banks to finance:
    Many traditional banks or lenders are reluctant to provide loans for older or high-mileage cars. Used car in-home financing fills this gap by allowing buyers to finance used vehicles that would not otherwise qualify for bank loans.

    • Example: If you are buying a used car with more than 150,000 km, it may be difficult to find a bank willing to finance this purchase. A dealership offering in-house used car financing may offer a loan that is tailored to the situation, with more flexible terms.
  2. No strict age or mileage limits for the vehicle:
    Unlike banks, which often impose restrictions on the age or mileage of the used vehicles they finance, companies offering in-house auto financing for used cars are generally more flexible.

    • Example: A 10-year-old used car with high mileage might be rejected by a bank for financing, but might be a perfect fit for a dealership that offers in-house used car financing.
  3. More affordable payment options for used vehicles:
    Used vehicles are generally less expensive than new cars, so financing amounts are lower. With used car in-house financing, buyers can benefit from lower monthly payments than if they were buying a new vehicle, making car ownership more affordable.

    • Example: A used vehicle at 8,000 $ financed over 3 years via in-house auto financing can have monthly payments of only 230 $, which is much more affordable than the payments for a new car at 25,000 $.
  4. Access to financing for buyers with a difficult credit history:
    Used car in-home financing is especially popular among buyers with complex credit histories or low credit scores. These buyers often have difficulty obtaining a traditional loan for a used car and find in-home financing a more accessible option.

    • Example: If you have a credit history with late payments or a previous bankruptcy, a dealership offering in-house auto financing for used cars could help you finance the purchase despite your history.
Criteria and approval process for in-house auto financing

Getting a home loan can be a more flexible option than traditional bank loans, but it’s still important to understand the eligibility requirements and steps you need to take to qualify for this type of financing. In-home car financing, offered by dealerships or private companies, often has less stringent terms, especially for buyers with poor credit histories. Here’s a look at the eligibility requirements and approval process for in-home car financing.

Eligibility requirements for home auto financing

This home loan is suitable for a wide range of buyers, including those who have difficulty obtaining a traditional loan from banks due to bad credit or unstable financial situation. Here are the main eligibility criteria for home auto financing:

  1. Flexible Credit Score:
    Unlike banks that often require a high credit score to grant a loan, in-home car financing is more accessible to people with bad credit or limited credit history. Dealers that offer this type of financing often consider other factors, such as current payment capacity.

    • Example: A buyer with a credit score of 550 might be turned down by a bank for a car loan, but could get in-home financing with suitable terms, such as a higher down payment.
  2. Stable income:
    While credit score is less important, dealers look for signs of financial stability, including a steady income that allows the buyer to repay the loan. This income can come from salaried employment, self-employment or other regular sources, such as benefits or pensions.

    • Example: If you work part-time but receive regular benefits, this income could be considered for approval for used car home financing.
  3. Payment History:
    Dealers offering these types of loans are often more interested in your ability to make regular payments than your credit score, so they may check to see if you have a good history of paying recent bills or other debts.

    • Example: If you have a history of late payments, but your current bills have been current for several months, this could work in your favor when applying for in-home car financing.
  4. Initial deposit:
    Another eligibility criterion is the ability to make an initial down payment. In-house car financing often requires a larger down payment than traditional bank loans. This reduces the risk for the dealer and demonstrates the buyer's commitment to repaying the loan.

    • Example: A dealer may require a down payment of $10,000 of the total vehicle price to provide in-house auto financing. If the car costs $10,000, a down payment of $1,000 may be required.
  5. Employment and residence stability:
    Companies offering in-home auto financing may also look at your job and residence stability. A long tenure in the same job or at the same address demonstrates stability, which can reassure lenders.

    • Example: If you have worked for the same company for several years and have lived in the same place for a long time, these factors can work in your favor, even if you have a low credit score.

Steps and documents needed to obtain home auto financing

The approval process for in-house car financing is often faster and less formal than that of banks. Here are the typical steps to follow to obtain in-house car financing and the documents required to complete your application:

  1. Vehicle selection and discussion of financing options:
    The first step is to choose the vehicle you want to buy, whether new or used. Next, you discuss in-home auto financing options with the dealer. This step is an opportunity to negotiate the terms of the loan, such as the down payment amount, monthly payments and the financing term.
  2. Complete a funding application:
    Once you have chosen your vehicle and discussed terms, you will need to complete a financing application. This form contains basic information, such as your income, employment status, existing debts, and personal information.

    • Example of information requested: Name, address, length of current employment, monthly income and amount of other debts or payments.
  3. Necessary documents:
    To complete your auto home financing application, you will need to provide documents that confirm your financial and personal information. Here are the documents typically required:

    • Proof of identity: An official ID document (ID card, driver's license, passport).
    • Proof of income: Recent pay stubs, bank statements or proof of income from self-employment.
    • Proof of residency: Recent utility bills or rental leases.
    • Credit History: Although in-house auto financing is more flexible, some dealerships still request a credit report to review your overall payment history.
  4. Assessment of repayment capacity:
    The dealership or in-house auto finance company will review your file to make sure you can repay the loan. This evaluation is often more flexible than the banks' because it relies more on your ability to make regular payments than on your credit score.

    • Example: A dealership might agree to finance a buyer with a steady income of $3,000 per month, even with a 580 credit score, as long as the monthly loan payments do not exceed $20 of income.
  5. Loan approval and contract signing:
    Once your application is approved, you sign the in-house car financing contract. This contract specifies the terms of the loan, including the loan amount, interest rate, loan term, and monthly payments. After signing, you can take possession of the vehicle.

    • Example: If you finance a $12,000 car over 4 years at a rate of $8, the contract will state that your monthly payments will be approximately $290.
  6. Payment of the deposit and start of payments:
    Before you drive away with your new vehicle, you will need to pay the agreed initial deposit. Then, monthly payments will begin on the date specified in the contract, often one month after the vehicle is delivered.
Advantages and Disadvantages of Home Car Financing

Home financing is an attractive option for many buyers, especially those who have difficulty getting a traditional car loan from banks due to their credit. However, like any financing option, it has both pros and cons that are important to understand before committing. Here’s a look at the main benefits of home financing for buyers with poor credit and what to watch out for to avoid risks.

Benefits for buyers with less favorable credit

  1. Increased accessibility for buyers with bad credit
    One of the biggest advantages of in-home car financing is its accessibility for people with poor credit history or past financial difficulties. Unlike banks that require a high credit score and a solid financial history, dealerships or private companies offering in-home car financing are more flexible and take into account other factors, such as income stability and current repayment capacity.

    • Example: A buyer with a credit score of 550 might be denied a bank loan for a new or used car. However, with in-home auto financing, he can still get a loan, even with a difficult credit situation, by providing a down payment or agreeing to specific terms.
  2. Fast and simplified approval process
    In-house car financing is often simpler and faster than traditional bank loans. Companies or dealerships that offer this type of financing are able to process applications in a matter of days or even hours because they don't have to follow the strict processes imposed by traditional financial institutions.

    • Example: If you need a vehicle quickly for business reasons, such as commuting to work, in-house auto financing can allow you to get approved and drive away with a car in just a few days, something that would be difficult with a bank loan that takes several weeks to process.
  3. Flexibility of financing conditions
    With in-home auto financing, it is often possible to negotiate the terms of the loan directly with the dealer, including the term, monthly payments, and down payment amount. This gives you more flexibility to tailor the financing to your specific needs and financial situation.

    • Example: You can negotiate a longer loan term to reduce monthly payments or get deferred payments for the first few months to give you time to improve your financial situation. This flexibility is often not possible with a traditional bank loan, which imposes strict and uniform conditions.
  4. Used Vehicle Financing
    Banks tend to limit loans for used vehicles, especially when they are older or have high mileage. In contrast, used car in-house financing is commonly used to finance used cars, often with terms tailored to buyers with poor credit.

    • Example: If you want to buy a used car with more than 100,000 km, it can be difficult to convince a bank to finance this purchase. A dealership offering in-house car financing will generally be more inclined to finance this type of vehicle, even if its mileage or age is higher.

Aspects to watch out for to avoid risks in home auto financing

  1. Interest rates often higher
    One of the major drawbacks of in-home car financing is that interest rates are often higher than those offered by banks. This is because dealerships or private companies take on more risk by lending to people with bad credit. As a result, monthly payments can be higher and the total cost of the loan higher in the long run.

    • Example: If you get a home auto loan at a rate of 10 % instead of a bank rate of 6 %, you will pay much more in interest over the life of the loan. For a 15,000 $ loan over 4 years, a rate of 10 % would cost you about 3,200 $ in interest, compared to about 1,900 $ for a rate of 6 %. It is important to be aware of these additional costs before committing.
  2. Risk of adverse conditions
    Due to the more flexible nature of in-house financing, some dealers may offer less favorable loan terms to compensate for the risk taken. This may include very high monthly payments or very short repayment terms, making the loan more difficult for the buyer to manage.

    • Example: A dealership might offer a loan with high payments over a 2-year period, increasing the financial pressure on the buyer. It is essential to read the terms of the contract carefully and make sure the payments are feasible within your budget.
  3. Risks of rapid seizure in the event of non-payment
    In-house car financing may include quick repossession clauses in the event of payment default. Since dealers take a risk by lending to buyers with less favorable credit, they can insert terms that allow them to repossess the vehicle after just a few missed payments.

    • Example: If you miss several payments in a row, the dealer may have the right to seize the vehicle without going through a lengthy legal process, which could leave you without a car and without immediate recourse. So it's important to understand the consequences of missing a payment before signing an in-house car financing contract.
  4. Large deposit required
    Dealerships offering in-house car financing often require a higher down payment than banks. This helps reduce the risk for the lender, but it can be a barrier for some buyers who don't have the funds for a substantial down payment.

    • Example: For a used car worth $12,000, a dealer might require a down payment of $15, or $1,800. If you're struggling financially, coming up with this amount can be difficult, especially if you have other debts to manage as well.
  5. Penalty clause for early repayment
    Some in-home auto finance companies may include penalty clauses if you want to pay off the loan early. This means that even if you want to pay off the loan faster to avoid paying extra interest, you could be financially penalized.

    • Example: If you get an unexpected sum of money and want to repay the loan early, you may have to pay a prepayment fee that would reduce the benefits of your prepayment.
Commonly Asked Questions About Home Auto Financing

While most dealerships require a down payment to reduce risk, it's sometimes possible to get in-home car financing with no down payment. However, it depends on the dealership and your financial situation. In some cases, not having a down payment can result in higher monthly payments or less favorable loan terms, such as a higher interest rate.

  • Example: A buyer with no down payment could get a loan, but with a rate of 12 % instead of 8 %, thus increasing the total cost of financing.

Yes, some dealerships offer in-house auto financing solutions even for luxury cars. However, the qualification criteria and requirements, such as the down payment, may be stricter due to the high price of the vehicle. Additionally, the interest rates and monthly payments will be higher depending on the value of the car.

  • Example: To finance a luxury car worth 50,000 $, a down payment of 10,000 $ might be required, with higher monthly payments compared to a standard vehicle.

Yes, adding a co-borrower with better credit or a more stable income can increase your chances of getting a home equity loan with more favorable terms. The co-borrower shares the responsibility of repaying the loan, which can reassure the lender and reduce perceived risks.

  • Example: If you have bad credit but your co-borrower has a good credit score and stable income, this may help you get a lower interest rate or avoid a high down payment.

Yes, some in-house auto financing companies also offer solutions to finance motorcycles, ATVs, boats, or other recreational vehicles. Financing terms, such as interest rates and repayment terms, vary depending on the type of vehicle, but the principle remains the same as for a car.

  • Example: If you want to buy a used motorcycle for 7,000 $, you can apply for used car in-house financing with conditions adapted to the vehicle and your repayment capacity.
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