A car is something that most of us take for granted, but if you need to finance a new or used car loan in Ontario, there are some things you should keep in mind. New and used car prices have risen dramatically due in part to the pandemic, so you will need to dig a little deeper in your budget to realize your car buying dream.
Do you have a budget in mind?
You should consider what is the maximum amount you can comfortably afford to pay for the car.
It would be unfortunate to end up car poor due to a lack of planning. Based on our research, the average Canadian has a car payment of roughly $500, but this does not include the cost of insurance and fuel, which is getting more expensive by the day.
Budget $1,000 per month for the car payment, insurance, maintenance, and running costs, and you should be fine.
New and used cars are currently selling for well over $30,000, so we presume you will need to secure financing.
While your local bank may offer car loans, there is no guarantee you will qualify for them, or they are the most competitive.
Traditional banks offer a variety of financial products and don’t specialize in anyone; this lack of specialization means you could end up paying more than you need to.
Credit score needed for the best financing
Access your free TransUnion and Equifax credit score so you know where you stand when it comes to credit score. Anything over 720, and you should be able to qualify for the most competitive car loans.
There are lenders who specialize in providing car loans to borrowers with credit challenges. These lenders charge a higher interest rate but will approve you when no one else will give you a chance.
If you have credit issues, going through these special lenders may be a good option, but you will need verifiable income to qualify.
While on the subject of credit scores, it would be advantageous to work on rebuilding your credit, so you never have to apply for a high-interest car loan again.
There is no big secret to having a high credit score, just pay your bills on time and don’t carry excessive debt.
How to access the best car loans
The best way to access new or used car loans in Ontario regardless of your credit situation is by going through a local car dealership.
It may seem old-school when you could apply for car loans online; however, the loans that are being offered online cannot hold a candle to the deals your local dealership can secure.
When you work with a reputable local dealership, they have access to tools that the average consumer is not able to utilize.
The dealership can negotiate a lower interest rate for you, even with bad credit! This translates into more cash in your pocket throughout the loan.
You can invest some time reviewing the various car that are available, knowing you will be able to get financing, so now would be a great time to schedule an appointment at your dealership.
Click here to get approved for your next car loan online today! we have a team of credit specialists ready to help you with buying a car with poor credit score, and will work with you no matter your credit score.
For any questions or concerns, please don’t hesitate to contact us here!