Owning a car in Canada is a rite of passage but also a necessity. The public transit system in this country is not adequate enough to meet the needs of Canadians given the vast size of the country.
While owning a car is a necessity, it is also expensive with the average car price well over $40,000 and the average income of a Canadian around $50,000 per year, you are looking at 1 full year of your life working to own a car. This does not factor in the cost of insurance, fuel, and maintenance. So, we feel a responsibility to show you how you can save money on a new car loan in Ontario.
Getting the lowest possible interest rates
Whether you have a car loan right now or are just looking at your options, these tips are going to help you save money on a new car loan.
Interest rates have never been this low but regulators are going to start increasing the rates in the Spring/Summer of 2022. This rate increase will make owning a car more expensive!
Lenders are eager to give out loans but you need to meet the minimum qualifying criteria for these prime interest rate car loans.
The credit score needed is 680 but you should aim for 720 or higher. If your score is in the 620-650 range, you can get a car loan but the interest rate is going to be considerably higher.
Quick tips on how to boost your credit score
If your credit score is under 700, you should sign up for CreditKarma and keep tabs on your accounts. Are you noticing any strange activity on your credit report? If you notice anything, you can dispute it by going through the dispute process at Equifax and TransUnion.
This goes without saying but we will say it, try to keep your balances below 30% of the total available credit. Part of the FICO scoring model is credit utilization, if you are carrying too much debt, it puts downward pressure on your credit score.
Finding the lowest interest rate car loans
There are countless websites that are advertising the “lowest interest rates” and while the rates may seem low, you need to heed our advice and go to a car dealership.
Dealerships have the ability to negotiate lower rates than the average consumer. The dealership writes millions of dollars’ worth of car loans each year. This volume gives the dealership tremendous negotiating power with lenders.
These dealerships also can show you how to raise your credit score, so you have access to save money on a new car loan. This advice is free and you should take it seriously.
Another immediate benefit of going to a dealership is they have cars available in their inventory that you can buy today. There is a shortage of new and used vehicles all over Canada, so having immediate access is a tremendous benefit.
Now that you know how to save money on a new car loan, you should contact your local dealership before the available number of cars goes down any lower.
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!