If you want to buy a car for the first time, these tips for first-timers will help you get the best value for your money. Car prices are quite high, even if you are buying a used car. Without a plan, you will end up paying more than what is absolutely necessary.
Do you have a stable job/source of income?
When most people buy a car for the first time, they just completed university and landed a job. You need a reliable vehicle to get to work and also do normal things.
Since you are buying a newer vehicle, are you aiming for a brand new or previously owned car? Everyone, for the most part, wants a brand new car; it feels great knowing this is “your” car and no one has driven it before you.
The average cost of a new car in Canada is around $40,000, which is around the same amount as the average student debt. Your student loan payments could make it difficult to qualify for a new car loan, so you might consider aiming for a previously owned car.
You are getting a reliable vehicle at a more competitive price with a previously owned car. There is a shortage of new cars, so buying a previously owned car is a great option instead of waiting a few weeks for the new one to arrive from the carmaker.
If you are wondering how lenders calculate the maximum car loan amount, take your gross monthly income, multiply it by forty percent(40%) and subtract all of your monthly expenditures like rent, credit cards, student loans, and whatever the remaining balance is, that is what can be applied against your car loan.
The average new car loan is around $400-$500, so you will have a rough, ballpark figure to work with when you buy a car for the first time.
Benefits of having a good credit score
Suppose you have kept up with your financial obligations and have good credit. In that case, you will be able to benefit from the ultra-low interest rates being charged by auto loan providers.
The lenders need to issue more loans to generate enough profit, so if you have a good credit score, that makes you a highly sought-after customer.
Getting the most competitive car loan
Do not try to get a car loan online; the companies that provide the best auto loans do not advertise online to the general public. The only way you can access these loans is by applying through a car dealership. When you go through a local dealership, they will help you find a car that is right for you and your budget.
Once you have selected a car that meets your needs, they will negotiate the most competitive terms on your behalf. The dealership wants you to love their service, so you will be a repeat customer with them for life.
If you tried to get a loan on your own, you would end up overpaying by thousands of dollars, so leave the negotiations to the professionals at your local car dealership.
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!