The Canadian auto market has gone through and is still experiencing fallout from the pandemic. Dealerships and carmakers are trying to figure out a way to boost sales. That’s why it’s actually a pretty good time to buy a car in Canada.
Any person who is in the market or will be in the market soon for a new car has a tremendous opportunity in front of them. This article will explain some big reasons why it’s a good time to buy a car.
Interest rates are the lowest they have ever been in a generation
This biggest reason it’s a good time to buy a car in Canada: The interest rate on car loans has never been lower, at least not since the economic collapse of 2008. Banks and financial institutions have huge sums of cash to lend out to credit-worthy borrowers. With rates so low, you do owe it to yourself to find out if you qualify for these low rates.
With all of the different websites offering auto loan quotes. You may feel overwhelmed trying to figure out which one is going to give you the best deal. We will let you in on a little secret, none of those sites can give you the best rate.
The only way to get a competitive auto loan quote is to apply for one with a reputable car dealership in your area. These local dealerships have the infrastructure and relationships with lenders to help you secure the best possible interest rate based on your credit profile.
How lenders underwrite auto loans
When you fill out the application for an auto loan, the details are keyed into a system where it takes your credit score and income details. The system is designed to make an immediate decision on whether to approve or reject the loan. If your case is borderline, then the underwriter will speak with your sales rep from the dealership to get additional information. (remember the underwriter wants to lend you money but they need to make sure you qualify).
If your credit score is not high enough for a prime auto loan, the lender may offer you a loan at a higher interest rate. Your sales rep will explain the terms of the loan and also help guide you on steps you can take to improve your credit score.
By improving your score, you will be able to qualify for a better interest rate in a year or two. This higher score will give you the ability to refinance your auto loan at a much lower interest rate.
When you have financing in place, you can now start looking at the different cars the dealership has available. While you may want to buy a brand new car, take a look at cars that were from last year.
These cars are essentially brand new, they are just one calendar year older than the latest models. The upside of buying these cars is the dealership may be willing to give you a better price than what you would pay for the latest model.
The only way to buy a new car at a fair interest rate is by working with the right dealership in your area. You need to assess these dealerships and select the one that is right for you.
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!
For any questions or concerns, please don’t hesitate to contact us here!