Virtually every automobile on the road has been financed. The average Canadian is $200 away from financial catastrophe, as the majority do not have the funds on hand to purchase a new vehicle costing upwards of $40,000 or more.
If you purchased a vehicle before the pandemic, you should consider refinancing it asap. You might save thousands of dollars over the life of your loan, particularly now that the Bank of Canada has begun to raise interest rates in an effort to control inflation, which will reach 7+ percent!
Yes, you can refinance car loans in Canada
Most of us are accustomed to refinancing our mortgages every five years or so, but the majority of Canadians assume their auto loan is fixed and there are no choices to reduce the interest rate
How does auto loan refinancing work?
The lender must assess the vehicle’s value in the current market (not an easy task).
The majority of vehicle dealerships provide professional appraisals that can be submitted to a lender.
The lender will subtract your current loan debt from the vehicle’s appraised value, resulting in either a positive or negative number.
If the figure is negative, your vehicle is worth more than you owe, but due to the rapid depreciation of automobiles, you will usually owe more than the vehicle is worth. If you have an excellent credit score, you might be able to borrow more than the car’s full market value.
Identifying lenders that provide vehicle refinancing
Lenders promote these loans online, but you must have a credit score of at least 720 to qualify.
If you have a credit score of roughly 670, you are eligible for these loans, but the lenders are not available online. For assistance, make sure to contact dealerships in your community. These lenders exclusively work with dealerships; you can obtain these loans through a dealership. If your credit score is low, there are steps you may take immediately to raise it.
You can substantially increase your credit score by adhering to known best practices. Resist the urge to utilize credit repair services that are advertised on the Internet.
The majority of these credit repair businesses are swindlers. Legally, the only way to improve your credit score is to pay your payments on time and minimize your total debt.
The secret to excellent credit is maintaining low balances, making payments on time, and exercising patience.
You should contact your dealership immediately since vehicle loan interest rates are likely to increase, and you don’t want to miss out on the opportunity to save a lot of money.
The sooner you refinance your auto loan, the more money you’ll save; therefore, call your local dealership as soon as possible to schedule an appraisal.
All of this sounds like a complex process, but it only takes a few minutes and it can make a substantial impact on your personal finances, so do yourself a favor and contact the dealership today.
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!