Buying a new car is a bittersweet experience for most of us Canadians. After dreaming about all those fancy trims and powerful engines, limited budgets pull us back to reality.
This is where an auto loan can help make those dreams come true. But that doesn’t mean you should plunge into debt without weighing the pros and cons of vehicle financing.
The Upside of Auto Loans
If your credit rating is fair to good (660 and up), you have a steady source of income (preferably a steady job), and a proportional debt load, you’ll have no trouble in finding an auto loan. Responsible borrowers also enjoy other benefits when they sign up for a car loan:
timely repayments ramp up your reputation, because 35% of your credit score is based on your payment history;
dealer incentives might save you thousands of dollars over the term of your loan, through 0% financing or [...]
Vehicle financing is a competitive market – which is a plus for prospective car buyers. Rated right after purchasing a home in terms of lifetime importance, an automobile is more than just a convenient way of getting around. It’s a major investment, with car loans deserving as much attention as mortgages.
Where to Look for Auto Financing in Canada
Although most lenders use the same criteria to define your desirability as a borrower (and thus the interest rates they offer you), they often weigh them differently. Traditional financial institutions (like banks) tend to be more conservative, preferring customers with higher credit scores. In contrast, credit unions often offer car loans at lower interest rates, particularly to their account-holders.
Meanwhile, Canadian dealerships are eager to turn over their inventories. Many of them provide in-house loan facilities with less stringent conditions and longer terms of up to 96 months. Finally, online auto financing agencies [...]
Choosing a new (or new-to-you) car is fun, right? Marques and models, trims and tricks, gimmicks and gadgets must all be weighed and analysed against personal preferences and family budgets, whittling down the options into a shortlist of front-runners.
Smart buyers follow the same painstaking selection process for their auto loans. Seeking the most competitive terms, they check not only the monthly repayments, but also interest rates, durations, fees, and total costs.
Shop Around for Your Vehicle Financing
Thanks to the Internet, it’s easy to gather multiple car loan offers, compare them, and then negotiate with at least three lenders. But before applying for pre-qualification, it’s important to make sure you’re an attractive auto financing candidate.
The cornerstone of your reputation in the loan market is your credit score. This should be at least 670, and preferably higher. As conditions vary by lender and even region, shopping around is the best [...]
Not everyone dreams of a brand-new car. Many drivers prefer to buy relatively new second-hand models at lower prices and with easier consumer financing. As a useful costly option between under-warranty new and buyer-risk second-hand cars, some dealerships offer certified pre-owned vehicles.
Typically less than five years old and with 800,000 kms on the odometer, these smart buys are often trade-ins from lease customers upgrading to a new model. This is a great choice for anyone wanting all the advantages of a used-car, without too many of the drawbacks.
Used Car Financing Options
Generally speaking, there are two ways for Canadians to finance better-quality used cars with less than 80,000 kilometres on the clock, and under ten years old. The easiest way is through the car dealership, or else through a bank, particularly for account-holders.
Either way, auto financing approval depends heavily on your credit history. However, auto financing is basically available to [...]
Famed for being environmentally friendly, electric vehicles are also becoming the best friends of your wallet. However, it’s not easy to dump the gas-fuelled mindset that fuelled the expansion of the auto industry for well over a hundred years.
That’s why New Brunswick is actively encouraging its residents to take the leap and invest in electric vehicles. These steps range from tax credit incentives to steadily expanding network of charging stations. This means borrowing less to finance EV purchases, often under special conditions.
Are you Worried about Charging your EV?
A huge country famed for its wide-open spaces, Canada is driving ahead steadily towards its 2035 zero-emission target for light-duty vehicles. Notable for its progressive stance, New Brunswick stands out among Canada’s provinces for its electric vehicle charging station network.
With only some 65 kilometers between each charging station, and more than 200 service points, drivers can top up their electric vehicles easily, [...]
When most Canadians decide to buy a car, they also start looking for the best deal in car loans. This financing usually lets them pay for their wheels over a set period of time, with monthly installments that remain unchanged for the term of the loan.
Borrowing many thousands of dollars is a heavy commitment, particularly as buying a car is the second-largest purchase that most of us make in our lifetimes. That’s why it’s important to figure out exactly how much you can afford to pay back each month, calculating exactly how much you’ll have to pay out and then making sure this fits into your budget.
How Auto Loans Work
Although the world of finance might seem complicated, financing a car is a transaction that is easy to understand, once you master the basic terminology:
term is the length of time for which you wish to borrow the money, which can [...]
There’s good news and bad news for Canadian buyers shopping around a new car. The good news is that there’s no threshold credit score for taking out a car loan. The bad news is that borrowers with low credit scores pay higher interest rates, meaning that their vehicles cost considerably more by the time they pay off the principal amount of the loan and interest.
Learn About Credit Scores
When buying a new or used car, your credit score is a major factor in these transactions. For instance, dealerships will check your credit score before financing a vehicle in your name, while financial institutions define the terms of your loan, based on your credit score.
Although a low credit score wouldn’t stop you from buying a car, you might have to pay a higher-than-average interest rate on your loan. However, once you build up your credit score by making sure every instalment [...]