If you are reading this, you must be interested in knowing whether your current car loan is “bad” or just interested in car loans in general. The title was not clickbait, if you have a car loan that is more than 3 years old, you are paying more interest than necessary, and overpaying is always a bad deal. So, we’ll show you how to get out of a car loan in Burlington.
Auto loan refinancing is booming
The auto refinancing marketplace is on fire, most of us have never refinanced a car loan because depreciation makes it practically impossible. Most car loans are in negative equity, this means we owe more on the car loan than what the car is actually worth.
What is different this time around, the value of used cars is on the rise. There is a chronic and systemic shortage of new and used cars around the world. The demand for cars did not go away when the world was on lockdown due to Covid and this demand is now reaching a fever pitch.
The lack of negative equity and lenders under pressure to underwrite new loans has created a once-in-a-decade opportunity.
How to refinance a car loan
Maybe you want to get our of a car loan in Burlington so you can refinance a new one. You have probably seen paid advertisements online claiming to have the best interest rates on car loans. Those “best rates” are for retail consumers, if you want to really save money then you need access to the wholesale rates.
The only way to access these wholesale rates is by going through a car dealership.
Making the most of your car refinancing opportunity
You have a few options, you can just refinance your current car loan. Another option is to trade in your used car and get a brand new car with a much lower interest rate. There are lenders right now offer zero percent car loans on select new vehicles.
Since you are going to get maximum trade-in value for your car, it makes sense to take advantage of this opportunity and get yourself a new car. The reason we recommend getting a new car is based on our observations of the marketplace.
There is a shortage of new cars, the supply chain may be able to catch up but there are Covid variants that could bring things to a halt leading to more delays. This is why you should buy a newer vehicle asap to avoid not being able to buy a car at all in a few years’ time.
Qualifying for the most competitive car financing terms
The pandemic has created a golden opportunity but it also made lenders nervous. To qualify for the most competitive auto financing terms, your credit score must exceed 680 and your income sources must be verifiable.
The local dealership will be able to help you get a car loan if your credit score is below 680 but you will need to explain the cause of your credit issues to the dealership.
While interest rates are low as we are writing this, the Bank of Canada is going to start raising interest rates, so you need to contact your dealership today and begin exploring your options.
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 out of a car loan in Burlington and into a new one today!
For any questions or concerns, please don’t hesitate to contact us here!