Interest rates on car loans have never been lower but it appears that the good times are over, and rates are going to rise. If you have a car loan or are in the market to buy a new car, you should take a look at all of your auto loan options before you miss out on a great opportunity to save money on a car loan.
Our Niagara Falls car loans team explains a few accessible ways to save money on a car loan as we all need to save money right now.
Refinancing your current Niagara Falls auto loan
If your auto loan is more than 5%, you should look into your refinancing options. There are a few variables that go into refinancing an auto loan in Niagara Falls, we will touch on the main items.
The resale value of your vehicle is critical when trying to refinance your auto loan. Before your loan is approved, the lender wants to make sure the current fair market value (FMV) is enough to cover the loan should you default on the car loan.
These lenders have access to tools that will give them a conservative fair market value, you could use websites like Kelly Blue Book but that is for reference only.
An effective way to find out what your vehicle is worth is by speaking with your local dealership and having them provide a written appraisal.
Meeting the credit underwriting requirement
After the value of your car has been worked out, the lender is going to want to assess your creditworthiness. Just because you qualified for a car loan in the past, does not mean you will again.
The lender wants to look at your credit score, which needs to be over 650 to qualify for a prime interest rate auto loan in Niagara Falls. If you are not at that level, there is still hope but the interest rate will be higher.
In this situation, when you have or recently had credit issues, you have to work with a reputable local car dealership.
Having someone in your corner
The dealership has the experience and ability to negotiate very competitive interest rates, even if your credit score is lower than the conventional underwriting requirements.
You may be wondering why the dealership is willing to work so hard to refinance your auto loan. They want you to have a good experience so you become a long-term customer.
During your relationship with the dealer, they will be able to help show you how to improve your credit score. There are no shortcuts when trying to improve your credit score, so do not spend your hard-earned money on credit repair services.
Keep regular tabs on your credit score by using free credit monitoring apps from Equifax. By taking proactive measures to keep your credit score up and follow the advice given by your local dealership, you will have no issues getting a low-interest rate auto loan.
Prime interest rates throughout Canada are poised (the big banks have started to raise their mortgage rates) to start rising in the coming weeks and months, so reach out to your local dealership ASAP for help or run the risk of paying way too much interest.
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 save money on a car loan today!
For any questions or concerns, please don’t hesitate to contact us here!