Navigating the Trails: How to Finance a Snowmobile with Bad Credit in Canada

· Tips and Tricks,Financing

Canada’s snowy landscapes are a paradise for snowmobile enthusiasts, offering miles of immaculate white trails to explore. However, the thrill of sledding can sometimes be dampened by the challenge of securing a snowmobile loan, especially if your credit history isn't perfect. This blog post will guide you through the process of financing a snowmobile with bad credit in Canada and illustrate how sled financing is not as elusive as it may seem.

Snowmobile loans are usually not as straightforward to secure as automobile loans. Major banks often shy away from them due to the perceived higher risk associated with these types of purchases. As a result, bad credit snowmobile loans are often handled by specialized asset lenders who primarily work directly with dealerships as opposed to directly to the public. We've included a chart showing the main differences between automobile and snowmobile lending here:

Chart comparing automobile financing with snowmobile financing

The structure of most powersports loans are similar to other asset loans where the snowmobile acts as collateral. This mitigates some of the risk for lenders, since they can claim the asset if borrowers default on the loan and, in some cases, still sue the unit owner for the value they are losing in interest payments. This security element makes it feasible for these specialized lenders to provide poor credit sled loans. However, remember that the risk associated with lending to individuals with a troubled credit history is typically reflected in higher interest rates.

As of July 2023, the starting rates on snowmobile financing stand at 9.9% and can reach as high as 29.9% in the instance of complete rebuild. This might seem steep, especially when compared to the more conventional bank loan rates that hover closer to 5% in-line with the current Bank of Canada rates. That being said, it's important to weigh this against the opportunity of securing your dream snowmobile and embracing the excitement of the trails despite having a lower credit score.

Now, finding a trustworthy lender is crucial. We have partners like Revival Powersports who offer comprehensive sled financing options, including for private sales found on platforms such as KIJIJI, Facebook Marketplace, or even other dealerships. They operate with an easy-to-understand fee model and maintain full fee disclosure, which can help you understand and navigate the process more efficiently.

Used snowmobile at Revival Powersports in Edmonton

Before you begin the process of securing a bad credit snowmobile loan, it's essential to do your homework. Research the market thoroughly, understand the terms of your loan agreement, and ensure you're getting a fair deal. Additionally, take the time to consider your ability to manage the repayments, as failing to do so could put your new snowmobile at risk. We have a handy snowmobile loan calculator that provides honest insights on loan costs, so be sure to check it out.

Even with less-than-perfect credit, sled loans in Canada are not unattainable. By working with specialized lenders and understanding the process, you can soon be carving through the fresh Canadian trails on your own snowmobile, enjoying the freedom and thrill of the winter wilderness. Despite the higher interest rates, remember that the joy of riding on your dream snowmobile may just make it all worthwhile!