It looks as though pressures on the Canadian vehicle market may start to ease up in 2023. As demand stabilises and inventory expands, prices could drop by up to 20% for pre-owned vehicles, and 5% for new models. This could also lead to cheaper auto financing in Atlantic Canada. However, with an economy still stumbling through the post-pandemic landscape, wise buyers are taking advice from the financial experts at Laneway Auto Loans and Sales and checking their finances before diving into a multi-year commitment like getting a car. Here are some pre-purchase points to ponder:
- make sure your job is stable, with enough financial headroom to pay off such a major investment, taking into account unpredictable factors such as inflation and interest rates that could eat into your monthly budget;
- check your credit score, as this is a major factor in the interest rates offered you by lenders, saving (or costing) you thousands of dollars [...]
In today’s hire-and-fire economy, plenty of drivers are finding it hard to keep up with their auto financing schedules. Plenty of jobs were lost forever during the pandemic, or maybe wages aren’t keeping up with the cost of living. With throttled supply chains still pumping up retail prices in Canada, inflation reached its highest point (8.1%) in almost four decades by mid-2020, according to Statistics Canada. The main culprit was gasoline, with pump prices almost 55% higher than they were a year ago. Reflecting the run-up to this situation, drivers have been battling to repay their car loans for many months. In fact, Equifax Canada reported a 14.7% surge in non-bank auto delinquencies in the final quarter of 2021, compared to the same period the previous year.
Is Refinancing My Car Loan a Smart Step?
Many lenders and dealerships – like Laneway Auto Loans and Sales – are happy to discuss ways of restructuring [...]
There are no legal requirements in Canada covering the early repayment of auto financing. However, the loan officers at Laneway Auto Loans & Sales are familiar with some of the quicksands that can trap unwary borrowers in never-ending cycles of spiralling debt. They know that it’s all too easy for car buyers to be swept away by the exciting possibilities opened up by auto loans. So here are some of their top tips on how smart buyers can save money by paying off their car loans ahead of schedule.
Will I Be Penalized for Paying off My Car Loan Early?
Although relatively rare, some lenders charge a payoff penalty, if you decide to exit your loan agreement by paying off your outstanding balance. The reasoning behind this is that they don’t earn as much money on interest as planned, if you had continued to pay each month for the full term of your loan. [...]
It might seem counterintuitive, but borrowing money actually helps Canadians improve their credit records. According to experienced consultants at Laneway Auto Loans & Sales, making all those routine payments on time, every time, shows lenders they can trust you to stick to your repayment schedule.
Detail: A whopping 35% of your overall credit score is based on your payment history.
How Does an Auto Loan Build My Credit Score?
Financing a car purchase is a transaction that slots into your credit score. This is a record of how much debt you are carrying, for how long, and how promptly you are paying it all back. Another factor in your payment history is the kind of credit you hold, either revolving (like a credit card) or regular instalments (like a mortgage). Consequently, paying back your auto loan regularly upgrades your payment history, which in turn boosts your credit score.
Detail: A solid [...]