We are going to share with you some of the common mistakes you should try to avoid when buying a car for the first time.
It’s perfectly natural to feel excited; buying a car is a major milestone in your life, so be sure to follow these tips, and you will have no regrets going forward.
How stable is your income?
Usually, what happens is a person just graduates from university and lands a job in their field.
They look at their monthly salary and figure they will buy a car to celebrate the new job. What you may not realize is there is more to owning a car than just making the monthly payment.
- Maintenance costs can add up; if you are buying a new car, whether EV or gas-powered, it will require periodic maintenance, which isn’t free. If you don’t properly maintain your vehicle, it will cost you more in the long run, so this is something you cannot ignore.
- Fuel costs are at all-time highs: gas prices are at unprecedented levels and continue to increase. While we could debate the causes, the reality is that you will need to dig deep into your pocket if you want to drive anywhere. Ev’s fuel costs are significantly lower, but you need to determine if there is adequate charging infrastructure based on where you live in Canada.
Your income needs to cover all of your current obligations plus the new car payment and still have some cash left over for emergencies.
We are not trying to be a buzzkill, just wanted to let you know what to expect.
Credit score review
Suppose you are confident your income is enough to cover your obligations. In that case, the next thing that lenders are going to focus on is your credit score.
Your student loans and other consumer debt will appear on your credit report, so if there are any skeletons in your closet, now is the time to deal with them.
Start by paying down your debts as much as possible. The less debt you owe, the less of a credit risk you appear to prospective lenders.
Typically, lenders like to see borrowers with a credit score of 700 to get the best interest rates.
If your score is under 700, there is some work to do, but you can still get a car today if you really need it.
Where to find the best deals on new and used cars in Canada
Whether you are buying your first or first of many cars, Canadians should head to their local car dealership.
These local dealerships are part of your community, so when you support them, you are supporting your community.
The dealership will be able to get you approved for a car loan with very competitive terms even if you have credit challenges.
You need to contact the dealership as soon as possible, though, so you can test drive the cars in their inventory until you find the one you like the most.
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!