So, you just passed your driver’s test and want to buy your first car. It’s an exciting time and perhaps your first real step towards independence. It’s a time of huge potential but also a time that needs to be tempered with a small dose of reality.
That’s especially true if you’re hoping to use Guelph car finance to buy your first car.
We don’t want to dampen your enthusiasm but finance is one of those areas that needs to be approached in a calm and measured way. We understand your excitement and we appreciate your enthusiasm but a wrong step here could have far-reaching consequences.
That said, if you want a new car, we can help. Just remember these important points.
You have to be over 18 to access Guelph car finance
Even though you may have earned your G or G2 license, you cannot access finance until you’re 18. The same is true for any form of credit, from a credit card to a car lease and especially car loans.
That means there is a potential wait for you to become a legal adult before you can get a car loan. There is nothing stopping you buying a car with cash or using the bank of mom and dad but you cannot finance it yourself.
Credit scores are for life
As soon as you hit 18, it’s a good time to begin building your credit history. A lack of credit history is the #1 reason young people are refused car finance. Start early and you can avoid that when it comes time for a car loan in Guelph.
Start with a credit card and work up from there. Pay it off each month to avoid paying interest and set up automatic payments so you never miss one. When you leave home, add utilities and rent and you will begin building a rounded credit history lenders can use.
It takes a while to build up a credit score so expect to spend 1–2 years before you can qualify for larger car loans on your own.
Consider a coborrower
Once you’re over 18 and working on your credit score, you can overcome a low score by using a coborrower. This is traditionally a partner but you can borrow with a sibling, parent or anyone you like.
You both sign the loan agreement and are both responsible for it, so be careful who you choose.
Consider a cosigner
A cosigner is often a better idea for young drivers. This is like a guarantor loan. You apply for the Guelph car loan in your own name and someone else signs it guaranteeing they will take over if you default.
This is another role traditionally filled by parents but can be anybody you trust and who trusts you enough.
There are areas of life you can rush into and enjoy without having to worry about consequences and there are areas of life you cannot. Finance is, unfortunately, one of the latter.
Approach it sensibly, work with the system instead of against it and you can make it work for you for the rest of your life!
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!