Are you thinking about buying a car? Our Halton car loans team are going to review some of the key things you should do to help you save money.
Car prices are going up
The average price of a new car in Canada is north of $40k. That was before the chip shortage created some massive production bottlenecks for carmakers all over the world.
Not only are car prices rising but interest rates are on the move too, so you are getting hit with higher prices and interest rates.
The lack of new and used cars will last for 2 or more years so you should seriously consider buying a car now.
Changes in the auto loan underwriting process
The pandemic has made lenders more cautious when underwriting new car loans in Halton.
To get approved for a prime interest rate car loan, you will need a score of 680 but realistically you should have a 720.
Even with a high credit score, it does not guarantee you are going to be approved. You will need to have a stable source of income that the lender can verify through 3rd party sources.
To verify your income, lenders are now asking for your bank statements and income tax assessments for the last 2 years. This added layer of due diligence is a fact of life, so you should prepare those documents now.
If you have issues with proving income or a credit score that doesn’t reach the 680 level, then you will need to repair your credit score.
Tips on repairing your credit
The first thing you have to do is list all of your current debts and find out if any of them are past due. You can get that information by using an app like Credit Karma.
We understand that life can get busy and you can miss a payment, it happens to the best of us.
But even 1 missed payment can cause your credit score to plummet so you should sign up for pre-authorized payments so you never miss another bill.
Another factor impacting your credit score is your credit utilization ratio.
This ratio is calculated by comparing the total amount of credit available to how much is currently being used. If you are carrying too much debt, then you are considered higher risk and receive a lower credit score.
How to find lenders willing to work with you
You’ve probably tried to find lenders online that will offer you a car loan. This step is time-consuming and there is no guarantee the lender is going to give you a good deal.
Instead of subjecting yourself to all of those headaches, you should follow our advice and work with a local car dealership.
The dealership can find lenders who will approve a Halton car loan based on your situation. (The dealership has credit experts who can help you address your credit issues)
Since the car shortage is a real issue, you should contact your local dealership ASAP and buy yourself a car before there is nothing available that suits your needs or budget.
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!
Let’s get in touch!
For any questions or concerns, please don’t hesitate to contact us here!